Highest Out of Pocket Expenses for Medicare Beneficiaries and How to Avoid Them

Jan 28, 2021

For many seniors, Original Medicare offers a foundation for covering healthcare expenses. Unfortunately, it doesn’t cover everything. Medicare beneficiaries who only elect Original Medicare may face surprisingly high out of pocket expenses for uncovered services.  Let’s take a look at what Original Medicare covers, as well as strategies to expand your benefits in order to avoid high out of pocket expenses.

Average Costs and Coverage for Original Medicare

Original Medicare includes two coverage areas, which are also known as the different Parts of Medicare. Medicare Part A covers hospital and long-term care costs, such as skilled nursing facilities and hospice care. Medicare Part B insures doctor’s services, such as physician visits, outpatient treatments, and preventative services. Original Medicare includes both Part A and Part B.

Even with both parts of coverage, Medicare recipients still find themselves responsible for some of their coverage charges. AARP reports that seniors paid the following costs associated with their Medicare in 2017:

  • $1,316 deductible for hospital or long-term nursing facility before Medicare Part A coverage starts
  • Up to $658 daily copay for extended stays with Medicare Part A
  • $183 deductible for physician and outpatient appointments with Medicare Part B insurance
  • Approximately a 20% copay for each covered Medicare Part B appointment

While Original Medicare offers some coverage, seniors still face Medicare out of pocket expenses on insured services. In 2016, the average Medicare patient paid $5,460 for their medical care.

Lack of Coverage with Original Medicare

Although Original Medicare covers both hospital and medical services, many beneficiaries expect it to handle all their medical costs. Unfortunately, that is not the case. Original Medicare falls short on coverage many seniors rely on like:

  • Prescription Drug Coverage
    Original Medicare doesn’t cover prescription medications. In 2016, seniors in excellent health with only Original Medicare paid around $400 on prescriptions. Those in poor health or with multiple chronic conditions paid more than $1000. Cancer patients can easily spend more than $1000 filling one prescription. Medicare Part D offers prescription coverage, though beneficiaries are still responsible for some of the cost of their medicines.
  • Dental, Vision, and Hearing Care
    Regular dental, vision, and hearing checks are a vital part of healthy aging, but Original Medicare doesn’t cover these services. Beneficiaries with Medicare Part A and B must provide for these costs out of their own budget.
  • Long-Term CareMedicare Part A does offer some coverage for long-term care. Hospital stays, skilled nursing facilities, and even hospice care are covered by traditional Medicare. However, Medicare coverage decreases based on the length of the stay.

Ways to Avoid Out of Pocket Expenses

Expand your Benefits

One way to reduce unexpected Medicare out of pocket expenses is by expanding your coverage. Medicare Advantage plans and Medicare Supplement plans offer more benefits than Original Medicare. These plans offer all the same benefits as Original Medicare, but also provide more service. You can add dental, vision, and hearing services, expand your prescription drug coverage, and more.

Review your Coverage Annually

Another way to avoid unexpected out of pocket expenses is to review your coverage. Each year, from October 15 – December 7 Medicare holds the Annual Election Period (AEP).  During this time Medicare beneficiaries have the option to review their coverage and make changes to their existing plans.  Individuals who take advantage of this opportunity more often than not end up finding more comprehensive coverage at a better price.

Concerned About Out of Pocket Expenses?

Connect with one of our Independent Insurance Agents to explore your options and expand your coverage!


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