Thanks to Medicare, people aged 65 and older, and people with certain disabilities have guaranteed access to healthcare services. Before Medicare was signed into law, 1 in 2 people had no health insurance, meaning that they faced a gloomy future if they fell seriously ill or had an accident. The Medicare program has had a positive impact on the health of the nation.
Those with Medicare can choose to receive their health coverage through Original Medicare or a Medicare Advantage plan. The vast majority of people choose Original Medicare, but Medicare Advantage is rapidly gaining popularity.
Some people like open access to doctors and fewer administrative hassles. These are two of the benefits of Original Medicare. Other people want lower up-front costs and extra benefits that Original Medicare does not offer. This is the main reason for the growing popularity of Medicare Advantage.
How Does Original Medicare Work?
Original Medicare is the federal government’s health insurance program. The government covers medically necessary healthcare costs for its beneficiaries. Since its introduction in 1966, the national health insurance program has undergone numerous changes. However, it’s still organized into two parts:
1. Part A (Hospital Insurance)
2. Part B (Medical Insurance)
The combined benefits of Part A and Part B are Original Medicare. A person can go to any healthcare provider that accepts Medicare assignment (i.e., what Medicare will pay), anywhere in the United States or its territories. As a rule, it pays about 80% of covered costs, while the beneficiary pays the remaining 20% out of pocket. Beneficiaries also have the option to buy additional insurance called Medigap. It helps pay some of the deductibles and copayments in Original Medicare.
Understanding Medicare Part A and Part B
Medicare Part A covers a person’s stay and care in an inpatient facility. This includes general hospitals, acute-care/critical-access hospitals, rehabilitation facilities, skilled nursing facilities, and psychiatric hospitals. For most people, Part A is available premium-free. People how did not work and pay Medicare taxes for the required 10 years (40 quarters) will need to pay a monthly premium.
Medicare Part B is for medical services when a beneficiary goes to see a doctor or uses other outpatient health services. Examples of services covered by Part B include but aren’t limited to emergency ambulance transportation, laboratory testing, physical therapy, kidney dialysis, and durable medical equipment. In all cases, beneficiaries pay a monthly premium for Part B. People with higher incomes pay more. People who can’t afford the premium can get assistance through Medicaid or one of several Medicare Savings Programs.
U.S. citizens and residents can enroll in Medicare Part A and Part B at age 65, however, there is a penalty if they don’t sign up when first eligible. There is an exception to this rule. If a person has creditable coverage through an employer, they delay enrollment in Medicare until you retire and no longer have coverage. The same is true with Medicare Part D. These are private prescription drug plans.
Because These Services Aren’t Part of Original Medicare, People Must Pay Out-Of-Pocket or Buy Additional Insurance to Receive Them
Many routine health services aren’t covered under Original Medicare because they are not considered to be medically necessary. What follows are a few common healthcare services that Original Medicare does not cover that most people need. It’s important to consider these when trying to understand exactly how much Medicare covers and costs.
1. Prescription Drugs
Medicare Part B covers drugs prescribed by a doctor in an inpatient setting, but it does not cover outpatient medications. For this, there’s Medicare Part D. Under Medicare Part D beneficiaries can purchase a prescription drug plan that assists with prescriptions. However, these plans do not cover over-the-counter medications.
Specialty or unique medications demand prior authorization and command higher out-of-pocket costs. If a medication isn’t covered under the plan, the patient can resort to one of the following options:
- Ask the doctor for generics or substitutes
- Require a formulary exception to be made by the insurance company
- File an appeal in case the formulary exception is denied
- Join a separate Medicare drug plan (Plan D)
- Pay for the medication with their own money
Before reaching a final decision, it’s recommended to visit the official website for the U.S. Government’s Medicare program or reach out to the insurance provider.
2. Dental Care
Five decades later, Medicare still doesn’t cover dental care. The federal health insurance program doesn’t cover routine dental visits, fillings, teeth cleanings, dentures, or tooth extractions. The benefits should expend time and time again. Nevertheless, we’re witnessing the opposite. When it comes down to Medicare politics, expansions are rare. At any rate, participants in Plan A can rest assured knowing that emergency and complicated dental procedures are covered for.
