Workers need to save for more than they think in retirement.
While they already know they’re behind the eight ball in saving, particularly when it comes to health care expenses, there are several things they probably expect Medicare to cover, but the money's going to have to come out of their own pockets instead.
And that’s even if the incoming Republican administration doesn’t shake up Medicare along with health care coverage overall.
That’s going to be a distinct (and expensive) drag on whatever savings they manage to accumulate—and they’d better know about it now rather than later.
The Huffington Post reported that five common things needed by seniors will have to be paid for by those seniors, with a (very) few exceptions:
5. Hearing Aids and Hearing Aid Fitting Exams
While close to a quarter of people aged 65–74 and 50% of those who are 75 and older have disabling hearing loss, according to the National Institute on Deafness and Other Communication Disorders, Medicare doesn’t cover hearing aids.
Neither do state Medicaid programs, the Affordable Care Act or even most private insurance—although the Veterans Administration does, as do some state vocational bureaus.
The ray of sunshine here, reported by Bloomberg, is that a bill introduced in the Senate by Charles Grassley, R-Iowa, and Elizabeth Warren, D-Massachusetts, would change that with the Over-the-Counter Hearing Aid Act of 2016, which they introduced on December 1.
Should the bill become law, it would make some basic hearing aids available over the counter, and cheaply, too (relative to the cost of current good hearing aids).
Support for the bill from the Academy of Doctors of Audiology comes with conditions—that the over-the-counter “hearing aids” (which may not even be called that) “be very specifically labeled and include a strong recommendation that a patient seek a comprehensive audiological evaluation from an audiologist or physician.”
But the brightest ray of sunshine comes from the FDA itself, which has announced that “it does not intend to enforce the requirement that individuals 18 and up receive a medical evaluation or sign a waiver prior to purchasing most hearing aids.”
It also announced its “commitment to consider creating a category of over-the-counter (OTC) hearing aids that could deliver new, innovative and lower-cost products to millions of consumers.”
That’s good news not just for seniors, but for many others — hearing loss affects 30 million people in the U.S. And since the cost of hearing aids can run an average of $2,300, with most people needing two, it’s probably not surprising that only 14% of those who need them have them — largely because of the cost.
4. Dentures and Most Dental Care
What? You thought Medicare would help you pay for dentures or a dental problem so you can keep eating? Wrong!
Even though dental problems, including a lack of teeth, make it difficult for a person to thrive — after all, one can’t survive on energy drinks alone — the only way you’ll get any dental coverage at all, barring special circumstances, is to buy a Medicare Advantage plan (but not all such plans cover any dental).
Medicare does make a few exceptions, but they’re certainly nothing to hope for just to have your dental work paid for. An accident that damages your jaw, for instance, would be one case in which Medicare may cover jaw reconstruction if it is medically necessary to treat the injury.
If you have a jaw-related neoplastic disease, Medicare may cover extraction of teeth to prepare the jaw for radiation treatment. And if you’re in line for a major medical procedure that requires an oral exam, like a heart or a kidney transplant, Medicare will probably pay for a dental exam.
If you don’t have enough cash on hand to keep up your dental health, you could join the 28 percent of people over 65 who have no teeth left.
3. Eye Exams for Contacts or Eyeglasses
Thought Medicare would pay for eye health? Forget it if all you need is a pair of glasses or a set of contacts.
And you’ll have to get Medicare Part B for coverage of some preventive and diagnostic eye exams, such as glaucoma tests and annual exams for diabetics.
The most common causes of vision loss are age-related macular degeneration, glaucoma, cataracts — the Mayo Clinic says that about half of all 65-year-old Americans have some degree of cataract formation, and estimates that by 2020 more than 30 million Americans will have cataracts — and diabetic retinopathy.
2. Routine Foot Care
You might think that Medicare would want you mobile during retirement, so you can take proper care of yourself, run your own errands and even get to the doctor by yourself.
But if your problems are with your feet, that's not going to happen. Medicare doesn’t cover cutting or removal of corns and calluses; trimming, cutting, and clipping of nails; or hygienic or other preventive maintenance, including cleaning and soaking the feet.
Medicare Part B will cover podiatrist services for medically necessary treatment of foot injuries or diseases (like hammer toes, bunion deformities, and heel spurs), but it’s going to cost you; Part B has a deductible and you might also get stuck for a copay if you get something done “in a hospital outpatient setting” for medically necessary treatment.
1. Home Health Services
These could keep you out of a nursing home (which, incidentally, Medicare doesn’t pay for either), but Medicare won’t pay for them.
If what you need is help with the “activities of daily living” or ADLs (long-term custodial care), you’re out of luck, since that’s not skilled nursing home care (which Medicare will pay for, as long as it’s provided in a skilled nursing facility — much more expensive than getting help with ADLs at home).
So forget about getting at-home 24-hour caregiving, meals delivered to your home, homemaker services or personal care.
And while Medicaid will pay for long-term care, you’ll be long out of money before it will step in to do so; you’ll have to spend down all your assets, and forget about leaving the house to the kids; Medicaid can reclaim assets from your estate once you’re gone.
If you can figure out how to pay for it, a long-term care policy could help, but that’s expensive too — and gets more expensive the older you are when you buy it.
--- Related on ThinkAdvisor:
- Start Worrying About Long-Term Care
- The End of Long-Term Care Insurance as We Know It?
- 9 Reasons Retirement May Go Extinct
- 9 Ways to Save on Taxes in Retirement