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Most seniors love their Medicare coverage. Even though Medicare is a bit different from most employer health plans, 9 in 10 seniors are happy with their health care options. That’s the good news.
The bad news is that Medicare doesn’t cover everything, and in fact, some benefits you’re accustomed to with private group health plans aren’t included in Part A and Part B. If you’re not prepared, you might be unpleasantly surprised when you retire and transition to Medicare.
With that, here are six things Medicare won’t pay for.
If you’ve researched Medicare, you probably know that Medicare does cover care in a skilled nursing facility—in certain situations. But this is not the same as long-term care, so you need to be prepared.
Statistically speaking, 70% of people turning 65 this year will need long-term care at some point in their remaining years. Women, on average, need about 3.7 years of long-term supportive care, and men about 2.2 years.
Many people do not realize that long-term care is not covered by Medicare
Medicare only covers up to 100 days in a skilled nursing facility per benefit period. In order to be covered, the stay must follow a qualifying inpatient stay in the hospital, and you must need a higher level of care than just help with activities of daily living. If you only need custodial care—assistance with eating, bathing, and toileting—Medicare won’t cover your stay.
If your skilled nursing facility stay is covered, there’s a hefty $200 daily copayment (in 2023) for days 21 through 100. That’s over $14,000 for one covered stay. If you have a Medigap plan, your copayment may be covered, but Medigap won’t pay for any long-term care services that aren’t covered by Medicare.
Options: You can purchase private long-term care insurance to help cover the costs of supportive care; the earlier you buy, the lower your premiums will be. You can also invest in a health savings account or other tax-advantaged savings plan to set aside money for long-term care. These accounts have an advantage over insurance: The money in the account is yours to spend as you see fit, and you can pass any remaining balance on to your heirs.
Over 90% of seniors take at least one prescription drug and 54% report taking four or more daily medications. Original Medicare (Part A and Part B) doesn’t cover most prescription drugs you take at home. Generally, only medications given by injection or infusion in a doctor’s office or outpatient setting are covered by Part B.
Part D is the part of Medicare that helps with the cost of prescription medication
While costs for generic medications have dropped by nearly 40% over the past five years, costs for brand-name and specialty drugs increased by almost 60%. Humira, a drug commonly prescribed for arthritis and Crohn’s disease, costs about $2,500 for a 30-day supply; a 30-day supply of Xarelto, a prescription blood thinner, costs about $300.
Even if you supplement your Original Medicare with Medigap, you’re on your own for prescription medications. Medigap doesn’t cover your out-of-pocket costs for prescription drugs unless they’re covered under Part A or Part B.
Options: Part D Prescription Drug Plans are technically optional, but if you don’t have creditable prescription drug coverage through an employer or other group plan, you’ll pay a late enrollment penalty with your premium when you buy a plan. Most people buy Part D as soon as they enroll in Medicare.
It’s worth noting that most Medicare Advantage plans also include Part D prescription drug coverage. You get all your benefits in one plan for one monthly premium, which makes Medicare Advantage a convenient alternative for many people.
Original Medicare will typically not pay for healthcare costs outside of the U.S.
If you travel outside the country, you won’t have health coverage with Original Medicare, even for emergency care. There are a few very narrow exceptions when Medicare may pay, however. For example, if you’re traveling between Alaska and the lower 48 and you need emergency care while you’re passing through Canada, Medicare may cover your treatment. If you live near the border and a foreign hospital is closer than one based in the U.S., Medicare also typically pays.
For everything else, you’re financially responsible. If you’re a frequent traveler—as many seniors are—this can be a major concern. One serious health episode can leave you with hundreds of thousands of dollars in medical bills.
Options: Most Medigap plans include some coverage for overseas travel emergencies. However, the coverage is capped at $50,000 over the course of your lifetime. In addition, many foreign hospitals and clinics won’t bill your plan; you’ll have to pay cash upfront and request reimbursement once you return to the states.
Most Medicare Advantage plans also include some provisions for care outside the U.S., but again, foreign providers aren’t required to accept your plan or bill it on your behalf.
