Image source: Flickr user Sean Davis.
For seniors, there may be no social program more important than Medicare. We see more big headlines on Social Security, which provides a monthly cash benefit to seniors during their golden years. However, Medicare benefits over one's lifetime can add up to hundreds of thousands of dollars.
A male and female couple turning 65 (the age of eligibility for Medicare for most Americans) in 2010, with an average income of $44,600 (in 2012 dollars) should receive an average of $180,000 and $207,000 in respective lifetime Medicare benefits, according to an Urban Institute study released in 2012. Women have longer life expectancies than their male counterparts, thus the gap in lifetime benefits between the two. By 2030, Urban Institute estimates that lifetime benefits for men and women could jump to $311,000 and $353,000, respectively.
Medicare's educational shortfall
But just as we've seen with Social Security, Americans' knowledge of the Medicare program can be sketchy at best -- and if consumers don't understand a program, they won't be able to take full advantage of it.
In 2013, UnitedHealthcare conducted a survey of 1,000 adults ages 65 and up, questioning their knowledge of the Medicare program. The results showed that about 20% find Medicare to be "confusing," with many respondents unaware of what each part of the program covers. A mere 5% were aware that Medicare Advantage plans, also known as Part C, cover hospital care, doctor visits, and prescription drug costs. Only about a third of respondents were aware of the fact that Part B, or medical insurance, provides coverage for doctor visits.
It would appear that the biggest obstacle the program faces is an educational shortfall. With that in mind, let's briefly go over what each "part" of Medicare covers and go through a list of 10 services and expenses that Medicare probably won't pick up the tab for.
Image source: Medicare.gov.
Understanding Medicare's structure
Medicare is broken into four primary components: Part A, Part B, Part C, and Part D. Let's tackle what each covers.
Part A, which is also known as hospital insurance, primarily covers qualified inpatient hospital stays, hospice care, and skilled nursing facility stays. Part A is also responsible for laboratory tests, surgery, and some aspects of home healthcare expenses. Part A typically has no premium attached for eligible Americans, with the exception being persons who have accrued less than 40 lifetime work credits.
Part B, also known as medical insurance, covers outpatient services, such as doctor and health-provider visits, as well as some preventive services, home healthcare, and durable medical equipment. Part B does have an attached premium that Americans pay on a monthly basis.
Part D (we'll get to Part C in a moment) is the prescription drug plan partnered with original Medicare. These are plans offered by private insurers who have partnered with Medicare to provide varying tiers of coverage, meaning consumers do have an opportunity to pick out a drug plan best suited for them.
Lastly, Part C is an alternative to Medicare known as a Medicare Advantage plan. Medicare Advantage plans replace original Medicare Part A and Part B, and also roll a prescription drug plan (Part D) into the mix. Medicare Advantage plans, which are offered by private insurers, also allow consumers to add vision, dental, and hearing plans, too. You could say Part C plans have everything seniors could want under one umbrella, which is one reason why they've grown in popularity over the past decade.
Image source: National Cancer Institute.
You're probably not covered for these expenses
The above provides some pretty basic guidelines on Medicare's structure, but it doesn't getting into the specifics of what might not be covered by original Medicare (Part A & Part B). Let's now take a closer look at 10 services Medicare Part A and Part B probably won't cover should you need care.
1. Out-of-country medical care
Medicare provides coverage to roughly 48 million Americans within the confines of the United States, but it'll offer you no assistance should you be traveling outside of the country. If you're planning to go overseas, you may want to look into some form of supplemental health insurance plan.
Image source: Centers for Medicare and Medicaid Services.
2. Hearing aids and routine hearing tests
The general rule when trying to figure out whether or not Medicare will cover an expense is deciphering whether it's elective or necessary. Under Medicare, hearing loss tests and hearing aid devices are considered elective, meaning you're likely to get stuck with the bill. A rare exception would be diagnostic hearing tests ordered by your doctor or healthcare provider to determine whether you need medical treatment. In such a case, Part B would help pick up the tab.
3. Routine eye care and most eyeglasses
Not to sound like a broken record, but routine vision care is classified as elective by Medicare. This means vision care is your responsibility. The one exception to the rule pertains to cataract surgery where an intraocular lens is implanted. In this instance, Part B will help pay for one pair of corrective glasses or contact lenses. Beyond this, vision care should be covered by a supplemental plan offered by private insurers.
4. Routine dental care and dentures
Marching down the line, routine dental care also falls outside the scope of Medicare Part A and Part B coverage. The one exception to the rule would be Part A, which would step in and help pay for certain dental services you might need when you're a patient in the hospital (i.e., emergency or complicated dental procedures).
5. Routine foot care
Again, the emphasis is on necessary versus elective. If a podiatrist orders necessary treatments for heel spurs, bunion deformities, or hammer toes, then you'll be covered by Part B. If, however, you want a corn or callus removed, or need some other maintenance procedure, the bill is on you.
Image source: Centers for Medicare and Medicaid Services.
6. Cosmetic surgery
If you're going under the knife to augment some aspect of your body, chances are that Medicare won't cover the cost. The exception is when the cosmetic surgery will repair an accidental injury or improve the function of a "malformed body part," as described by Medicare.gov. Examples include breast prostheses following a breast cancer-related mastectomy, eyelid reduction in cases where vision is substantially hindered, and potentially plastic surgery procedures following a gastric bypass.
7. Acupuncture, acupressure, and homeopathic treatments
Unfortunately for those who use acupuncture, acupressure, or homeopathic treatments, Medicare doesn't cover any of them, as they're deemed elective, rather than necessary treatments. The one exception would be limited chiropractic coverage under Part B.
8. Custodial care
Medicare Part A will help cover some of the expenses involved in skilled nursing facility care, including the changing of sterile dressings. But if all you need is custodial care (i.e., help with bathing, dressing, eating, and using the bathroom), then you'll be 100% responsible for the cost.
9. Certain diabetes supplies
Medicare Part B actually covers quite a bit when it comes to diabetes testing supplies and services. An eligible patient can get glucose strips and monitors, insulin, and yearly glaucoma, eye, and foot exams. However, it's not uncommon for diabetics to need more than insulin to manage their disease. Any medications beyond insulin are likely to fall under Part D coverage and would thus be outside the purview of Part B coverage.
10. Personal comfort items and services
Finally, Medicare doesn't cover personal comfort items and services. The Centers for Medicare and Medicaid Services provides examples of radios, televisions, or beauty and barber services as examples the consumer will be responsible for covering. Among the rare exceptions would be basic personal services performed within skilled nursing facilities, such as shaves, haircuts, and shampoos, which would be covered under Part A.
They say knowledge is power, so the more you know about Medicare, the better prepared you'll be during retirement.
