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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 and co-payments.

As you probably know, Medicare has two parts:

Part A acts as hospital insurance and
Part B acts as medical insurance.

Typically, you are responsible for 20% of the expenses under both parts. Here are just a few examples ...

In the hospital: After the first 60 days, you’ll have to pay $408 per day. After 91 days, you’ll pay $816 per day, and beyond 150 days, it will probably cost you even more. Even in the first 60 days, you’re responsible for the first $1,632 in bills.
In a nursing facility: After you’ve left the hospital, approved care in a skilled nursing facility will cost you $204 per day after 80 days and even more after 100 days.
Skilled home health care: Fortunately, this is usually covered, provided it’s part-time or intermittent. But for durable medical equipment, you have to pay 20% of the cost.
Ambulance: You pay 20% of the Medicare-approved amount.
Ambulatory surgical centers: You pay 20% of the Medicare-approved amount. If it’s a procedure Medicare doesn’t cover in these kinds of centers, you pay 100%.
Other: You pay 20% (or a standard copayment) for cardiac rehab, chemotherapy, chiropractic services, clinical research, defibrillators, diabetic supplies, doctor and other health care providers, durable medical equipment, EKG screening, emergency services, home health services, kidney dialysis services, lab work, and more.

For a complete listing, see our online report, "What Medicare Covers and Does NOT Cover."

Gap #2: Shortfalls.

If your doctors accept Medicare assignment (getting paid directly by Medicare), they cannot charge more than what Medicare allows. They have to stick with the national fee schedule for their services. Then, Medicare will generally pay 80% of that amount and you pay the balance. But if your doctors are not on Medicare assignment, then they can charge you a lot more, and guess who is responsible for paying the difference! You!

Gap #3: Services not covered.

There are still many services and expenses that are not covered at all, or at least not directly. Those can include many kinds of 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.