Most seniors over estimate the healthcare coverage provided by Medicare versus what they must pay themselves. This simple fact leaves many people unprepared in their retirement years. The reality is that Medicare pays for about 51 percent of the total cost of healthcare.
The confusion is the fact that Medicare claims it pays 80 percent. It pays 80 percent of the services it covers. Unfortunately, it does not cover prescriptions, dental, hearing, vision and many other common healthcare services that most seniors require.
What Does Medicare Cover in 2018?
If you have Medicare now, or if you will soon qualify, you need to know the basics, including what’s covered and what isn’t. Once you understand the four core parts, and the additional insurance options available, you’ll be on your way.
The Medicare program has all of your health insurance coverage options categorized into four parts, A, B, C and D. Medicare parts work together to give you the health care coverage options you need for your particular situation (health and financial). One part is mandatory (Part A), but the others are optional. Here’s what each part offers:
- Part A (Hospital Insurance) is insurance that pays for your inpatient care while hospitalized. Medicare Part A also pays for your skilled nursing facility, hospice, and home care, should you ever need it. This insurance covers about 80% of all hospital and in-home health care expenses. You are required to pay the remainder, including your annual deductible, co-pays and co-insurances.
- Part B (Medical Insurance) pays for your doctor visits and other outpatient medical care. Medicare Part B also covers many preventive services (see below), including your annual checkup. For the services that are covered, Part B pays 80% and you pay the remainder, including any overages (from providers that do not accept Medicare’s standard rates).
- Part C (Private Health Insurance), more commonly called Medicare Advantage, are private health insurance plans approved by Medicare. If you enroll in an Advantage plan you are choosing a traditional HMO or PPO policy that replaces your Part A and Part B fee-for-service coverage. The “advantage” is that your medical bills are generally lower and more predictable because you have full coverage.
- Part D (Medicare Prescription Drug Coverage) is prescription medication insurance. Medicare Part D helps to lower your prescription drug costs. Part D plans are sold by private insurance companies with strict limitations on deductibles and maximum annual benefit.
As you can see, Parts A and B are your core health insurance. Together they are often called Original Medicare. It’s not full healthcare coverage (pays slightly less than 80% for most people), but it is the most important part.
The new ObamaCare Affordable Care Act law is changing many aspects of Original Medicare. More services have been added that help keep seniors healthy. At the same time, new restrictions and limitations are being added that help reduce the cost to the federal government.
For most seniors, the changes imposed by ObamaCare force a critical decision. You can use your Original Medicare as-is, along with Part D, and risk huge hospital bills if you become seriously ill. Alternatively, you can switch to private health insurance or supplement your Original Medicare.
Upgrading Original Medicare to Full Coverage Healthcare
If you need more than the basic coverage offered, you have two options. The first option is a Medicare Advantage plan with or without prescription coverage. This option completely replaces your Part A and B coverage with private health insurance. The second option is a Medigap supplement insurance policy combined with a Part D Plan.
Here are the most common healthcare services that Original Medicare does not cover:
- Most dental care
- Routine eye care
- Routine hearing tests
- Most care while traveling outside the United States
- Custodial care (help with bathing, dressing, eating, etc.)
- Long-term care
- Cosmetic surgery
- Most chiropractic services
- Routine foot care
Original Medicare does pay for the following preventive services:
- “Welcome to Medicare” Preventive Visit (one-time)
- Yearly “Wellness” Visit
- Abdominal Aortic Aneurysm Screening
- Bone Mass Measurement
- Breast Cancer Screening (Mammogram)
- Cardiovascular Screenings
- Cervical and Vaginal Cancer Screening
- Colorectal Cancer Screenings, including Fecal Occult Blood Test, Flexible Sigmoidoscopy
Colonoscopy, and Barium Enema
- Diabetes Screenings
- Diabetes Self-Management Training
- Flu Shots
- Glaucoma Tests
- Hepatitis B Shots
- HIV Screening
- Medical Nutrition Therapy Services
- Pneumococcal Shot
- Prostate Cancer Screenings
- Tobacco Use Cessation Counseling (counseling for people with no sign of
Those are the basics. To learn more about each Part and the coverage details, read: