Most people don’t really have a good understanding of the Medicare Program. It’s important to know what Medicare does not cover as well as what it covers. Here are some important misunderstandings that you may have:
Medicare is free and covers everything. Not true! Beneficiaries pay premiums, copayments and deductibles. Medicare limits the number of days it will pay for inpatient hospital and skilled nursing care. Medicare Part B’s premium (covering physicians and other outpatient services) varies based on your modified adjusted gross income as reported on your IRS tax return from 2 years ago.
If your joint income was $85,000 two years ago your premium is $135.50 per month. If you had a very successful year and reported more than $320,000 that year your monthly premium is $433.40! The highest premium is $460.50 per month for joint incomes over $750,000.
Medicare covers you all over the world. Not true! Medicare coverage stops at the U.S. border. It does not cover medical services outside the U.S. and it’s territories except in very rare circumstances. Medicare considers the United States to include the District of Columbia, Puerto Rico, the Northern Mariana Islands, Guam, American Samoa, and the U.S. Virgin Islands.
If you have supplemental Medicare or Medigap insurance your plan may cover foreign travel. It’s important to check your supplemental coverage to see if it covers travel outside the U.S. and the extent of this coverage. If you do not have supplemental coverage or your plan does not cover travel outside the U.S. you should consider purchasing travel insurance for your trip. Typical plans include $1,000,000 of medical evacuation coverage per person and $100,000 of medical coverage per person. Check with travelinsurance.com for plans and rates.
Medicare will cover long term care. Not true! The Medicare nursing home benefit covers short term (100 days or less) stays in a skilled nursing facility for people who need skilled nursing or rehabilitation services on a daily basis. In addition, Medicare covers home health care only when a person is homebound and needs skilled nursing or rehabilitation services on a part-time or intermittent basis.
Medicare does not cover custodial (nonskilled) care that provides services and support for the activities of daily living (eating, bathing, dressing, transference, toileting, and grooming). There is an exception for hospice (end of life) care which is covered under Part A of Medicare.
Custodial care is usually provided by family members, home health care agencies and assisted living or nursing home residences. Such costs can be as high as $8000-10,000 per month in some parts of the country. Healthy individuals should consider purchasing long term care insurance to protect against these costs.