15 Little-Known Facts You May Not Know About Medicare (But Should!)
When it comes to Medicare, there’s so much information to take in. From the parts of Medicare to when you’re supposed to sign up, it can quickly become overwhelming. (If you need to start at square one, check out our complete beginner's guide: If You Don’t Understand Medicare At All, Start Here.)
However, there are certain little-known facts about Medicare that don’t get talked about that often. Let’s get right into it.
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1. Most Medicare-related terms have multiple names
We’re not sure why, but when it comes to Medicare, most things tend to have multiple names.
For example, Medicare Supplement Insurance is also known as Medigap Insurance. Original Medicare is the same thing as Medicare Parts A and B. Medicare Advantage is the same thing as Medicare Part C.
We know. It’s so unnecessary.
2. If you make more money, it costs you more
While most people will pay the standard premium amount, some individuals will have a higher premium for Medicare Part B based on their income.
Check out the most recent chart from Medicare.gov:
3. Medicare only covers 80% of eligible medical expenses
You’ve paid into Medicare all your life, but unfortunately, it still doesn’t cover 100% of your medical bills. You’re on the hook for 20% coinsurance, which can become quite costly if you ever have a medical emergency.
For example, the cost of a heart attack can range from $750,000 to $1 million. If your heart attack ended up costing $750,000, the 20% coinsurance on that dollar amount is $150,000.
You can see where this is going. We recommend looking at Medicare Supplements to pick up that 20% coinsurance.
4. Medicare doesn’t cover LTC costs – and it’s way more expensive than you might think
The most costly expense of all, especially for seniors over age 65, is long-term care. Whether it be in a nursing home, an assisted living facility, or even at home, the cost of extended care is huge. A private room in a nursing home averages out to about $8,000 per month.
About 70% of seniors over age 65 will need some form of long-term care in their lifetime. Medicare only covers 20 days of this care, and the next 80 days are only partially covered. After that, you’re on your own.
We recommend taking a look at the insurance options, such as a long-term care policy, a short-term care policy, or life insurance with a long-term care rider.
5. Medicare doesn’t cover dental, vision, or hearing
Medicare doesn't cover most dental care, dental procedures, or supplies, like cleanings, fillings, tooth extractions, dentures, dental plates, or other dental devices. Medicare Part A (Hospital Insurance) will pay for certain dental services that you get when you're in a hospital. Part A can pay for if you need to have emergency or complicated dental procedures, even though the dental care isn't covered.
Medicare will pay for diagnostic hearing and balance exams only if your health care provider orders it to see if you need medical treatment. Unfortunately, Medicare does not cover hearing aids, hearing exams, or exams for fitting hearing aids. You pay 100% for hearing exams and hearing aids.
Medicare also doesn't cover routine eye exams or eyeglasses or contact lenses.
There are specific insurance plans that help fill in this coverage gap called Dental, Vision, and Hearing (DVH) plans.
6. Medicare covers some weight loss programs
While Medicare won’t cover weight loss services and programs for everyone, you might qualify under certain conditions.
For example, if weight loss is a necessary part of treatment for diseases like diabetes, hypothyroidism, and cardiovascular disease (among many others), Medicare will help pay for the program.
Medicare will also help pay if the doctor tells you to lose weight before a surgery in order to reduce complications.
The type of services and programs that Medicare helps pay for are:
- Initial assessment of your eating and activity habits
- Health counseling
- Dieting and exercise education
- Follow-up visits to monitor your diet and weight loss progress
- Up to three hours of individual counseling services the first year, and two hours each year after that
7. All Medicare Supplement plans are the same coverage – they just cost different amounts
In the world of Medicare Supplements, every insurance carrier has to follow government regulations, which means they all have the same benefits.
For example, a Plan G with Blue Cross Blue Shield has the same benefits as a Plan G with Cigna. Just as a Plan N with Aetna has the same benefits as a Plan N with CSI.
Since every carrier sells the exact same thing, the only differentiator is the price. Because of that, you have the ability to shop around for the cheapest plan.
Now, you do need an agent who can run quote comparisons for you, but he or she will present you with the cheapest plan available to you.
8. If you wait to choose a Part D drug plan, you’ll be penalized – forever
While you aren’t required to have a drug plan, you are penalized for each and every month that you go without it.
For each month that you don’t have prescription drug coverage, you’re penalized 1% of the national base beneficiary premium. The final sum is then added on to your monthly Part D premium, meaning that the more months you’ve gone without coverage, the more expensive your drug plan will eventually be.
