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What Medicare Covers and What It Doesn’t

Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.  There are certain services that Medicare covers, and certain services Medicare doesn't cover.

what Medicare covers

It's extremely important to know what Medicare covers as one nears retirement age.  Medicare is broken down into categories; Part A, Part B, Part C, and Part D.  Here's what each mean (from Medicare.gov):

What Medicare Covers

Medicare Part A (Hospital Insurance)

Part A covers inpatient hospital stays, short term care in a skilled nursing facility, hospice care, and some home health care.

Medicare Part B (Optional Medical Insurance)

Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services.

Medicare Part C (Optional Medicare Advantage Plans)

A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations (HMO's), Preferred Provider Organizations (PPO's), Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.

Understanding Medicare Coverage

Medicare Part D (Optional Prescription drug coverage)

Part D adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are offered by insurance companies and other private companies approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.

What Medicare Doesn't Cover

Jim T. Miller, syndicated columnist, for NBC Today (and creator of SavvySenior.org) wrote up a nice list on HuffPost titled “What Medicare Doesn't Cover“. We like this list because it's simple, to the point and provides a resource where you can find out if your particular healthcare service is covered by Medicare (or not). Among the items Jim discusses are routine dental, vision and hearing care.  At a time when each of these functional areas are failing us, we're forced to find solutions on our own.

RELATED: Walkman Generation Pays the Ultimate Price – Hearing Loss

Jim also offers advice on carrying supplemental insurance to plug the gaps in coverage:

Also keep in mind that even if Medicare covers a service or item, they don’t usually pay 100 percent of the cost. Unless you have supplemental insurance, you’ll have to pay monthly premiums as well as annual deductibles and copayments. Most preventive services, however, are covered by original Medicare with no copays or deductibles. – Jim Miller, HuffPost, 1/21/15

Medicare Doesn't Cover These 8 Services

You can also find a similar list of items Medicare doesn't cover over at Medicare.gov.  Their list is titled, “What's not covered by Part A & Part B“.  Here's a list of the 8 health care services Medicare does not routinely cover:

  • Long-term care (also called custodial care)
  • Most dental care
  • Eye examinations related to prescribing glasses
  • Dentures
  • Cosmetic surgery
  • Acupuncture
  • Hearing aids and exams for fitting them
  • Routine foot care

So, while Medicare provides coverage for many services, you are on your own for anything above the neck.  If you anticipate having any of these routine services (most of us will), be prepared to pay out of pocket or plan on purchasing a separate policy if it could save you money.

Medicare Facts and Figures

*Update 5/24/2016- Since the original post was written in 2010, these figures have greatly increased.  Today, Medicare rolls are up to 55 million older adults and people with disabilities.  The Medicare budget still accounts for 15% of federal spending in the US.  In 2015, Medicare spending equalled $632 billion, that's up $128 billion since 2010. Ten years from now, Medicare spending is projected to grow to $1,085 billion.  There is much discussion and proposed about Medicare restructuring to keep up with the growth in enrollment… stay tuned.

Medicare Facts and Figures, 2010

Did you know… That Medicare was created in 1965 as a federal health insurance program for those age 65 and older, regardless of income or medical history?  Today (2010) Medicare covers 46 million Americans, and will encompass 15% of our federal budget.  That's $504 BILLION dollars (says the CBO)!  The Kaiser Family Foundation publishes an annual medicare fact sheet called “Medicare At A Glance” which we will summarize in this post.  Click through (read more) to explore further… The following facts and figures are credited to The Henry J. Kaiser Family Foundation's Medicare Fact Sheet entitled “Medicare At A Glance

Demographics of Medicare Recipients:

  • Medicare covers a diverse population- 47% have incomes below 200% of the poverty line, and 44% of recipients have 3 or more chronic conditions.  83% of the Medicare insured are under age 65 and permanently disabled.

Medicare Structure:

  • Part A–  Part A covers inpatient hospital stays, skilled nursing facility stays, home health visits, and hospice care.
  • Part B–  Part B pays for physician visits, outpatient services, preventative services, and home health visits.
  • Part C–  Refers to the Medicare Advantage Program where beneficiaries can enroll in private insurance plans (like HMO's) where they can receive additional benefits like hearing exams and other services.
  • Part D–  Is the voluntary government subsidized outpatient prescription drug benefit plan.  Part D can also cover individuals with very low incomes.

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