Ideally, retirement is supposed to be time to relax and enjoy life, free from everyday worries. If you’ve got your health care covered, that goes a long way towards giving you peace of mind.
The hard truth is that Medicare doesn’t cover all health costs for people 65 and older. According to a Mount Sinai School of Medicine study, during the last five years of their lives, as many as a quarter of Medicare recipients spend more than the total value of their assets on out-of-pocket health care expenses – expenses like co-payments, coinsurance and costs that aren’t covered by Medicare.
Under Original Medicare (Part A and Part B), the federal government pays your health providers for medically necessary procedures, equipment and care.
Part A – mainly for hospital coverage, includes some nursing care and hospice costs.
Part B – covers physician appointments, labs and testing and medical equipment.
But, it’s what they don’t cover that can add up in the thousands of dollars a year.
What’s Not Covered by Medicare
Many health expenses covered by private health insurance policies are excluded from Medicare Part A and Part B. Items not covered include:
- Hearing exams and aids
- Eye exams related to corrective lenses
- Long-term care
- Custodial care (bathing, feeding and helping patients in and out of bed)
If you’re in a care facility, Medicare covers “skilled care” — care provided by a medical professional. Custodial care is only covered while you also need skilled care. Custodial and skilled care are only covered for a limited time.
Your costs in Original Medicare:
- Days 1–20: You pay $0 for each benefit period.
- Days 21–100: You pay $152 coinsurance per day of each benefit period.
- Days 101 and beyond: You pay all costs.
Other Options to help pay for costs that Medicare won’t:
Medicare Advantage, also known as Part C, is 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, but may offer additional coverage options.
Just how much a Medicare Advantage plan will cover depends on the policy. It might offer the vision, dental, and hearing coverage that Original Medicare doesn’t. A Part C policy rarely covers long-term care. Like Original Medicare, it typically only pays for nursing care that’s medically necessary and only for a limited amount of time.
Medicaid is a joint federal and state program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, like nursing home care and personal care services. The program’s coverage varies by state and can be found through Healthcare.gov.
In all states, Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities. In some states the program covers all low-income adults below a certain income level.
Be able to pay for health care costs during retirement years requires planning and knowing what kind of coverage that will work best for you.