It’s almost always a good idea to buy a travel health policy if you plan to leave the country. These plans are generally affordable and cover everything—including evacuations and transports—and often cover other travel emergencies such as lost luggage and canceled flights.
As you age, your risk increases for many dental conditions. Seniors have a higher incidence of dry mouth, gum disease, root decay, and oral infections. It’s important to continue your routine dental care in retirement.
Routine dental care is not covered by Medicare
Unfortunately, routine dental visits aren’t covered under Part A and Part B. Neither are treatments for cavities, broken teeth, and other serious dental conditions. Medicare only covers medically necessary dental services you need to treat a health condition. For example, if you have oral cancer and need dental surgery as part of your treatment, Medicare typically covers it. It also pays for routine dental exams if you need clearance prior to heart surgery.
Beyond that, however, there is no coverage for dental services under Original Medicare. If you have Medigap, it also won’t pay for out-of-pocket dental costs not covered by Part A or Part B.
Options: There are many companion dental plans on the market for seniors today. These range from discount plans for common services to a more traditional full-coverage dental plan. If you plan to continue your routine dental exams and cleanings—and you should—it makes sense to look into a separate dental plan.
Alternatively, many Medicare Advantage plans include benefits for dental care. If the plan includes dental, it almost always covers routine exams and cleanings at 100%, with or without a small copayment. Many also pay a set amount toward restorative treatments such as fillings, crowns, bridges, and extractions. If dental coverage isn’t included in your plan, you may be able to add it for an additional monthly premium.
You read that right, Medicare does not cover vision care
Almost 80% of adults age 55 and over wear prescription eyewear. By age 65, 90% of seniors have a cataract and about half lose some vision because of it. Most older adults will need regular vision care to maintain and correct their vision.
Unfortunately, Medicare typically doesn’t cover eye exams, glasses, or contact lenses. If you are diagnosed with cataracts, Medicare will pay for the surgery and one pair of corrective lenses, but ongoing routine vision care isn’t covered. As with other non-covered Medicare services, your Medigap plan won’t help with routine eye care.
Options: Routine vision care is generally available with Medicare Advantage plans, either as an included benefit or as supplemental coverage with an additional monthly premium. You may also be able to enroll in a vision discount plan at low or no cost, depending on where you live.
The cost of hearing aids can be expensive – know before you go that routine hearing care is not paid for by Medicare
One-third of seniors between ages 65 and 74 have hearing loss, and half of those age 75 and over are hard of hearing. Few insurance plans cover hearing aids; the average person spends about $2,700 out-of-pocket for a pair.
Medicare doesn’t cover any routine hearing care. If you have hearing difficulties, you pay 100% of the cost of your exam, hearing aid fitting, and the hearing aids themselves. Medigap plans also don’t help with hearing exam costs.
Options: You may be able to find a Medicare Advantage plan with benefits for hearing care and discounts or allowances for hearing aid devices. This benefit may be included in the plan or available for an additional monthly premium.
It’s important to comparison-shop your options before you choose your Medicare path. For some people, Original Medicare with Medigap and supplemental companion plans for vision, dental, and hearing make the most sense. For others, an all-in-one Medicare Advantage plan offers the most cost-effective coverage.
Be sure to compare premiums, deductibles, and copayments in addition to covered benefits, and consider your lifestyle before choosing a plan. Medicare Advantage plans often restrict benefits to a specific provider network and plan service area; if you travel a lot, this may not work for you. Also, keep in mind that you must continue to pay your Part B premium even if you buy a Medicare Advantage plan.
Finally, investing in a health savings account (HSA) is a terrific way to protect yourself against out-of-pocket health care costs in retirement. These are triple-tax advantaged plans: Your contributions are tax-deductible, the money grows in your account tax-free, and you pay no income tax on qualifying withdrawals prior to age 65—and on any withdrawals after age 65.
Making sense of all of the intricacies of Medicare can be daunting. A licensed Medicare broker can help you make sense of your coverage options and find the right plan for your needs now that you know what Medicare won’t pay for.
