What Medicare Doesn’t Cover: A Look at Some of the Most Common Out-of-Pocket Expenses

When you turn 65 and enroll in Medicare, you might find that you need to adjust to Medicare after having private insurance. But you’ll most likely be pleased with the switch! With that being said, though, there are things that Medicare doesn’t cover, meaning you’ll have some out-of-pocket expenses to budget for, as you would with a private health insurance plan. Some of these expenses change every year; it’s important to be up-to-date so you can plan for them, as well as know what type of Medicare Supplement Plan will help keep your out-of-pocket expenses to a minimum.

Medicare Out of Pocket Costs

hundred dollar bills floating around
You will have some Medicare out-of-pocket expenses, which is important to know so you can prepare and budget for them.

Medicare Part A Costs

Medicare Part A is hospital insurance, which covers most inpatient hospital services. Most people don’t pay a Part A premium, because this is covered by the Medicare taxes you have paid while working. But if you don’t qualify for free Medicare Part A premiums, you will have to pay up to $499 each month for hospital insurance.

For Medicare Part A, your biggest out-of-pocket expense is your annual deductible, which you will have to meet if you are admitted to the hospital. For 2022, the Part A annual deductible is $1,556, and covers your share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. If you go over 60 days, you’ll have to pay a coinsurance of $389 per day for the 61st through 90th day of hospitalization in a benefit period, and $778 per day for lifetime reserve days. If you need a skilled nursing facility, your daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $194.50 in 2022.

Medicare Part B Costs

Medicare Part B covers outpatient medical services, including durable medical equipment. There are a few more out-of-pocket expenses for Part B than there are for Part A: you will have to pay a monthly premium, coinsurance, and meet your annual deductible. Each year, these costs change slightly. For 2022, the standard monthly premium for Medicare Part B enrollees is $170.10, the annual deductible is $233, and coinsurance will remain at 20% of the Medicare billable amount of services.

What Medicare Typically Doesn’t Cover

In addition to the out-of-pocket expenses associated with Medicare Parts A and B, there are other things that Original Medicare does not cover, including: dentist with a light on his head.

  • Most dental care, including dentures and dental implants
  • Most vision care, including eye exams for glasses and contacts
  • Most hearing care, including hearing aids, exams, and fittings for hearing aids
  • Long-term or custodial care
  • Most cosmetic surgery
  • Massage therapy and acupuncture
  • Routine foot care
  • Personal comfort items and services
  • Medical expenses outside the U.S.
  • Prescription medications

Medicare also will not pay for services and supplies that your doctors consider medically unnecessary.

Extra Coverage

As we pointed out above, Medicare Part B will only cover the cost of services or treatment at 80%, leaving you to pay the other 20% out-of-pocket. If you need to have major surgery, like a heart transplant, this can be quite expensive, especially if you are living on a fixed income, as many Medicare beneficiaries are. Fortunately, though, you can save money on all your medical expenses and get extra coverage by purchasing a Medicare Supplement Plan. 

There are 10 different Medicare Supplement Plans to choose from, each offering different coverage options and rates. It’s worth looking into a Medicare Supplement Plan to save as much money as you can, so speak to an EZ agent for all of your options. EZ’s agents work with the top-rated insurance companies in the nation and can compare plans for you in minutes at no cost to you. To get free instant quotes for plans that cover your current doctors, simply enter your zip code in the bar on the side, or to speak to a licensed agent, call 888-753-7207.

The Top 6 Things Medicare Beneficiaries Pay For Out-Of-Pocket & How You Can Save More Next Year

Did you know that out-of-pocket costs top the list of considerations when picking a Medicare plan? In fact, based on a report by eHealth, around 29% of Medicare beneficiaries say finding a plan with affordable out-of-pocket costs is the most important thing to them, while 27% say affordable premiums are most important, and 26% cite coverage for their preferred doctors and hospitals. So, if you’re like most Medicare beneficiaries, and are living on a fixed income, you’re looking to save as much money as possible. Before the Medicare AEP is over (December 7), make sure to review the following top 6 out-of-pocket costs you can expect next year, so you can choose the plan that will save you the most money. 

1. Premiums

You will have a monthly Medicare premium to pay:

illustration of an invoice being handed to another hand tats holding money

  • Part B premiums for 2022 have not been released yet, but for 2021, they were $148.50/month, and you can expect next year to be slightly more. 
  • There generally is no monthly premium for Part A if you worked 40 quarters or 10 years. If you worked less than that, you can expect to pay a monthly premium ($471 per month for 2021).

2. Deductibles & Coinsurance

Deductibles are the amount  you will pay out-of-pocket before your coverage begins and Medicare starts paying for your medical services. For each benefit period, you will need to meet a Part A deductible (for 2021 it was $1,484); you will also need to meet a Medicare Part B deductible each year, which was $203 in 2021. 

You will also be responsible for Medicare coinsurance:

  • Part A: After 60 days in a hospital, Medicare charges a coinsurance per day for days 61-90. After 20 days in a skilled nursing facility, you will have to pay coinsurance each day for days 21-100. After 100 days, you pay all costs out-of-pocket.
  • Part B will only cover 80% of your medical expenses, after you meet your deductible. This leaves you to account for the other 20% out-of-pocket. 

3. Prescription Coverage

illustration of a white prescription bottle with a blue cross in the middle and blue circle around it
Prescriptions can cost a lot of money if you have chronic conditions, but you can save if you compare plans.

If you have a Part D plan, your monthly premiums will be based on which plan you purchased, and your prescription drug coverage costs will depend on which formulary your medication is in. Different prescription drug plans will place medications on different tiers, so your drugs might cost more or less depending on which plan you choose. 

4. Late-enrollment Penalties

You are supposed to enroll in Medicare when you turn 65, and if you miss the deadline to enroll,  you will face a late enrollment penalty. You can expect to pay:

  • Part A: You will pay 10% of your monthly premium for twice the number of years you were eligible but did not enroll in Medicare.
  • Part B: You will pay 10% of your monthly premium multiplied by the number of years you went without Medicare after you were initially eligible.

5. Non-covered Services

You need to budget for common medical needs that Medicare does not cover, such as routine eye care, dental care, and hearing aids. 

6. Medicare Supplement Plan

Many Medicare beneficiaries  purchase a Medicare Supplement Plan because it covers the Part B coinsurance (the 20% of medical expenses you owe out-of-pocket), amongst other services. These plans are relatively affordable, saving you money on your out-of-pockets expenses for a low monthly premium. There are 10 different plans to choose from, so you can pick the one that meets your specific medical needs and budget. 

The Medicare Annual Enrollment Period is a very important time when you can look for a plan that better suits your needs, and save some money. The AEP is coming to an end, so now is the time to think about your budget, review the out-of-pocket costs mentioned, and find ways you can cut down on costs, such as by purchasing a Medicare Supplement Plan. If you need help comparing plans, EZ can help – we will provide you with an agent who will compare plans in your area for free. No obligation. To get free instant quotes for plans that cover your current doctors, simply enter your zip code in the bar on the side, or to speak to a local licensed agent, call 888-753-7207.