What does Medicare cover, and what doesn't it?

Answers to what Medicare does and does not cover

When current and future retirees begin planning for their healthcare options, a commonly asked question is “What does Medicare cover?"

Let's look at some of those questions to help you gain a better understanding of Medicare coverage.

Does Medicare cover prescriptions?

Prescription drug coverage is available via Medicare Part D. Medicare participants must obtain prescription drug coverage as soon as they are eligible for Medicare, unless they have creditable prescription coverage elsewhere (such as a spouse's employer-sponsored health coverage). Otherwise you may be subject to a late penalty if you enroll later.1

Drug coverage can be obtained via private insurance companies, and the premiums will vary. Prescription drug coverage is also available via most Medicare Advantage plans. These plans can be health maintenance organization (HMO) or preferred provider organization (PPO) and may cover additional costs besides prescription drug costs.

Does Medicare cover nursing homes, assisted living, and long-term care facilities?

Medicare generally doesn’t cover the cost of a nursing home, assisted living, or long-term care facility. 2 Medicare Part A does cover care provided in a skilled nursing facility with certain conditions and time limitations. Medicaid, which is administered by states under federal guidelines, may cover nursing home care. You may need to spend personal resources on medical care before you are eligible. 3

Does Medicare cover hearing?

Medicare Part B covers diagnostic hearing and balance exams if ordered to determine if medical treatment is needed. However, Medicare does not cover hearing exams, hearing aids or fittings. 4

Does Medicare cover hospice?

Medicare does cover hospice care if certain conditions are met:

  • Your doctor certifies that you are terminally ill, meaning that your life expectancy is six months or less.
  • You consent to receiving palliative care to make you comfortable versus care to try to cure your illness.
  • You sign a consent form to receive hospice care instead of other Medicare covered treatments for your terminal condition. 5

Does Medicare cover home health?

Medicare does cover some in-home health services including:

  • Skilled nursing care
  • Physical therapy
  • Speech pathology
  • Occupational therapy

Medicare will not pay for 24-hour in-home care or meals delivered to you at home among others. 6

You are not eligible for coverage if your in-home care needs exceed what can be classified as part-time or intermittent skilled nursing care. You must be under the care of a doctor and be treated under a plan of care that is monitored and reviewed by your doctor. Additionally, your doctor will need to certify that you need certain eligible in-home services.

Does Medicare cover medical devices?

Medicare Part B covers durable medical equipment which is defined as being able to withstand repeated use, be used for a medical reason, not useful to someone who is not sick or injured, be used in your home and have a useful life of at least three years.7

There is a long list of items included, a few of which are crutches, a hospital bed and a walker.

Does Medicare cover elective procedures?

Services that are not deemed as being medically necessary are generally not covered by Medicare parts A or B. Some of these services and procedures might be covered by a Medicare Advantage plan if you have one, be sure to check with your plan.

Summary

It is wise to understand what Original Medicare covers and what is not covered. In some cases, plans such as a Medicare Advantage plan might cover some of the procedures not covered by Medicare Parts A and B.

Understanding what types of common medical and related costs are not covered will be helpful when planning for your out-of-pocket medical costs in retirement.

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