Medicare Doesn’t Cover Everything…

Medicare Doesn’t Cover Everything…

Fidelity Investments estimates that the average couple retiring today a will spend $280,000 on health care during the remainder of their lives. Most people are counting on Medicare to cover their health expenses as they age. Take a look below at some items that are not covered by Medicare:

Teeth, eyes and ears

Generally speaking, original Medicare does not cover dental work and routine vision or hearing care.

This means it does not cover dentures, which can run anywhere from about $1,000 to north of $5,000 for a complete set. And while a routine cleaning and X-ray could set you back about $200 and a filling runs about $150 or $200, a single tooth implant can be upward of $4,000.

However, if a dental condition involves an emergency or complicated procedure, it could be covered.

Same goes for routine vision checks. If you need glasses, it's generally not covered. Yet if you have an eye condition like glaucoma or cataracts, basic Medicare will cover your care.

Whether you choose an Advantage plan or stick with basic Medicare, you can purchase a separate policy that gives you more extensive coverage.

For the jet-setters

If your later-in-life plans include hopping from country to country, be aware that basic Medicare generally does not cover care you receive outside the United States.

A heart attack overseas or having to be transported by land or air can be extremely expensive.

If you choose an Advantage Plan, emergencies are often covered worldwide. However, routine care received overseas may not be.

In this situation, you can look into travel-medical policies specifically targeted at the 65-and-over crowd. Depending on the specifics of the coverage and your age, these policies can cost about $175 or more a month.

Long-term care

On average, an American turning 65 today will spend $138,000 in future long-term-care costs, according to a 2017 Bipartisan Policy Center report. Long-term care includes things like daily help with bathing and eating.

In general, Medicare does not cover long-term care. There are insurance policies that cover it, although they can be pricey. And the older you are, the more they cost.

For instance, rates for a couple, both age 55, would pay about $2,500 for a yearly policy that offers $164,000 in coverage to each policy holder, according to the American Association for Long-Term Care Insurance. If they are age 60, that amount stands at about $3,400.

Observation vs. admission

If you end up in the hospital, make sure you know whether you have been admitted or are there for observation. It can make a big difference in what Medicare pays for if your after-care involves skilled nursing.

Say you trip and fall and end up in the hospital. You're there for a few days. After you leave, you need rehab for your injury.

Such skilled nursing care is covered through Medicare Part A if you have been admitted to the hospital for at least three days. However, if the hospital keeps you there for observation instead of admitting you, your rehab would not be covered.

There are hospital indemnity plans that can cover up to $600 per day for a set number of days. Depending on your coverage, they can run about $35 a month and higher.

Loose ends

Medicare also generally does not cover acupuncture, cosmetic surgery or routine foot care.

Overall, the important thing is to head into your Medicare years armed with knowledge so you can avoid surprises. Make sure you plan in advance and speak with a knowledgeable Med-Care Senior Insurance Agent about all of the options you have with Medicare.

Medicare Part D Coverage Gap aka “The Donut Hole”

When it comes to Medicare prescription drug coverage, many Seniors have questions surrounding the Medicare Part D coverage gap, also known as the “donut hole.” The coverage gap is a temporary limit on what most Medicare Part D Prescription Drug Plans or Medicare Advantage Prescription Drug plans pay for prescription drug costs.

The coverage gap applies to both stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug Plans, but not everyone enters it. Understanding the Coverage Gap (and possibly avoiding it) is essential to keeping your drug costs low and in line with your yearly budgeted spending.

Stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug plans can have the following four coverage phases, as applicable:

