Key Takeaways
- Medicare Part A and Part B might not cover as much as you think, leaving you vulnerable to high out-of-pocket expenses.
- Being aware of the gaps in Medicare before you need care can help you avoid surprise costs and make smarter decisions.
Medicare Part A: What’s Really Covered?
Medicare Part A is often thought of as the safety net for hospital care. After all, it covers inpatient hospital stays, skilled nursing facilities (SNF), hospice care, and some home health services. But here’s the thing—while Medicare Part A does cover a range of services, the devil is in the details. Many people don’t realize that it’s far from free, and there are gaps that you might not see coming until you’re stuck with a hefty bill.
Your Hospital Stay Isn’t Free
Let’s talk about that hospital stay. Medicare Part A kicks in after you pay a deductible, which in 2024 is $1,632 per benefit period. A benefit period begins when you’re admitted and ends when you haven’t received inpatient care for 60 days. So, if you’re unlucky enough to need two hospital stays within a few months? You could end up paying that deductible twice. Not so comforting, right?
After you hit the deductible, you’ll still pay daily coinsurance if your stay exceeds 60 days. Medicare only covers up to 90 days per benefit period, and after that, you’re dipping into your 60 lifetime reserve days. Once those are gone, you’re on your own, and the costs can skyrocket. Even with Medicare Part A, a long hospital stay can leave you with more bills than you might expect.
Skilled Nursing Facility Coverage Is Limited
A lot of people assume that if they need time in a skilled nursing facility after a hospital stay, Medicare has them covered. This is true—up to a point. After a three-day inpatient hospital stay, Medicare Part A covers up to 100 days in a skilled nursing facility. But here’s the catch: after the first 20 days, you’ll start paying daily coinsurance of $204, and after day 100, Medicare stops paying altogether. So, if your recovery takes longer than 100 days, you’re looking at some serious out-of-pocket expenses.
The Gaps in Medicare Part B Coverage
Medicare Part B covers outpatient services, doctor visits, preventive care, and some home health care. You’d think this would cover a lot of the care you need, but there are some significant gaps that aren’t immediately obvious when you first sign up.
You’re Paying 20% Coinsurance, No Matter What
One of the most important things to know about Medicare Part B is that after you meet your deductible—$240 in 2024—you’re on the hook for 20% of the Medicare-approved amount for most services. This includes everything from doctor visits to outpatient procedures, durable medical equipment (like walkers or oxygen tanks), and even chemotherapy treatments. And here’s the kicker—there’s no cap on how much you could pay in a year. If you need a lot of care or expensive services, that 20% can add up to thousands of dollars quickly.
Preventive Services Aren’t Always Free
Medicare Part B touts its coverage of preventive services like flu shots, cancer screenings, and annual wellness visits, which are fully covered. But what you might not know is that if your doctor orders additional tests or services during your preventive visit, those may not be fully covered. Suddenly, a “free” wellness visit can turn into a bill for lab tests or other diagnostic procedures. It’s a sneaky surprise that can catch you off guard, especially if you’re not expecting it.
Outpatient Drugs Aren’t Always Covered
If you’re receiving drugs during an outpatient visit, like chemotherapy or infusion therapy, Medicare Part B will cover a portion of those costs. But here’s the part that often surprises people—Medicare Part B doesn’t cover prescription drugs that you take at home. For that, you’ll need Medicare Part D or another form of drug coverage. Without it, those medications are fully out-of-pocket, which can get expensive quickly, especially for long-term treatments.
Hidden Costs That Catch You Off Guard
Lack of Out-of-Pocket Maximum
One of the biggest gaps in both Medicare Part A and Part B is that neither has an out-of-pocket maximum. In other types of health insurance, like those you may have had before Medicare, once you reach a certain spending limit in a year, your insurance covers 100% of the remaining costs. But with Original Medicare, there’s no such limit. That means if you have a bad year—let’s say you need surgery, rehabilitation, and ongoing treatment—you could keep racking up medical bills all year long with no end in sight. This is one of the most surprising and frustrating gaps in Medicare that many people don’t realize until it’s too late.