3. Routine Hearing Care (Ear Exams or Hearing Aids)
Original Medicare doesn’t offer much coverage for routine hearing care. The national health insurance program might pay for a hearing test or treatment for a hearing-related condition, yet it will not pay for devices for enhancing hearing or exams to fit them. That’s the way things are. Hearing aids are expensive, to say the least. This is due to the amount of research and development needed to continually improve the technology.
Some Medicare Advantage plans include coverage for hearing services like hearing aids and other hearing care devices. There are several variations by plan, depending on factors such as:
- Monthly premium
- Copayments & co-insurance
- Out-of-pocket maximum
- The amount of coverage or coverage limits
It’s a good idea to compare plans before selecting one.
4. Routine Vision Care (Eyeglasses or Vision Correction)
Routine vision care services are excluded from Original Medicare coverage. This is rather disheartening. If not medically necessary, Medicare won’t pay for eye exams or eyeglasses. Nonetheless, if a person has a chronic eye condition such as glaucoma or cataracts, they don’t have to dig deep into their pockets. Drugs or eye drops may be prescribed to treat certain eye conditions. This is where Medicare Part D comes into play. Yet again, the patient has to pay for 20% of the costs.
5. Routine Foot Care
Routine foot care isn’t a Medicare benefit. It won’t pay for routine or preventative foot care, orthopedic shoes, or treatment for flat feet. It’s assumed that routine food care is not medically necessary. Therefore, they’re excluded from the coverage, with certain exceptions. If the beneficiary is at an increased risk of infection and/or injury if a non-professional provides the aforementioned services, Medicare will make an exception to the rule.
6. Cosmetic Surgery
Health insurance providers don’t typically cover cosmetic procedures because they’re not vital to maintaining good health. If the only purpose is to improve appearance, the surgery isn’t medically necessary. The good news is that reconstructive surgery may be covered provided that the procedure improves physical function or corrects a congenital problem or one that’s been caused by an accident. An example would be a breast prosthesis for breast reconstruction following mastectomy.
7. Holistic Medicine
For many individuals, holistic medicine is a viable alternative to use instead of/alongside traditional medicine. An example is chiropractic care for spinal manipulation. It places focus on healing the entire person – mind, body, and spirit. While holistic medicine continues to grow in popularity in the U.S., Medicare doesn’t provide coverage for this type of treatment because it’s not a prerequisite to any inpatient or outpatient procedure. Someone who falls into the category of people who prefer alternative medicine might need to seek other sources of coverage.
Older adults have a tendency to develop problems from standard medical treatment, dealing with more side effects and complications. The great part about holistic medicine is that it’s less invasive as opposed to conventional medicine. Many different areas make up the practice of alternative medicine, including:
- Chiropractic care
For the time being, they don’t benefit from scientific support, so they can’t be considered safe and legitimate treatment options. Medicare offers limited coverage for chiropractic care (only when it’s necessary to cover a subluxation) and acupuncture (for chronic low back pain).
8. 24-Hour Care at Home
Providing care in the home allows senior citizens and people with disabilities to continue to live with dignity where they’re most comfortable. Attention needs to be paid to the fact that 24-hour care at home isn’t covered by Original Medicare. The maximum amount of weekly Medicare is 28 hours, although, in some situations, it will pay for 35. The national health insurance program doesn’t cover custodial care, household services, or meal delivery.
9. Services Paid for By Someone Else
Medicare interacts with other payers when beneficiaries have other sources that are legally liable for supporting the medical costs. Examples include private insurance, Medicare, workers’ compensation, and compensation received from a personal injury lawsuit. Nonetheless, there’s a limit on what Medicare will pay for. For instance, it doesn’t reimburse community mental health centers, although similar clinics are reimbursed.
