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Gaps in Medicare

Medicare DOES NOT cover the cost routine dental care, eyeglasses, hearing aids, and most long-term services and supports. Specifically, Medicare does not cover custodial care, which means the care for people who are unable to live independently, but do not have an acute condition requiring skilled medical services. For example, people with Alzheimer's disease or other dementias living in nursing homes would not have their residential bills covered by Medicare. If they suffered a heart attack, or came down with pneumonia, Medicare would cover medical expenses.

Custodial care in a nursing home typically costs more than $78,000 a year, and is covered for the poor under the Medicaid program. But it requires patients to “spend down,” which means using all their financial assets except $2,000 on the nursing home bill before they become eligible for Medicaid.

Most people enrolled in Medicare have some sort of supplemental insurance to help them pay for the things not covered by Medicare, such as extra days in the hospital. This can be a significant additional expense because the individual is paying premiums, either for retiree health coverage from a former job, or for the supplemental Medigap policies.

According to the Academy's Study Panel on Medicare Financing, "Medicare's benefit package has been criticized widely for its inadequacy, a problem that leads both to the reliance by many on supplemental insurance and to a very high out-of-pocket burden on beneficiaries. The use of supplemental insurance may make the provision of care less efficient for some beneficiaries when it creates first dollar coverage, and the administrative costs of these supplemental policies are relatively expensive. Moreover, beneficiaries already bear a considerable share of the costs of their care and, as noted earlier, a typical elderly beneficiary in traditional “fee-for-service” Medicare spends about 19 percent of her income for medical care and insurance. Even with no change in policy, that share could rise to nearly 30 percent of income for a typical elderly beneficiary in 2025 in the likely event that health care costs continue to outpace income.”

For a more detailed discussion, see:

The official Medicare website is