  • Deductible phase: For most stand-alone Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug plans, you’ll pay 100% for medication costs until you reach the yearly deductible amount (if your plan has one). After you reach the deductible, the Medicare plan begins to cover its share of prescription drug costs. The deductible amount may vary by plan, and some plans may not have a deductible. If your Medicare plan doesn’t have a deductible, then you’ll start your coverage in the initial coverage phase.
  • Initial coverage phase: After you’ve reached the deductible, you’ll enter the initial coverage phase, where you will pay the plan’s cost share for covered medications. For example, if your plan benefit includes a 25% coinsurance in this phase and you’re taking a medication that costs $400 a month, your out-of-pocket-cost would be approximately $100 a month. Once you and your plan have spent $3,750 in 2018 for covered drugs, including the deductible amount, you’ve reached the initial coverage limit and have entered the coverage gap or “donut hole”. Please note that most Part D plans charge fixed copayments during the Initial Coverage Phase instead of the 25% coinsurance. Drugs are categorized into Tier Levels and the beneficiary pays the copay associated with the Tier Level.
  • Coverage gap, also known as the “donut hole”: Not everyone will reach this phase. It begins when you have spent down the $3,750 that the plan allows you as an initial drug benefit. Once you enter the coverage gap, the plan will track what you pay towards your drugs, the drug companies pay towards your drugs, and what you already paid to spend down the initial $3,750. You’re out of the coverage gap once your yearly out-of-pocket drug costs reach $5,000 in 2018. Once you have spent this amount, you’ve entered the catastrophic coverage phase.
  • Catastrophic coverage phase: Again, not everyone will reach this phase; it begins if your out-of-pocket costs reach $5,000 in 2018. During the catastrophic coverage phase, you’ll only pay a small coinsurance or copayment for covered prescription drugs for the remainder of the year.

Here are a few highlights of the defined standard Medicare Part D plan changes from 2017 to 2018. The CMS "Part D Benefit Parameters for Defined Standard Benefit" is the minimum allowable Medicare Part D plan coverage.

  • Initial Deductible:
    will be increased by $5 to $405 in 2018.
  • Initial Coverage Limit (ICL):
    will increase from $3,700 in 2017 to $3,750 in 2018.
  • True Out-of-Pocket Threshold (or TrOOP):
    will increase from $4,950 in 2017 to $5,000 in 2018.
  • Coverage Gap (donut hole):
    begins once you reach your Medicare Part D plan’s initial coverage limit ($3,750 in 2018) and ends when you spend a total of $5,000 out of pocket in 2018.
  • In 2018, Part D enrollees will receive a 65% Donut Hole discount on the total cost of their brand-name drugs purchased while in the donut hole. The discount includes, 50% discount paid by the brand-name drug manufacturer and will apply to getting you out of the donut hole (or True Out Of Pocket Costs -TrOOP), however the additional 15% paid by your Medicare Part D plan will not count toward your TrOOP.
  • For example: If you reach the donut hole and purchase a brand-name medication with a retail cost of $100, you will pay $35 for the medication, and receive $85 credit toward meeting your 2018 total out-of-pocket spending limit.
  • Medicare Part D beneficiaries who reach the Donut Hole will also pay a maximum of 44% co-pay on generic drugs purchased while in the coverage gap (a 56% discount).
  • For example: If you reach the 2018 Donut Hole, and your generic medication has a retail cost of $100, you will pay $44. The $44 that you spend will count toward your TrOOP or Donut Hole exit point.

The following count towards the coverage gap

  • Your yearly deductible, coinsurance, and copayments
  • The discount you get on brand-name drugs in the coverage gap
  • What you pay in the coverage gap

The following Do Not count towards the coverage gap

  • The drug plan premium
  • Pharmacy dispensing fee
  • What you pay for drugs that aren’t covered

Conclusion

Things will get much simpler in 2020 when the donut hole closes. Until then, following these tips may help you avoid the donut hole or help you get out of it more quickly.

  • Stick with your plan’s formulary whenever possible. Only medications on the formulary, or for which you get an approved exception from the plan, count toward your spending limit.
  • Make sure to get your drugs from a network pharmacy. Prescriptions you fill outside your network pharmacy don’t apply to your spending limit.
  • Opt for generics if your doctor thinks they’re appropriate. The lower costs for generics may be enough to keep you from slipping into the donut hole.
  • There are also State Pharmaceutical Assistance Programs available, depending on where you live. These programs may help with Medicare Part D costs, and you may be eligible even if you don’t qualify for Extra Help. Visit Medicare.gov to find out if your state has a program.

Do you still have questions about the coverage gap (“donut hole”)?

If you still have questions about how the coverage gap works the team at Med-Care Senior Insurance Solutions is always available to help. We can help you compare formularies, choose the right plan or evaluate your current plan to make sure it works with your budget. Whether you’re enrolling in Medicare Part D for the first time or want to reevaluate your current prescription coverage, we can help guide you through the maze of Medicare Part D prescription drug coverage and the coverage gap.