Medicare doesn’t cover everything. Here’s how to avoid surprises
- The average couple retiring today at age 65 will spend an estimated $280,000 on health care during the remainder of their lives.
- Many people signing up for Medicare don’t realize that some budget-busters, like dental care and hearing aids, are generally not covered. Neither is care received overseas, long-term care and routine vision, among others.
- Even the difference between being kept at the hospital for observation instead of being admitted as a patient can result in surprise costs.
Each day in the United States, about 10,000 baby boomers celebrate their 65th birthday. Their gift from good old Uncle Sam is Medicare.
After years of paying payroll taxes at work to help fund this government program, these older Americans finally get their turn to sign up and have health insurance for the rest of their lives.
Yet many new enrollees are surprised to discover that basic Medicare does not cover a variety of health-care expenses that can hit retirees pretty hard.
“A lot of people go into it thinking they’ll be covered for everything,” said Roger Luchene, a Medicare agent with Hammer Financial Group in Schererville, Indiana. “The three big ones are dental, vision and hearing. I’m actually surprised by how many people think that’s covered.”
About 48 million Americans age 65 and older are enrolled in Medicare, as well as another 9 million or so younger people with disabilities.
Fidelity Investments estimates that the average couple retiring today at age 65 will spend a whopping $280,000 on health care during the remainder of their lives.
Some people with low incomes qualify for programs that reduce their Medicare-related costs. There’s extra help for prescription drug coverage, and some state-run savings programs that can help with copays, coinsurance, deductibles and premiums.
For those who don’t qualify, paying out of pocket or buying additional insurance are their options.
Here are some common things basic Medicare does and does not cover and how to prepare.
The ABCs (and D) of Medicare
Basic, or original, Medicare consists of two parts: Part A and Part B.
Part A provides coverage for hospital stays, skilled nursing, hospice and some home health services. As long as you have at least a 10-year work history, you pay nothing for Part A. However, it comes with a yearly deductible of $1,340 and has annual caps on benefits.
Part B coverage kicks in when you visit a doctor or receive other outpatient services, like a flu shot. It also covers medical equipment, like crutches or blood-sugar monitors.
This year the monthly premium for Part B is $134 for people with an income up to $85,000. If you earn more than that, you’ll pay more (see chart below.) It also comes with a $183 deductible. After it’s met, you typically pay 20 percent of covered services.
(Source: Centers for Medicare and Medicaid Services. *Part B premiums are based on tax returns from two years earlier. So for 2018 it’s based on your 2016 return.)
Basic Medicare (again, parts A and B) does not cover prescription drugs, although you have the option of getting coverage when you first sign up for Medicare. If you choose not to and change your mind later, you’ll pay a life-lasting penalty unless you meet certain exclusions (i.e., you receive acceptable coverage through a union or employer).
If you go with the latter, which often includes some extra benefits above basic Medicare, your Part A and Part B coverage also will be delivered via the insurance company offering the plan.
Teeth, eyes and ears
Generally speaking, original Medicare does not cover dental work and routine vision or hearing care.
This means it does not cover dentures, which can run anywhere from about $1,000 to north of $5,000 for a complete set. And while a routine cleaning and X-ray could set you back about $200 and a filling runs about $150 or $200, a single tooth implant can be upward of $4,000.
However, if a dental condition involves an emergency or complicated procedure, it could be covered.
Same goes for routine vision checks. If you need glasses, it’s generally not covered. Yet if you have an eye condition like glaucoma or cataracts, basic Medicare will cover your care.