Old-people-couple-together-connected“It's important to understand that Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage.”

Medicare Parts A and B cover a big part of your medical expenses when you turn age 65. Part A is your hospital insurance that helps pay for inpatient hospital stays, stays in skilled nursing facilities, surgery, hospice care and certain home health care. Part B is your medical insurance. It will help pay for doctors' visits, outpatient care, some preventive services, and some medical equipment and supplies. Most people can sign up for Medicare three months before the month they turn 65.

However, Kiplinger’s recent article, “7 Things Medicare Doesn't Cover,” gives us a closer look at what isn't covered by Medicare, as well as some information on supplemental insurance policies and strategies that can help cover the extra costs. That way, you won't wind up with unanticipated medical expenses in retirement.

Prescription Drugs. Medicare doesn’t provide coverage for outpatient prescription drugs. However, you can purchase a Part D prescription-drug policy or a Medicare Advantage plan that covers both medical and drug costs. You can get Part D or Medicare Advantage coverage, when you enroll in Medicare or when you lose other drug coverage, and you can change policies during open enrollment season each fall.

Long-Term Care. One of the biggest potential expenses in retirement is the cost of long-term care. Medicare provides coverage for some skilled nursing services, but not for custodial care. That’s help with bathing, dressing, and other daily living activities. However, you can buy long-term-care insurance or a combination long-term-care and life insurance policy to cover these costs. The earlier in life you make this purchase, the better.

Deductibles and Co-Pays. You’re responsible for deductibles and co-payments on Medicare Part A hospital stays and Part B doctors’ services and outpatient care. This year, you’ll have to pay a Part A deductible of $1,340 before coverage starts, and you’ll also have to pay a portion of the cost of long hospital stays, which is $335 per day for days 61-90 in the hospital, and $670 per day after that. Note that over your lifetime, Medicare will only help pay for a total of 60 days beyond the 90-day limit—known as “lifetime reserve days”—and after that, you’ll pay the entire hospital cost.

Part B typically covers 80% of doctors’ services, lab tests, and x-rays, but you’ll have to pay 20% of the costs after a $183 deductible in 2018. A Medigap (Medicare supplement) policy or Medicare Advantage plan can close the gaps, if you don’t have the supplemental coverage from a retiree health insurance policy. If you buy a Medigap policy within six months of signing up for Medicare Part B, then insurers can’t reject you or charge more because of preexisting conditions.

The Majority of Dental Care. Medicare doesn’t provide coverage for routine dental visits, teeth cleanings, fillings, dentures or most tooth extractions. Some Medicare Advantage plans cover basic cleanings and x-rays, but they usually have an annual coverage cap of about $1,500. You could also get coverage from a separate dental insurance policy or a dental discount plan.

Basic Vision Care. Medicare also generally doesn’t cover routine eye exams or glasses (except for an annual eye exam, if you have diabetes or eyeglasses after having certain kinds of cataract surgery). However, some Medicare Advantage plans provide vision coverage, or you may be able to buy a separate supplemental policy that provides vision care alone or includes both dental and vision care.

Hearing Aids. Medicare doesn’t cover routine hearing exams or hearing aids, but some Medicare Advantage plans cover hearing aids and fitting exams. Some discount programs also provide lower-cost hearing aids. If you save money in an HSA before you enroll in Medicare, you can also use that tax-free for hearing aids and other out-of-pocket expenses.

Medical Care Overseas. Finally, Medicare usually doesn’t cover care you receive while traveling outside of the U.S.,  except for very limited circumstances (like when you’re on a cruise ship within six hours of a U.S. port).  However, Medigap plans C through G, M, and N cover 80% of the cost of emergency care abroad, with a lifetime limit of $50,000. Some Medicare Advantage plans cover emergency care abroad. You could also purchase a travel insurance policy that covers some medical expenses, while you’re outside of the U.S. and may even cover emergency medical evacuation.

Reference: Kiplinger (May 23, 2018) “7 Things Medicare Doesn't Cover”


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