Why is Medicare alone not enough?

Why is #Medicare alone not enough?

Just as people who were new to Social Security at its inception, many people blindly believe they have enough when they have Medicare as a stand-alone plan.  Truth is Medicare leaves large gaps that it doesn't cover.  These gaps can mean complete financial fall out for someone who as they get older who fall into poor health.  So let us review what Medicare covers, doesn't cover, and how much is your financial responsibility.

First, Medicare only covers what is medicare approved.  Surprised?  Well, you shouldn't be.  Secondly, Medicare only covers what is medically necessary.  So if you think you will be able to get those dental implants, FORGET ABOUT IT!.  Lastly, Medicare will only cover a small portion of skilled nursing.  After the first 20 days, and up to day 100, you have to pay a copay which changes each year.  Post day 100, you pay the ENTIRE AMOUNT. For coverage though, you have to have been in the hospital at a minimum of 3 days, and not out longer than 30.  Plus, in most states, you have to be showing signs of improvement.  I'll explain more below.

What Medicare doesn't cover, is numerous.  The first three pints of blood are not paid for by Medicare.  Neither are custodial and intermediate care.  Finally, it doesn't cover dental, vision, and hearing.

Medicare has four parts. Part A covers your hospital expenses, ie room, board, etc.  Part B covers doctors expenses, ie primary care physician, specialist, and covers inpatient/outpatient visits or surgeries, lab work, durable medical equipment, etc.  Part C whether it is a Medigap plan or you have a Medicare Advantage plan, picks up some to all of what A and B don't cover.  Part D is generally a stand-alone prescription drug plan required if you have a Medigap plan and under certain other situations.

Where do the costs come in?  Under Part A, during every benefit period or a period of 60 days, you pay a deductible.  If you are the type that has to be admitted every 61 days during the year, you could have to pay this deductible up to 6 times.  If you need care beyond this first 60 days, you will have to pay a copay of one amount up to day 90 and then twice that for days 91 to 150.  Also, once you have used up what is known as your lifetime reserves, those days between days 91 to 150, you lose those.  Further charges then become your responsibility.

Under Part B, you have a deductible but you only pay this once per calendar year.  You also are responsible for 20% of any approved Medicare charges.

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Finally, if you go to a doctor who doesn't accept Medicare assignment, you will have to pay up to 15% more for extra charges called excess charges they are allowed by Medicare to charge.

Many doctors or ceasing to accept Medicare, which means you are responsible for more and more of the bill.  If you are kept for observation and not admitted, you pay.  Having been discharged, should you need assistance with your activities of daily living, ie walking, feeding, incontinence, etc, you pay.  If you need a skilled professional for further assistance, you pay.  If you need to be admitted to a skilled nursing facility, being released before the qualifiers above, 3 days, you may have to pay for skilled nursing yourself.  At a rate of $150 or more per day, your liability could drain your retirement savings.  Wouldn't it make sense to have a plan in place so you don't ruin your retirement?

Two scenarios might help clarify this lengthy dissertation.  First, you get food poisoning from a local restaurant.  If you only have Medicare you pay the Part A deductible, the Part B deductible, 20% of the doctors' bill, and excess charges if the doctor doesn't accept Medicare assignment.  In the second scenario, you have a hip replacement.  You pay for Part A, and Part B deductible.  Since this takes time to heal, after 3 days you are admitted to a skilled nursing facility.  Due to complications with walking, you have to stay for more than 20 days.  You have to pay for each day you are in there.  Let's say you only stay 10 days but you need intermediate care.  You pay all of this.

While the figures were deliberately left out because they can change yearly, this should give you some idea of the cost to you.  Wouldn't it make sense to invest in your future and protect your life's savings against such unexpected medical emergencies?  For further information, contact me.