With age comes wisdom—unless we’re talking about healthcare benefits. If your employees are confused about their health coverage now, just wait until they turn 65. Medicare coverage isn’t always consistent or clear, and getting answers about its costs can be a challenge.
That’s why it’s so important for employers to take time now to prepare employees for the potential costs of healthcare in their retirement (or if they sign up for Medicare while they’re still employed). But how can you prepare employees when there are so few clear-cut answers about Medicare benefits?
Quick refresher: What are the different types of Medicare?
Are you as confused as your employees are? We don’t blame you — so let’s take a quick minute for a medicare explainer. The most commonly known type is Original Medicare, which is a fee-for-service health plan that consists of two parts:
- Part A (Hospital Insurance): Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home healthcare. There’s no monthly premium for Part A for most beneficiaries.
- Part B (Medical Insurance): Covers certain doctors’ services, outpatient care, medical supplies, and preventive services. There is a monthly premium for this coverage.
While this distinction helps, your employees might easily be led astray. For example,Part B covers “other medical and health services not covered by Medicare Part A.”
That could easily lead your employees to believe that anything that’s not an inpatient-related service is fair game for Medicare Part B coverage. But they’d be wrong. The key test for coverage under Medicare Part B is whether Medicare deems a service or supply to be either “medically necessary” or “preventive.” Clear as mud?
Don’t worry. In this guide, we’ll explore how Medicare defines those terms, and review some common questions about services that are and aren’t covered by Part B.
What does “medically necessary” mean?
Healthcare.gov defines “medically necessary” services as those “health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.” CMS further notes that “medically necessary services and supplies” must meet four criteria:
- They are proper and needed for the diagnosis or treatment of a medical condition.
- They are provided for the diagnosis, direct care, and treatment of a medical condition.
- They meet the standards of good medical practice in the local area.
- They are not mainly for the patient’s or doctor’s convenience.
That doesn’t clear it up much, does it?
In general, Medicare Part B will cover most medically necessary doctor visits (if the doctor is Medicare-approved), outpatient hospital care, and screenings.
But when is something truly medically necessary? Perhaps it’s easier to look at what CMS has deemed to be not medically necessary. The list of services that aren’t medically necessary includes:
- Services given in a hospital that, based on the beneficiary’s condition, could have been furnished in a lower-cost outpatient setting
- Hospital services that exceed Medicare’s length-of-stay limitations
- Evaluation and management services that exceed those considered medically reasonable and necessary
- Therapy or diagnostic procedures that exceed Medicare usage limits
- Screening tests, examinations, and therapies for which the beneficiary has no documented symptoms or conditions, except for certain screening tests, examinations, and therapies
- Services not called for based on the beneficiary’s diagnosis (for example, acupuncture and transcendental meditation)
- Items and services administered to a beneficiary to cause or aid in causing death
While those exclusions narrow down potential coverage, it’s still not always clear to people whether Medicare will cover a service or supply that they feel they need. Let’s turn next to the second prong of Medicare Part B coverage: preventive care.
What does Medicare consider “preventive services”?
Medicare defines “preventive services” as any health care designed to prevent an illness or detect it at an early stage. The list of covered preventive services is long and varied, ranging from annual wellness checks to screening for alcohol misuse and nutrition therapy services to cancer screening. Medicare will also pay for one “Welcome to Medicare” preventive visit, which includes a review of the patient’s medical and social history as well as education and counseling about available preventive services.
Let’s take a look at some of the most common questions that employees may have about their future Medicare coverage.
Does Medicare cover dental care?
Generally, Medicare does not cover dental care. It won’t pay for oral surgery or dental procedures like cleanings, fillings, or extractions. It also won’t cover dentures or other dental devices. Employees who want dental coverage need to enroll in Medicare Part C (a Medicare Advantage Plan) or a standalone dental plan.
Does Medicare cover eye exams?
Even though routine eye exams may be considered “preventive,” they aren’t covered by Medicare. Employees also have to pay the full cost of any eyeglasses or contact lenses.
As with dental insurance, employees who want vision coverage will need to seek out Part C coverage or a supplemental plan.
Does Medicare cover cataract surgery?
Outpatient cataract removal surgery using traditional surgical techniques or lasers does fall within the coverage of Medicare Part B so long as it is deemed medically necessary. Medicare will pay 80% of the cost of pre-operative exams, cataract removal surgery, lens implantation, and post-operative exams. After surgery, Medicare will also cover the cost of one pair of glasses or contact lenses.
Does Medicare pay for hearing aids?
If your healthcare provider orders testing, Medicare will cover diagnostic hearing tests to determine whether you need treatment for hearing loss. It will also pay for the treatment of a hearing-related condition. However, Medicare won’t cover exams for fitting hearing aids or pay for the hearing aids themselves. Employees who want specific hearing aid coverage will need to obtain separate insurance.
Does Medicare cover the shingles vaccine?
Medicare Part B covers some vaccines, including those for flu, pneumonia, and hepatitis B. However, the shingles vaccine isn’t one of them, even though it’s a preventive service. For coverage of the shingles vaccine, your retirees will have to sign up for Medicare Part D, which is the prescription drug benefit program.
Does Medicare cover COVID-19 testing?
Medicare Part B covers all of the costs for COVID-19 clinical lab tests. Employees don’t need a doctor’s order to qualify for testing. Employees can also get COVID-19 antibody tests to see whether they’ve already had COVID-19.
Additionally, as of April 4, 2022, all Medicare Part B members can get eight free at-home COVID-19 tests every month. Medicare pays pharmacies to provide these tests. All your employees have to do is find a participating pharmacy. (Note that Medicare won’t reimburse at-home tests bought before April 4, 2022.)
Does Medicare cover chiropractic services?
Medicare covers 80% of the cost of chiropractic services for medically necessary spine manipulation to treat back pain. More specifically, the treatment must manually adjust the spine to treat a subluxation, which happens when a vertebra is out of position. Medicare won’t cover the cost of maintenance chiropractic treatments, massage therapy, or X-rays.
Prepare your employees for the next step
It’s never too early to start preparing your employees for the future. And with the limitations of Medicare Part B, employees need to be forewarned that they’ll need supplemental coverage if they want dental and vision benefits or prescription drug coverage after they’ve enrolled in Medicare Part B.
As employees near retirement age, they need sound advice from a voice they trust. ALEX Benefits Counselor can help your employees understand their options and put together a smart benefits strategy that gives them the medical, dental, vision, and voluntary benefits coverage they want while optimizing their costs.