5 Pretty Critical Things Original Medicare Doesn’t Cover (And What to Do About It)

If you’re 65 or older, you’re eligible to enroll in Medicare—but this can be a complex process for new retirees. Many make assumptions about what type of care Medicare covers, and it’s often less than they think. 

Here are some typical costs you’re likely to come across in retirement that Original Medicare doesn’t cover.

What Is Original Medicare?

Medicare comes in many parts, but “original” Medicare refers to Parts A and B. 

Part A: This portion generally covers inpatient hospital, some at-home, hospice, nursing home, and skilled nursing facility care. Most Medicare users don’t have to pay a premium for Part A coverage. However, if you or your spouse didn’t pay Medicare taxes while working, you may be able to buy Part A coverage.

Part B: This is the bulk of your medical insurance coverage and includes preventative care, doctor visits, ambulance services, and medical equipment (like hospital beds or walkers). You will have a premium for Part B coverage based on your income. 

If you earn above the income threshold, prepare to pay an additional amount known as the Income-Related Monthly Adjustment Amount (IRMAA). The IRS uses your tax return from two years before applying for Medicare to determine if you must pay IRMAA. 

What’s Not Covered By Original Medicare?

While Part A and B cover many basic and preventative expenses, there are some notable gaps in coverage to keep in mind before enrolling.

#1: Long-Term Care

While Part A might help with minimal home health care (after Medicare makes you jump through some hoops), it doesn’t cover long-term care costs. Even if you opt for a Medicare Advantage or supplemental plan, Medicare will not foot the bill for anything it deems to be “long-term care.”

The problem is it’s not uncommon to need long-term care in retirement. In fact, about 70 percent of people over 65 will need it at some point in their lives, and it can get quite costly. 

In Michigan, the annual cost of a home health aid is about $61,776. If you’re considering a private room in a nursing home facility, expect to shell out around $108,405 per year. And those numbers are only expected to rise as you age.

So what can you do to help cover the costs associated with long-term care?

Here are a few options to consider:

• Look into long-term care insurance. 
• Invest in a health savings account (HSA).
• Put additional savings towards future healthcare costs.
• Explore an annuity.

How you choose to cover the costs of long-term care may impact your other savings goals in retirement. Make sure to discuss these options with your financial advisor before making a decision, as everyone’s needs are different.

#2: Prescription Drug Coverage

Original Medicare actually doesn’t cover prescription drugs; you must enroll in Medicare Part D for that.

Even if you aren’t currently taking prescription meds, it’s often a good idea to enroll whenever you’re eligible to do so. Why? Because if you don’t sign up for it during your initial enrollment period, you incur a permanent penalty if you choose to sign up later.

This late enrollment penalty varies depending on how long you wait to obtain coverage. The penalty is calculated by multiplying one percent of the “national base beneficiary premium” by the number of months you didn’t obtain coverage. This total is then rounded to the nearest $0.10 and added to your monthly premium. 

#3: Dental Care

Original Medicare doesn’t cover dental care such as cleanings, X-rays, fillings, or other preventative work. Some Part C Medicare Advantage plans offer minimal dental coverage, but it’s typically not comprehensive. And unfortunately, most Medigap plans don’t cover it either.

If your Medicare plan doesn’t include dental, consider obtaining a separate dental policy.

#4: Vision Insurance

Original Medicare doesn’t include vision insurance. You’ll need to obtain separate coverage if you wear glasses or contacts. However, you may be eligible for vision care if you’ve had cataract surgery or if you have diabetes. 

Some Part C plans cover vision costs, so review your coverage carefully.

#5: Hearing Aids

Original Medicare won’t cover the cost of hearing aid fittings, follow-ups, or the hearing aid itself. This can be a frustrating gap in coverage for retirees. These devices become critical as many people age, and they tend to cost a pretty penny. Expect to pay between $2,000 and $7,000 for a set of two.

Again, some Part C plans offer partial coverage for obtaining hearing aids. Make sure to check your plan before paying out-of-pocket.

Be Sure You’re Saving For All Medical Expenses

Even with Medicare coverage, there are some expenses you’ll need to prepare to pay out of pocket. If eligible, consider leveraging your HSA (a tax-advantaged tool for covering medical costs in retirement). Or, consider earmarking some investments for health-related expenses in the future. 

Whenever you become eligible for Medicare, you’ll have lots of information to sort through and decisions to make. Don’t hesitate to reach out if you need assistance understanding your options or determining what will best suit your budget in retirement.

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