What Medicare Doesn’t Cover and What Options You Need to Consider

There are over 70 million baby boomers in the US today, making them the largest generation in American history. Since 2010, approximately 10,000 boomers are retiring every day and enrolling in the Medicare system. Yet many of these new members are surprised to find out that Medicare won’t cover every health care expense they may ever see.

While Medicare has helped eligible seniors access many medical services from healthcare professionals, it’s important to know what Medicare doesn’t cover. If you are near retiring, read further to learn about what Medicare can or won’t cover to avoid costly mistakes further down the road.

What is Medicare?

Medicare is a health insurance program sponsored by the US government to provide medical coverage to seniors who are 65 years old and over. Medicare became law in 1965 to help senior citizens who couldn’t obtain health insurance, regardless of their income or medical history.

The US Centers for Medicare & Medicaid Services (CMS), reports that there are over 55 million people who are current members of the Medicare system. Medicare provides eligible members access to hospitals, doctors, and other healthcare services. Medicare is called a “fee-for-service” where patients pay a portions of the fees for each health care service and the Medicare system will pay for the rest.

What Medicare Covers

Medicare has different plans for different benefits and are categorized by a different letter for each plan. Some plans are offered through private insurance companies who negotiate with CMS to provide these alternatives forms of coverage. Some plans only insure a single person and not couples. Be prepared to read these plan descriptions thoroughly to make sure you know what Medicare covers.

There are two fundamental sections to Medicare that are accessible to all Medicare recipients. These sections are called Medicare Part A and B. Medicare Part A and B, often labeled as “Original Medicare,” are components from the original 1965 Medicare program. Both Medicare Parts A and B are available to all system members today.

Medicare Part A pays for inpatient expenses associated with home health care service, hospital costs, and some hospice expenses. If you have 10 or more years of work history, Part A members don’t pay any monthly premiums. However, it’s important to know that Part A requires a $1,340 deductible payment per benefit period and annually caps benefits.

Part B covers partial outpatient costs such as doctor exams, and expenses for medical equipment. Medicare Part B members pay anywhere between $134 and $428 in monthly premiums, depending on their monthly income. Part B requires members to pay a $183 deductible that helps pay for 20 percent of covered services.

What Medicare Doesn’t Cover

Medicare coverage also includes a system of supplemental coverage called Medicare “Gap” plans. Medicare Gap (or Supplemental) plans help cover other out-of-pocket health care costs that Medicare Parts A or B can’t pay for like medical expenses you have when you’re traveling outside the US.

There are 8 gap plans available that pay for other medical services beyond what Medicare doesn’t cover in Parts A-B. Sometimes people refer to these plans as “parts” just like you see in the terms “Part A” or “Part B.” Medicare itself has “parts” while the gap or supplemental plans are referred to as “plans.” These plans include:

Plan C

Plan C gap plans can help provide coverage for additional medical expenses we sometimes forget about like vision or dental visit costs. Plan C can also cover other expenses that Parts A and B won’t cover like routine hearing services.

Plan C, however, will no longer be available to new members starting in 2020. Members who enrolled in Medicare before 2020 will still be able to receive Plan C benefits. New members eligible for Medicare after 2020, won’t be so lucky.

Plan D

Plan D is an additional benefit that pays for prescription drug costs. Before 2006, enrollees had to pay out of pocket for these medications. Part D drug plans also pay for many common vaccines, such as flu shots, to avoid future illnesses.

Plans F and G

Plans F and G are very similar in the coverage they provide beyond the original Medicare plans. They both cover hospitalization expenses for 365 additional days after Part A and B benefits run out. They are also the best Medicare supplement plans to help pay for additional services that general practitioners can’t provide such as blood transfusions or referrals to specialists.

Plans F and G however, differ when it comes to covering Part B excess expenses. Plan F can be used to cover the Part B annual $183 annual deductible. Plan G can’t be used this way.

Medicare Gap Plan G is a good idea for those who want additional coverage beyond the traditional Medicare plan. Gap Plan G covers each of the gaps in Medicare except for the annual Part B deductible.

Plans K, L, and M

Medicare Gap Plans K, L, and M are also similar in that they only cover partial expenses beyond what Medicare Parts A and B cover. Medicare Plan K will pay for 50 percent of hospice care and nursing facility co-pay expenses while Medicare Plan L will pay for 70 percent of these similar costs. Medicare Plan M will cover 20 percent of these same fees.

Plan N

Plan N allows enrollees to pay lower monthly premiums in exchange for increasing annual deductibles and some co-payments. These co-payments include a $20 co-pay for doctors’ exams and $50 co-payments for emergency-room trips.

Next Steps

Are you close to enjoying your well-deserved retirement? If so, now is the time to educate yourself on what Medicare doesn’t cover so that you don’t create financial burdens for yourself down the road.

Refer to this Medicare supplement plans comparison chart that summarizes the perks of each gap plan. Check in with your retirement financial planning adviser. They can help you plan for the necessary steps to sign up for the health care coverage that’s right for you when you reach this important life milestone.

Don’t forget to check our website for more helpful information on how to choose the best Medicare plan for you. Sweet Chapta is all about living the sweet life, no matter what phase of life you’re in. We’re here to help you launch that next great chapter!

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