That’s because Medicare, the federal insurance program for those 65 and older and those with disabilities, only covers certain forms of care. It’s often not as comprehensive as employer-provided health insurance plans you may have opted into earlier in life. Medicare is broken down into three service-focused parts:
- Medicare Part A: Helps cover costs for inpatient hospital stays, skilled nursing facilities, hospice care, and home health care
- Medicare Part B: Helps cover costs for preventive services, certain doctor visits, outpatient care, and medical supplies
- Medicare Part D: Helps cover costs for prescription drugs, shots, and vaccines
- Original Medicare: Original Medicare includes Part A and Part B. The patient pays a deductible at the start of the year then for services as they’re utilized. Most Medicare-approved services will have the patient pay 20% of the cost, which is called “coinsurance.” Part D is a separate plan and price. A Medigap policy can help supplement the patient costs.
- Medicare Advantage: Medicare Advantage, also known as Medicare Part C, is considered an “all in one” alternative to Original Medicare. These combo plans often include Part A, Part B, and Part D, and may include additional benefits above and beyond Original Medicare, such as coverage for vision, dental, and hearing.
So what does Medicare cover, exactly?
Medicare will pay for a portion of skilled nursing care for up to 100 days in a Medicare-certified facility if you meet certain criteria, such as a qualifying three-day inpatient hospital stay. Medicare will pay 100% for only the first 20 days; for days 21-100, you will be responsible for a daily copayment. Medicare generally does not cover long-term care in a nursing home or assisted living facility.
For home health care, Medicare may cover the cost of some medical care you receive in your home, such as physical or occupational therapy. However, Medicare does not cover all services, including meal delivery, general home tasks (such as cleaning and laundry), or custodial care services (say, help with bathing and getting dressed).
So what can you to do to plan ahead for health care costs that Medicare might not cover? Short-Term Care and Long-Term Care insurance are excellent options.
- Short-Term Care insurance: Typically offering coverage for 12 months or less, these policies are added on to Medicare to help pay for home health care, assisted living facility, and nursing home costs. When certain activities of daily living cannot be performed alone, you can often begin to utilize this insurance to cover care needs.
- Long-Term Care insurance: These policies can help you pay for longer-term medical care (more than 12 months) at nursing homes, adult daycare, and assisted living facilities, as well as necessary medical equipment and informal home care to assist with general custodial care services and chores around the home.
Understanding what Medicare covers is an important part of planning for your future. By adding supplemental insurance coverage to your Medicare plan, you’ll be prepared to cover the cost of care you may need down the road.
* The 2021 Short-Term Care Insurance Foundational Research Study was an online survey of 500 U.S. consumers age 50-79. All participants confirmed having primary or shared responsibility for their households’ health care coverage decisions. American Enterprise Group was not identified as the survey sponsor. The survey was conducted during the month of February 2021. The study was conducted in partnership with Directions Research, an independent insights firm in Cincinnati, Ohio.
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