Medicare Part A and Part B, also known as Original Medicare or Traditional Medicare, cover a large portion of your medical expenses after you turn age 65. Part A (hospital insurance) helps pay for inpatient hospital stays, stays in skilled nursing facilities, surgery, hospice care and even some home health care. Part B (medical insurance) helps pay for doctors' visits, outpatient care, some preventive services, and some medical equipment and supplies. Most folks can start signing up for Medicare three months before the month they turn 65.
It's important to understand that Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. Here's a closer look at what isn't covered by Medicare, plus information about supplemental insurance policies and strategies that can help cover the additional costs, so you don't end up with unexpected medical bills in retirement.
Medicare doesn’t provide coverage for outpatient prescription drugs, but you can buy a separate Part D prescription-drug policy that does, or a Medicare Advantage plan that covers both medical and drug costs. (Some retiree health-care policies cover prescription drugs, too.) You can sign up for 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. Compare costs and coverage for your specific medications under either a Part D or Medicare Advantage plan.
One of the largest potential expenses in retirement is the cost of long-term care. The median cost of a private room in a nursing home was nearly $97,500 in 2017, according to the Genworth Cost of Care Study; a room in an assisted-living facility cost $45,000, and 44 hours per week of care from a home health aide cost $49,000. Medicare provides coverage for some skilled nursing services but not for custodial care, such as help with bathing, dressing and other activities of daily living. But you can buy long-term-care insurance or a combination long-term-care and life insurance policy to cover these costs. See The Long-Term-Care Insurance Dilemma for more information about long-term-care insurance and other ways to cover these costs. See Medicare Rules for Home Health Care for information about Medicare’s strict rules for covering home health care.
Deductibles and Co-Pays
Medicare Part A covers hospital stays, and Part B covers doctors’ services and outpatient care. But you’re responsible for deductibles and co-payments. In 2018, you’ll have to pay a Part A deductible of $1,340 before coverage kicks in, and you’ll also have to pay a portion of the cost of long hospital stays -- $335 per day for days 61-90 in the hospital and $670 per day after that. Be aware: Over your lifetime, Medicare will only help pay for a total of 60 days beyond the 90-day limit, called “lifetime reserve days,” and thereafter you’ll pay the full 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 fill in the gaps if you don’t have the supplemental coverage from a retiree health insurance policy. Medigap policies are sold by private insurers and come in 10 standardized versions that pick up where Medicare leaves off. 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. See Choosing a Medigap Policy at Medicare.gov for more information. Medicare Advantage plans provide both medical and drug coverage through a private insurer, and they may also provide additional coverage, such as vision and dental care. You can switch Medicare Advantage plans every year during open enrollment season.
Most 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 generally 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. See Retirees, Create a Plan to Pay for Dental Care for more information about your options. Another alternative is to build up money in a health savings account before you enroll in Medicare; you can use the money tax-free for medical, dental and other out-of-pocket costs at any age (you can’t make new contributions to an HSA after you sign up for Medicare).
Routine Vision Care
Medicare generally doesn’t cover routine eye exams or glasses (exceptions include an annual eye exam if you have diabetes or eyeglasses after having certain kinds of cataract surgery). But 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. If you set aside money in a health savings account before you enroll in Medicare, you can use the money tax-free at any age for glasses, contact lenses, prescription sunglasses and other out-of-pocket costs for vision care.
To look up Medicare’s coverage rules and other types of care and procedures, go to Medicare.gov/coverage and use the “Is my test, item or service covered?” tool. Also see What Original Medicare Covers.
By David Lasman | President – Senior Healthcare Team
wwww.SeniorHealthcareTeam.com | 866-333-7340
Selecting the right healthcare plan through Medicare can be overwhelming and downright stressful. Senior Healthcare Team is a nationwide resource that provides guidance and support about Medicare to seniors at no cost to them and helps them to choose the most suitable insurance plan tailored to their specific needs and budget. Our goal is to educate and empower our clients to make the best decisions regarding their healthcare and clear up the confusion of Medicare. At Senior Healthcare Team, we aren’t partial to any one insurance company. Our loyalty is to our clients and our mission is to provide them with the best healthcare options at the very lowest cost.