This post Are You Ready for Open Enrollment? appeared first on Daily Reckoning.
Dear Rich Lifer,
Every year at this time, millions of Americans age 65 and older have to make a choice:
Do I sign up for a new Medicare Advantage plan, shop around for another provider, or return to Original Medicare (Part A and Part B)?
Medicare Open Enrollment Period for 2020 coverage runs from October 15 – December 7. This year the government also added a second open enrollment period for Medicare Advantage plan owners.
Between January 1 and March 31, you can leave your Medicare Advantage plan and return to Original Medicare, or you have the option to switch to a different Medicare Advantage plan altogether during this time.
But like all insurance policies, Medicare has its fair share of restrictions, so knowing what costs are covered and which ones are not is critical when choosing a new plan..
That’s why today I’m giving you a cheat sheet on what Original Medicare does NOT cover so there are no surprises in the new year. Here’s what you need to know:
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Eye Exams and Glasses
Unless you have diabetes or cataracts, Original Medicare does not cover routine eye care, including exams, eyeglasses or contact lenses.
Some Medicare Advantage plans offer vision coverage, but it can be pricey. A cheaper option is buying stand-alone vision insurance.
If you don’t need glasses or your vision seems to be stable, paying out of pocket for an annual eye exam might cost less than premiums. Whatever you do, don’t skip going to the eye doctor to save a few bucks. A lot of serious eye conditions can be treated with early detection.
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Dental Checkups and Dentures
The American College of Prosthodontists reports that 30 percent of seniors over 65 have no natural teeth. This is due to a number of causes, like gum disease and trauma.
You would think such a large population of people should receive some dental coverage from our government — but they don’t. A soap box for another day perhaps.
Medicare does not cover routine dental care like cleanings, fillings, root canals, tooth extractions, or dentures.
Other dental procedures like crowns, bridges, and plates are also excluded. So, at the end of the day you’re left paying a hefty out of pocket bill to maintain good dental hygiene.
So what are your options?
Some Medicare Advantage plans offer dental coverage, you can also buy private secondary insurance. But another good strategy is to use money from a tax-advantaged health savings account. The only catch is you can’t contribute to an HSA once you’re on Medicare, so plan ahead!
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Hearing Aids
According to the National Institute of Health, one-third of people between 65 and 74 years old and half the people over 75 years old have hearing loss.
Despite the high number of seniors with hearing loss, Medicare does not cover routine hearing exams. Medicare will only pay for a test if you specifically complain of symptoms to your doctor and they deem the tests necessary.
This is unfortunate because a lot of seniors gradually lose their hearing and won’t speak up about symptoms until it’s too late. Although basic Medicare won’t cover hearing aids, some Medicare Advantage plans will cover them. HSAs are also an option to fund hearing aids.
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Long-Term Care
Long-term care is typically one of the largest expenses in retirement. On average, the cost of a private nursing home is $97,000 a year, and assisted living will set you back $45,000 a year.
Basic Medicare does not cover long-term non-medical (custodial) care. However, you may be covered under Medicaid.
But if your income is too high, you’ll end up paying for long-term care out of pocket until your income reaches Medicaid eligibility. This is called a spend-down.
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Prescription Drugs
Another thing original Medicare (Parts A and B) does not really cover is prescription drugs. Only part B covers some prescription medicines. If you need prescription drug coverage, you’ll need to enroll in either a Medicare Part D drug plan or a Medicare Advantage plan.
Either way, you’re going to be paying premiums. Medicare Part D has annual premiums averaging around $34 a month. But overall costs vary depending on your provider and individual needs.
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Foreign Travel
There’s no better time to see the world then when you’re retired. (If you haven’t already, check out this post about how you can fly free, or how you can get a 2 week trip to Europe covered by Volvo) But the last thing you want to run into while you’re abroad is a medical emergency. Unfortunately, original Medicare does not cover health care outside the United States unless very specific criteria are met.
Medicare will pay for emergency services when you travel to/from Alaska through Canada, when you are on a cruise ship within six hours of a United States port, or when the nearest hospital is over the border to the United States.
Other than that, you’re stuck footing the bill if anything were to happen outside the US. Some Medicare Advantage plans offer decent coverage. But your best bet would be to find a Medicare Supplement Insurance (aka Medigap plan) that offers foreign travel benefits.
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Acupuncture
Original Medicare does not cover acupuncture period. It views it as an alternative medicine that’s not medically necessary.
The good news is you can find some private Medicare Advantage plans that will pay for acupuncture and other alternative therapies. It’s also worth talking to your acupuncturist to see if they’re willing to give you a lower rate or offer payment plans for seniors on fixed incomes.
Choose Carefully
Choosing a new Medicare plans can be overwhelming, but at least you have options. My advice would be to take your time and research different plans carefully so you know exactly what you’re getting and how much it’s going to cost you.
To a richer life,
Nilus Mattive
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