Think Medicare Covers Everything? Here's What It Doesn't Pay For.

There’s a reason a lot of people don’t retire until they turn 65. That’s when Medicare eligibility usually begins. And without Medicare, it can be quite expensive to put health coverage in place if you don’t have access to a subsidized employer plan.

But one big mistake a lot of retirees make is assuming Medicare will cover all of their health-related expenses. In reality, Medicare does not cover everything. And failing to understand the program’s limitations could leave you squeezed financially once you enroll.

Image source: Getty Images.

Understand your coverage gaps

While it’s true that Medicare covers a host of common services, from hospital stays to diagnostic tests to the treatment of various illnesses, there are certain services it will not cover. A few you should know about are:

• Dental exams, cleaning, and fillings.
• Eye exams, glasses, and contact lenses.
• Hearing aids.

Many people underestimate the cost of having to pay for these expenses out of pocket. But over several decades, they can easily add up.

Medicare will also not pay for long-term custodial care – services like home health aides, assisted living, and nursing home care. When the primary reason for needing care is aging, not a medical issue, that’s where Medicare says “I’m out.” But for people who end up needing long-term care for an extended period of time, the costs could be catastrophic.

Plan ahead so you’re not thrown for a loop

It’s important to understand what Medicare will and won’t cover ahead of retirement so you can plan for any coverage gaps you expect to face. You can also employ different strategies to work around them.

Medicare Advantage, for example, is an alternative to original Medicare that’s available to older Americans. And Medicare Advantage plans commonly _do _cover dental care, eye exams, and hearing aids.

There can be drawbacks to enrolling in a Medicare Advantage plan, like being limited to specific provider networks and facing delays in care due to prior authorization requirements. But it’s worth looking into Medicare Advantage if you’re nearing 65 and are worried about the services original Medicare won’t pay for.

It’s also smart to shop for long-term care insurance ahead of retirement so you’re not forced to foot the bill for a nursing home stay, home health aide, or assisted living on your own. Policies can vary a lot in terms of rates and coverage, so it’s important to do a lot of research.

Finally, if you have access to a health savings account, it pays to fund it during your working years and, if possible, reserve the money for retirement (if not all of it, then at least a portion). You may be able to use it to pay for some of the things Medicare won’t.