10. Medical Care Outside the U.S.
More often than not, Medicare doesn’t pay for health care or supplies obtained outside the United States. By “outside the U.S.”, it’s understood anywhere other than the 50 states and its territories. U.S. territories include American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. As highlighted earlier, exceptions can be made to the rule. Here are the situations when Medicare pays for certain types of health care services:
1. There’s a medical emergency and the foreign hospital is closer than the U.S. hospital to treat the illness or injury.
2. A person travels through Canada without unreasonable delay, between Alaska and another state, when a medical emergency arises.
Medigap Limits Original Medicare Out-of-Pocket Costs
People need to be aware of the fact that there are significant gaps in Original Medicare. Despite the fact that it covers a broad range of services, there are some non-negligible expenses that it doesn’t protect people from. In this case, individuals need to cover themselves with supplemental insurance. Without a supplement plan (Medigap), Medicare beneficiaries are directly responsible for the deductibles, copayments, and coinsurance for both Part A and Part B coverage. Without a Medigap insurance policy to cover these costs, inpatient care can easily run the bill up into thousands of dollars. And there are no limits.
In the absence of Medicare supplemental insurance, medical costs can have a devastating impact. Supplemental insurance can be purchased from private insurance companies. There are 10 standardized plans approved by the federal government. However, it’s important to know that coverage is only guaranteed while a beneficiary has guaranteed issues right. This is generally a 6-month period that starts on the month they turn 65. After that the guaranteed issue right expires, insurance carriers can turn down an application for medical reasons.
Alternatively, People Can Choose a Medicare Advantage Plan
Medicare Advantage is the private health insurance alternative to Original Medicare. As far as Medicare Advantage plans are concerned, the evidence tends to suggest that insurers delay and even deny much-needed care. Let’s not even talk about the unpredictable out-of-pocket costs that can arise. In any case, it’s possible to make changes to the Original Medicare plan anytime and choose a plan during the enrollment periods.
“People thinking about moving from Original Medicare to an Advantage plan need to think carefully,” explains David W. Bynon, author of Why Medicare Advantage Plans are Bad. “It’s easy to look at all of the extra benefits, and the low premiums, and think it’s a great deal. And it might very well be until you get hospitalized.” A recent study by the Kaiser Family Foundation echoes David’s assessment. The study found that half of all Medicare Advantage enrollees would incur higher hospital costs in a Medicare Advantage plan.
In his book, David goes through all of the different scenarios. He suggests that people carefully consider all of the Medicare costs, in both types of Medicare, before they give up their government benefits, which he suggests are best unless you are poor or super healthy. Most insurance professionals agree that Original Medicare plus a Medicare Supplement Plan G is the best coverage older Americans can get. For the poor, institutionalized, and chronically ill, Medicare has a separate category called Special Needs Plans.
Extra Benefits Are Offered for Most Medicare Advantage Plans
Medicare Advantage plans are allowed to include “extra” benefits, which are not typically offered by Medicare Part A and Part B. Extras covered include:
- Prescription Drug Coverage
- Routine Dental, Vision, And Hearing Care
- Transportation To Medical Appointments
- OTC Supplies & Medications
- Nicotine Replacement Therapy
- Adult Day-Care Services
- Social Worker Teleservices
- Home Safety Evaluations/Maintenance Services
The list isn’t exhaustive, just to be clear.
Legally, it’s not possible to have Medigap coverage with a Medicare Advantage plan. Nevertheless, a person is able to switch between the two. Medicare Advantage plans have a low monthly premium for those who receive Social Security benefits. When someone enrolls in a Medicare Advantage plan, they continue to pay premiums for Medicare Part B. It’s essential to pay the premiums on time to avoid losing coverage. Automatic deductions are the best way to avoid missing premiums.
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There’s no limit to out-of-pocket costs in Original Medicare. With Medicare Advantage, it’s a completely different story. All plans have annual out-of-pocket limits, but it’s important to keep in mind that these limits vary from year to year. Taking time to compare the various plans available can turn out to be extremely helpful.