If your loved one is 65 or older, he or she may use Medicare to pay for healthcare costs. Medicare is an age-based health insurance program run by the federal government and paid for by employee and employer payroll taxes. While Medicare is very much like regular health insurance, participants (and caregivers) are sometimes surprised by what is not covered in the program.
Earlier this year, Fidelity estimated that a 65-year-old couple today would spend almost $300,000 USD during their retirement to pay for healthcare costs. As a caregiver or concerned family member, it is important to know what contributes to the costs of uncovered medical expenses in retirement. Here are the most common exclusions from Medicare your loved one may encounter:
Long-term care facilities. While Medicare Part A may pay for skilled nursing under certain conditions, the coverage is short-term. Expenses for long-term care (or extended care) facilities such as independent living, assisted living, skilled nursing or memory care units are not covered by Medicare. They may be included in a long-term care insurance policy, Medicaid or possibly other programs (e.g., veterans benefits).
Vision benefits. Eye exams are not included in Medicare, nor are eyeglasses or contact lenses. However, cataract surgery is reimbursed by Medicare, Part B.
Dental services. Dental exams, procedures and supplies are not part of Medicare.
Prescription Medication. Prescribed medications are covered if your loved one signed up for Part D, which is an additional coverage option. However, even if he or she has Part D, there is something known as the “donut hole.” This is a gap in coverage, but it is not as costly as it used to be. In 2019, when your loved one’s drug costs exceed $3,820, he or she must pay an additional $5,100 before reaching the catastrophic coverage level (i.e., 100% coverage). During this “donut hole” gap period, he or she will pay 5% of the drug cost for the remainder of the year or until reaching the catastrophic level.
Alternative medicine or therapies. Medicare does not pay for homeopathic remedies, chiropractic medicine, acupuncture, massage therapy, or other types of alternative treatments.
Medical Alert Systems. If your loved one has an alert system (wearable or in their home), this is not covered by Medicare.
Medical Tourism. Medical care outside of the U.S. is not included in Medicare. This includes personal travel, having a procedure elsewhere at a lower cost or treatment that is considered experimental in the U.S. However, some supplemental policies include expenses incurred outside of the U.S.
Hospice/palliative Care. Generally, hospice care is not covered unless ordered by a doctor for a terminal illness.
Some Healthcare Providers. Healthcare providers, including physicians and specialists, can “opt out” of the Medicare program. It does not mean that your loved one can’t continue go to that particular physician. However, the service will not be paid for by Medicare and will have to be paid entirely by your loved one. This is especially important to know if your loved one is about to enroll in Medicare. If his or her current physician does not accept Medicare, a good doctor will let the patient know well before age 65, so that he or she can find a new healthcare provider, if desired.
A Final Note:
A good resource to find healthcare providers and information on Medicare coverage is at www.medicare.gov. Additionally, your loved one’s insurance provider will have information on their website as well.
The exclusions listed above apply to “original” Medicare. If your loved one has an alternative plan such as Medicare Advantage (perhaps provided by a previous employer) or some other arrangement, some of the items above may be included as part of their program. It is also important to not confuse Medicare with Medicaid. Medicaid is a means (income)-based insurance plan that can be used separate from, or in conjunction with, Medicare. What is covered under Medicaid depends on the state where your loved one lives. However, certain things, like skilled nursing, are covered by Medicaid.