Medicare: When “Coverage” Doesn’t Mean “Covered”

As Boomers inch their way towards Medicare, each day in the United States about 10,000 baby boomers are celebrating their 65th birthday – and as the “sandwich generation” is increasingly called upon to take care of their aging parents, there are a few things you ought to know about Medicare health insurance coverage.

Medicare is a federal health insurance program for:
• People 65 and older
• People under 65 with certain disabilities
• People with end-stage renal disease

According to CNBC, the average couple retiring today at age 65 will spend an estimated $280,000 on health care during the remainder of their lives. They may anticipate that Medicare will reimburse them for their medical expenses, but that’s not always the case. When most Americans turn 65, they have three basic options for health coverage: traditional Medicare; Medicare plus supplemental insurance to cover costs that Medicare doesn’t; or Medicare Advantage, a range of managed-care plans.

What Medicare Covers
The “Original” or “Traditional” Medicare program (Medicare Part A and Part B) offers basic coverage to help pay for things like doctor visits, hospital stays and surgeries. Lots of essentials are covered, but there are lots of items and services that are not included, such as prescription drug coverage, annual hearing and eye exams, care that’s needed when you’re traveling outside of the United States, and more (see below). To cover those gaps, it is advisable that you turn to other plans to supplement your Medicare coverage, either through Medicare or a private insurer, and other prescription drug plans.

Medicare covers 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. The problem is if they get sick or injured and require a long-term stay in a hospital or skilled nursing facility. In that case, they are less protected from costs than patients who have supplemental coverage or who are in Medicare Advantage. Suppose you are in a bad car accident and have to spend months in a skilled nursing facility, Medicare covers all of the costs for the first 20 days. For the next 80 days, you will have a co-pay of $185.50 a day.

“It’s not one size fits all,” notes John Mastronardi, Executive Director, The Nathaniel Witherell. “You can wind up with lots of out-of-pocket costs. There is some financial risk if you don’t supplement the basic Medicare plan. Sometimes people think they’ve ‘got coverage, yet they may not be entirely “covered.” There is a difference.” Many people buy Medigap or Advantage plans to lower costs.

Some specifics
Items and services that Medicare doesn’t cover either in whole or in part. These can be real budget-busters:
• Long-Term Care
• Most dental care*
• Eye exams related to prescribing glasses
• Dentures
• Cosmetic surgery
• Acupuncture
• Hearing aids and exams for fitting them
• Routine foot care
• Overseas care
• Even the difference between being kept at the hospital for observation instead of being admitted as a patient can result in surprise costs.
• Assisted Living
• Colonoscopies
• Eyeglasses and contacts

Basic Medicare (“Original” or “Traditional” 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 deductible of $1,340 per benefit period 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. It also comes with a $183 deductible. After it’s met, you typically pay 20 percent of covered services.
*Dental care is covered only in very limited circumstances, for example, if it is necessary as part of a covered procedure.

We’ll be presenting a series of blog posts on the subject of Medicare in coming weeks that will outline briefly some of the issues surrounding Medicare payments and reimbursement. That said, we encourage you to speak to healthcare professionals, read extensively on the subject, and go online to the CMS site (Centers for Medicare and Medicaid), all of which will be informational and helpful.

In addition to the CMS and other government websites, you can contact Admissions at 203-618-4232 or 203-618-4314 here at the Witherell for more information.

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