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Will you or someone you care about be turning 65? Medicare provides a broad range of medical coverage. However, it’s essential to recognize that Medicare doesn’t cover everything. Understanding these gaps is crucial for beneficiaries to ensure they are adequately prepared and protected from unexpected healthcare costs. At Wealth By Design, we know and understand that creating a sustainable cash flow is what will provide you with the peace of mind to live your potential.
#1 Long-Term Care
One of the most significant exclusions in Medicare coverage is long-term care, also known as custodial care. This includes services that assist individuals with daily living activities such as bathing, dressing, and eating, typically provided in nursing homes or through in-home care services. Medicare covers short-term skilled nursing care or rehabilitation services but not extended stays for chronic conditions.
According to a 2022 report by the U.S. Department of Health and Human Services (HHS), along with other studies, suggests that nearly half of individuals aged 70 and older will require long-term care at some point. This care can range from in-home assistance with daily activities to full-time care in nursing homes or assisted living facilities. In 2022, the average cost of a nursing home is $10,000 a month; while assisted living averages about $5,000 a month.
#2 Routine Dental, Vision, and Hearing Care
Medicare does not cover most routine dental care, including cleanings, fillings, and dentures. Similarly, routine vision care, such as eye exams for glasses or contacts, and hearing aids are not covered. Given that dental, vision, and hearing health can significantly impact overall quality of life, this exclusion leaves many beneficiaries vulnerable to high out-of-pocket costs. Isolation and loneliness are more pronounced in people who have difficulty hearing or seeing.
#3 Alternative Healthcare
Services like acupuncture, chiropractic care, naturopathy, and other forms of alternative or complementary medicine are typically not covered by Medicare. As alternative care increases in popularity and efficacy, payment options remain in the hands of individuals. Incorporating the out-of-pocket expenses for alternative care needs to be part of your cash flow planning in retirement.
#4 Routine Foot Care
Medicare excludes coverage for most routine foot care, such as corn and callus removal or toenail trimming, unless they are deemed medically necessary due to certain conditions like diabetes.
#5 Prescription Drugs
While Medicare Part D provides prescription drug coverage, it does not cover all medications. Some drugs, particularly those for weight loss, E.D., or cosmetic purposes, may not be included in Part D plans. Additionally, each Part D plan has a formulary, or list of covered drugs, which can vary, leading to potential coverage gaps.
#6 Overseas Healthcare
Medicare coverage is generally limited to the United States and its territories. If beneficiaries need healthcare services while traveling abroad, they typically need to rely on other forms of insurance or pay out-of-pocket, except in very limited circumstances.
#7 Cosmetic Surgery
Medicare generally does not cover cosmetic surgery unless it is deemed medically necessary due to an illness, injury, or congenital defect. Procedures purely for aesthetic purposes are excluded from coverage.
Understanding these coverage gaps is crucial for several reasons:
As you identify these gaps early, individuals and families can plan. They can explore supplemental insurance options, such as Medigap policies or Medicare Advantage plans, which might offer additional coverage. You can look at tactics such as building up a Health Savings Account prior to claiming Medicare to create a tax-free income to pay for health expenses.
You can look at your long-range cash flow needs and incorporate these costs into managing the sustainability of your personal plan.
Especially looking forward to the cost of Long-term care, you can position and protect your assets when time is on your side. You can hedge your longevity risk with Long-term care insurance and discussing Medicaid planning with an Elder Care Attorney.
While Medicare provides valuable health insurance coverage for millions of older Americans, it is not all-encompassing, and it is not free. Significant gaps, particularly in areas like long-term care, necessitate careful planning. By recognizing these exclusions and proactively preparing, beneficiaries can protect themselves from unexpected expenses, maintain comprehensive healthcare, and ensure financial stability. Give us a call and we will address these gaps as an essential part of managing your health and financial well-being.
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