9. Medicare doesn’t pay for anything while you’re traveling abroad
Original Medicare does not cover you while you’re traveling outside of the U.S. However, you do have options for foreign travel coverage. Medicare Supplements will pick up most of the costs associated with medical emergencies.
10. You can choose an alternative to Medicare called Medicare Advantage
Medicare Advantage, offered by private insurance companies and approved by Medicare, provides health insurance coverage after you turn 65.
This is the health insurance alternative to Original Medicare (Medicare Parts A and B). It works just like the health insurance you’ve probably had all your life. You have a deductible, copays, coinsurance, and an out of pocket limit.
Some of the biggest perks of Medicare Advantage is that some plans don’t have a monthly premium, and there are often benefits like dental and vision coverage as well as free gym memberships.
Medicare Advantage is usually a great fit for veterans and individuals who are dual eligible (eligible for both Medicare and Medicaid). Medicare Advantage can also be a good option for everyday consumers who prefer to have a higher deductible in exchange for lower premiums.
Individuals who rarely see the doctor and don’t see that changing, are challenged financially, and/or would rather have low premiums in exchange for some risk are great candidates for a Medicare Advantage plan. In general, we find that a Medicare Supplement is a better fit for most clients, but there are certainly exceptions.
11. Medicare is running out of money
The total costs for Medicare in 2017 were $710.2 billion. The problem? The total income was only $705.1 billion. That means that Medicare is spending more than they’re making (about $5 billion more).
The Hospital Insurance trust fund is expected to run out of money by 2026, which is 3 years sooner than what was estimated last year.
There’s quite a bit of speculation about the future of Medicare, but there’s one thing we all know for certain: Medicare is running out of money.
12. Medicare scams happen way more than you’d think
The National Council on Aging says that senior scams have been called the “crime of the 21st century.”
The FBI suspects that seniors are a target for the following reasons:
- Seniors are the most likely to have extra money (a home, retirement savings).
- Individuals who grew up in the 1930s-50s are generally known to be polite and trusting. Scammers exploit these traits.
- Seniors are less likely to report fraud because they don’t know who to call, they’re embarrassed, or they flat out don’t know they’ve been scammed.
- Older adults often suffer from memory loss, meaning they’re less likely to be a reliable witness. Scammers exploit this.
Unfortunately, scammers like to use Medicare to trick seniors into giving out their personal information.
Medicare.gov explains, “There are con artists who may try to get your Medicare Number or personal information so they can steal your identity and commit Medicare fraud. Guard your Medicare card like it’s a credit card. Give your Medicare Number only to people you know should have it. Medicare, or someone representing Medicare, will never contact you for your Medicare Number or other personal information unless you’ve given them permission in advance.”
13. It sounds like Medicare covers all cancer costs, but in reality, it doesn’t
Medicare does help cover cancer costs that are medically necessary. But here's the catch – the majority of cancer costs aren’t actually medical costs.
The sad truth is that only 38% of costs associated with cancer are medical. The other 62% of cancer-related costs are not covered by Medicare at all.
Here’s a look at what those costs could be:
- Travel expenses
- Loss of income
- Experimental medications
- Clothing and hair pieces (wigs)
Because of this, we’d advise you to consider a Critical Illness Insurance plan, which can give you a lump sum of money if you’re diagnosed with cancer.
14. Medicare offers a free annual wellness exam
Medicare pays for one free wellness exam each year. You don’t have to pay the coinsurance or deductible for this exam either.
During the exam, your doctor will create a full prevention plan. You can expect a health assessment, a medical and family history overview, a checklist for preventive screenings, and routine health checks like blood pressure and your weight.
If you’re brand new to Medicare, you actually get a free “Welcome to Medicare” visit, so you should take advantage of it!
This is a pain-free way to keep up with your health and see your doctor each year. Plus, it’s free!
15. You don’t have to sign up for Medicare at age 65
If you have health coverage, you don’t have to sign up for Medicare when you turn 65, and you’re exempt from penalties. That means that if you want to switch to Medicare after you’re 65, you don’t have to pay a penalty for waiting.
The most common example is an individual who waits to retire. He or she has group coverage through their employer, so they don’t need Medicare. As soon as they retire, they’re free to sign up for Medicare without paying any of the penalties.
What other little-known facts have you noticed about Medicare? Leave them in the comments below!
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