What is Not Covered by Medicare and How to Plan for Your Future

If you are looking into your Medicare options, it’s hard to sift through all the information. It is helpful to start by understanding what is not covered Medicare’s basic plan (Medicare Part A) and what is not covered by Medicare at all. Then, you can begin to make decisions about additional coverage.

Not Covered by Medicare

Long-Term Care

Medicare doesn’t cover long-term expenses. Long-term care is one of the most important considerations when planning for your future support because it will likely be the most expensive. On average, long-term care costs $47,000 per year out of pocket. Men will spend 2.2 years in long-term support over the course of their lifetime. Since women have a longer life expectancy, they will need nearly twice as much in long-term support (3.7 years) over the course of their lifetime. 

This means the average couple will spend about $276,400 in long-term care. There are a few exceptions to skilled nursing services, but in general, this is an expense you will have to prepare to cover.

Prescription Drugs

This may come as a shock, but Medicare doesn’t cover outpatient prescription drugs. Without preparation, this can become an enormous problem. One way to prepare is to make sure you stay up to date on your regular doctor and dental visits to keep on top of any potential future problems. 

Dental, Vision, and Hearing Care

Medicare doesn’t cover dental, vision, or hearing care. If you are big on your regular visits to the dentist to get cleanings or have dentures and need more dental care you will have some trouble swinging the expense through Medicare. 

This is also true for vision. Medicare A plans don’t cover vision needs like glasses, contacts, or exams. Obviously, this can cause a little trouble for people who need glasses or contacts but it becomes a bigger problem for people with medical conditions that affect their eyes (like diabetes and cataracts).  

And finally, the same goes for hearing and ear care as well. If you have hearing aids you will want to find a plan for supplemental care.

Hospital Observation Care

This one can be a little tricky and requires some explanation regarding whether a hospital admits you or keeps you for observation.

If you have been admitted to a hospital and stay for three days, the additional skilled nursing care will be covered under Medicare (A), which is basic medicare. However, if you are not admitted to the hospital but just kept for observation, your outpatient care won’t be covered. This includes any rehab you may need after your hospital visit. If you’re preparing for a stay in rehab, here’s what to expect after you get discharged.

How to Plan for Your Future

So, now that you know what Medicare A doesn’t cover, what can you do about it? You begin by exploring some of the options through Medicare B, C, and D.

The Basic Plans:

• Medicare Part A: covers hospital stays, skilled nursing, hospice, and some health services with a $1,300 + deductable.
• Medicare Part B: covers doctor’s visits, outpatient services, and medical equipment. Monthly premiums are around $134 for people making up to $85,000 a year.
• Medicare Part C: coverage can vary but usually includes doctor visits, dental visits, visual exams, and hearing exams and often uses co-pays.
• Medicare Part D: covers prescription drug costs with co-pays.

As you can see here, the basic Medicare Part A only covers the essentials and everything we have discussed so far are not covered under this basic plan. However, each of the supplemental plans is designed to help mitigate these extra costs. Similar to an HSA, Medicare offers a Medical Savings Account (MSA), which is designed to help individuals save for medical expenses. You won’t be able to get an MSA if any of the following applies:

• You have health coverage that would cover the Medicare MSA Plan deductible. This includes benefits under employer or union retiree plans.
• You get benefits from the U.S. Department of Defense ( TRICARE ) or the U.S. Department of Veterans Affairs.
• You’re a retired Federal government employee and part of the Federal Health Benefits Program (FEHBP).
• You’re eligible for Medicaid.
• You have End-Stage Renal Disease (ESRD). However, even if you have ESRD, you can join a Medicare MSA Plan if both of these apply:
  • You’re a former enrollee in a Medicare Advantage Plan that left Medicare.
  • You haven’t joined another Medicare Advantage Plan.
• You’re currently getting hospice care.
• You live outside the U.S. more than 183 (total) days a year.

Taking the Next Steps

So, how do you prepare for your future? Well, if you’ve made it this far you’ve already taken the first step; do your homework. Good job! Now, here are your next steps:

1. Know which Medicare plans you want before you enroll and how much they will cost.
2. Talk to your doctor about your possible health risks and preventative care.
3. Decide if an MSA is right for you to further help supplement any unexpected costs.
4. Account for any out of pocket expenses (this will depend on what you learn in steps 1-3 with special considerations to exclusions to MSA’s).

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