Is Original Medicare Enough Coverage?

Often, as our clients prepare to enter Medicare, they discover that Original Medicare alone isn’t enough coverage to meet their needs. While Medicare covers a broad range of services, there are some significant gaps. If you don’t have another form of health insurance, you could put yourself at risk for hefty medical bills.

What Does Original Medicare Cover?

Original Medicare covers your inpatient and outpatient medical services, which are categorized under Medicare Part A and Medicare Part B. These parts have different costs and deductibles associated with them, but in general, you’ll be responsible for 20% coinsurance. There’s no maximum out-of-pocket limit, and that 20% can add up quickly. In addition, if you seek treatment from a doctor that doesn’t accept Medicare assignment, you may also be responsible for up to an extra 15% the cost of the total treatment in the form of an excess charge.

Medicare Part A

Medicare Part A, your inpatient hospital insurance, covers inpatient stays and associated services. Some common examples include hospices, inpatient surgery, skilled nursing facilities, and post-acute care.

In addition to the 20% coinsurance you’re responsible for, Medicare Part A has a $1,408 deductible in 2020. This deductible applies to each benefit period, which starts after you haven’t received inpatient care in a hospital or skilled nursing facility for more than 60 days in a row. This means that you could potentially pay the deductible multiple times in a year.

If you wind up in the hospital and need post-acute care for an injury or illness, you could be looking at the following costs for your inpatient care alone:

  • Days 0-60: The Medicare Part A deductible $1,408
  • Days 61-90: $352 coinsurance per day
  • Day 91– until the end of your lifetime reserve days: $682 coinsurance per day

Keep in mind that these numbers may not reflect the costs of other services you receive, such as surgery.

Medicare Part B

Medicare Part B pays for many preventative and medically necessary outpatient services. Typical examples include doctor visits, some immunizations, lab tests, durable medical equipment, emergency rooms, and ambulances.

Medicare Part B has an annual deductible of $198 in 2020, in addition to the 20% coinsurance you may pay, as well as any applicable copays and excess charges.

Can Supplemental Insurance Cover These Costs?

For many people, a Medicare Supplement plan provides a safety net to the Medicare out-of-pocket costs. Medicare Supplement plans help to cover the coinsurance, deductibles, excess charges, and copays that you’d otherwise be responsible for with Original Medicare alone. Plans are categorized by letter and vary in coverage, so that you can pick the one that you feel fits your needs best. For instance, compare two of the most popular plans, Medicare Supplement Plan F vs. Medicare Supplement Plan G. Plan F covers all of the Medicare-approved out-of-pocket costs, while Plan G covers all but the $198 Part B deductible.

Are There Any Other Gaps in Medicare?

Yes, there are other gaps in Medicare that you should be aware of. While Medicare does cover a broad range of services, there are some important expenses that it doesn’t protect you from.

Prescriptions

Typically, Original Medicare only covers drugs in very specific circumstances:

  • Medicare Part A should include any prescriptions received inside an inpatient facility.
  • Medicare Part B may cover some prescription drugs that a medical professional administers directly inside an outpatient facility. Generally, these are the kinds of drugs that patients would not administer to themselves.

Most people will need to enroll in a Medicare Part D prescription plan to get typical prescriptions covered. Anybody with Medicare Part A and Part B is eligible to enroll in a Part D plan. Each plan has its own list of covered prescriptions, called a formulary, so the plan that’s best for you will depend on the medications that you’re taking. Insurers can change their formularies each year, so it’s always a good idea to shop your drug plan during the Annual Enrollment Period.

Dental, Vision, and Hearing Services

Original Medicare rarely covers dental, vision, or hearing services. You’ll most likely need to pay out-of-pocket for routine services such as exams, hearing aids, glasses, dentures, dental cleanings, and other dental work.  Good dental, vision, and hearing health is important to our overall health, so it’s wise to consider additional insurance.

Do I Really Need Supplemental Insurance with Medicare?

Ultimately, it’s up to you to decide what level of risk you’re comfortable with. However, even if you’ve enjoyed good health so far, you can’t predict the future. Purchasing additional insurance can prevent one unexpected illness from derailing your retirement, and allow you to seek high-quality, prompt medical care, without worrying about your budget.

Nothing on this website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.

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