Home Health Care Isn’t Unlimited
While Medicare Part A and Part B both cover certain types of home health care, the coverage isn’t unlimited. For Medicare to cover it, you need to be considered homebound and need part-time or intermittent skilled nursing care or therapy. And while Medicare will cover these services, it’s only for a limited period and under specific conditions. Once you’ve hit those limits, the costs fall to you.
What About Medicare Doesn’t Cover? The Big Exclusions
Long-Term Care
This is probably the biggest gap in Medicare coverage that catches people off guard. Medicare doesn’t cover long-term care, which includes help with daily activities like bathing, dressing, and eating. If you need to move into a nursing home or require long-term home care, Medicare will not cover it. This is where a lot of people end up in financial trouble because the costs of long-term care can be astronomical. Planning for long-term care should be on everyone’s radar when they’re thinking about their healthcare needs in retirement.
Dental, Vision, and Hearing
You might assume that Medicare covers everything you need as you age, but that’s not the case. Original Medicare doesn’t cover routine dental care, vision care (like eye exams for glasses), or hearing aids. So, if you need a root canal, new glasses, or a hearing aid, you’ll be paying out of pocket unless you have separate insurance for these services. It’s one of those gaps that can take a big bite out of your budget, especially as these costs tend to increase as you get older.
Overseas Travel
If you’re planning on enjoying your retirement by traveling the world, don’t count on Medicare to have your back. Original Medicare generally doesn’t cover health care outside of the U.S., which means if you get sick or injured while traveling abroad, you’ll have to pay for it yourself. Some Medigap plans offer limited coverage for emergency care abroad, but it’s something you need to consider if travel is part of your retirement plan.
Making Sure You’re Not Caught Off Guard
With all these gaps in Medicare, what can you do to avoid being blindsided by medical bills? One of the most important steps is to plan ahead. Knowing what Medicare covers—and more importantly, what it doesn’t—can help you make smarter decisions about your healthcare needs in retirement.
Review Your Options Annually
Medicare’s Annual Enrollment Period (AEP) runs from October 15 to December 7 each year. During this time, you can make changes to your Medicare coverage, whether it’s switching from Original Medicare to a different plan, adding drug coverage, or exploring supplemental insurance options. Even if you think your current coverage is fine, it’s worth taking the time each year to review your options. Costs and coverage can change from year to year, so don’t let complacency lead to surprises later on.
Consider Supplemental Insurance
If you’re sticking with Original Medicare, you might want to think about adding a Medicare Supplement plan (also known as Medigap) to cover some of the out-of-pocket costs that Medicare doesn’t pay for, like deductibles, coinsurance, and those sneaky gaps we’ve talked about. It can help give you peace of mind, knowing that your financial exposure is limited, especially if you’re facing a major medical event.
Plan for Long-Term Care
Since Medicare doesn’t cover long-term care, it’s important to have a plan in place for how you’ll handle these costs if the need arises. Whether that’s through savings, long-term care insurance, or another strategy, addressing this gap now can save you a lot of stress and financial trouble down the road.
Don’t Wait to Find Out the Hard Way
Understanding what Medicare Part A and Part B don’t cover is just as important as knowing what they do cover. If you wait until you’re in the middle of a medical crisis, it may be too late to avoid the financial fallout. Stay informed, plan ahead, and take action before the gaps in Medicare catch you off guard.
Contact Information:
Email: byourinsuranceplan@gmail.com
Phone: 9549140977
Bio:
Betty Louis is a licensed health and life insurance agent in FL, TX, AL, IN, and NJ, with a wealth of experience in the industry. Renowned for her personalized approach, she prioritizes understanding each client’s unique needs and goals, ensuring they receive tailored coverage that suits their situation. With her extensive knowledge of insurance products, Betty offers valuable insights and guidance, helping clients navigate the often complex landscape of health and life insurance.
Committed to serving her community, Betty enjoys educating others about the importance of insurance and planning for the future. Her dedication to service and integrity has earned her numerous accolades. Outside of work, Betty enjoys volunteering and spending quality time with her family, further emphasizing her belief in the importance of community and support.
Disclosure:
Betty Louis is a licensed health and life insurance agent. The information provided in her bio is for informational purposes only and does not constitute financial advice. Coverage options and eligibility may vary based on individual circumstances. As a licensed professional, Betty is available to discuss available options and provide personalized guidance.
