What are the gaps in Medicare coverage?
Medicare has never covered all medical expenses and never will. The gap between what doctors charge and what the government pays is big and getting bigger. In fact, Medicare was never designed to cover chronic conditions or prolonged medical treatments. It was directed toward Americans age 65 or older who need minor or short-term care — little more. This is why it is so important to understand where Medicare falls short. While we can’t list all the possible gaps, here are the ones that affect almost everyone:
Gap #1: Deductibles – You are responsible for deductibles under both Medicare Part A and Part B. Under Part A, for instance, you would be responsible for the $1,156 deductible for the first 60 days of a hospital stay. Plus, this $1,156 deductible applies each time you re-enter the hospital after a greater than 60-day span between admissions. Under Part B, Medicare will pick up 80% of approved medical expenses after you pay a $140 deductible.
Gap #2: Co-Payments – You are responsible for a share of the daily costs if your hospital stay lasts more than 60 days. For example, in 2012, you are responsible for paying a $289 daily “coinsurance” fee if you stay in the hospital longer than 60 days but less than 90 days. Worse yet, Medicare Part A pays nothing after 90 days — unless you take advantage of the 60 “lifetime reserve days”. The 60 reserve days can be used only once, and even then, you would still pay $578 daily for those 60 days.
Gap #3: Shortfalls – A national fee schedule determines what physicians on Medicare assignment can charge for their services; Medicare will generally pay 80% of that amount. However, not all physicians are on Medicare assignment. Those who are not on assignment may charge more than the approved amount, leaving you responsible for the shortfall.
Gap #4: Nonpayment – The Original Medicare program does not directly provide any coverage whatsoever for certain services and expenses such as prescription drugs, hearing aids, treatment in foreign countries, and much more.
The bottom line is that the federal Medicare program will cover no more than half to three quarters of your medical expenses. That’s why private Medicare supplement insurance, or Medigap, makes sense. Its goal is to cover a portion of what Medicare doesn’t. But in order for Medigap to make sense for you, you need to find the right policy, from the right company, for a reasonable price. If you are ready to get a personalized Medigap price comparison, click here.
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