If you are about to turn 65 and already receive Social Security benefits, you should keep in mind that you will be enrolled in Medicare automatically on your 65th birthday.
However, if you don’t receive Social Security benefits, you must sign up for Medicare on your own. You will have a period of seven months during your Initial Enrollment Period to sign up for Medicare.
If you miss signing up during this time or want to change your plan, you will have to wait until the Annual Enrollment Period (AEP) that starts on October 15th and ends on December 7th every year.
The AEP is crucial for everyone to evaluate their healthcare needs and choose a plan that they believe will cover them adequately in the coming year.
Therefore, it is critical to understand the AEP and how it works to avoid committing one of the following common Medicare enrollment mistakes that can be costly.
1. Missing the Initial Enrollment Window
Typically, you have seven months to sign up for Medicare when you first become eligible. The seven months encompass the three months leading to your 65th birthday, the month of your birthday, and the next three months after your birthday.
This period is usually referred to as the Initial Enrollment Period. If you don’t qualify for automatic enrollment, you will be required to fill out an online application with the Social Security Administration to sign up for Medicare Part A and Part B.
If you miss signing up during your Initial Enrollment Period, you will be forced to wait until the annual general enrollment period that usually runs from January 1st to March 31st.
If you miss enrolling on both occasions, you may be forced to pay late enrollment penalties for Medicare Parts A, B, and D.
2. Not Understanding Your Out-of-Pocket Costs
One of the biggest mistakes people make out there is thinking that Medicare is completely free, which is not true. Although the plan is designed to cover a significant portion of your healthcare costs, you are still responsible for some charges.
Therefore, don’t make the mistake of shopping for your Medicare plan by comparing monthly premiums only. Sometimes, you could be paying a relatively low monthly premium, but out-of-pocket expenses are much higher.
Each Medicare plan will usually have a cost based on the monthly premium, deductible, copayment, and coinsurance. Feel free to use the Medicare out-of-pocket estimator to see how your coverage choices may affect your coverage cost.
3. Expecting Your Health to Remain the Same
One of the top reasons some people ignore Medicare is that they believe their health will remain the same forever. But the truth is that as your body grows older, it starts to react differently to various conditions.
Even the changes that occur to your physical appearance, such as your hair turning grey or skin forming age lines around your eyes, occur due to internal body changes.
This is why you need to be fully prepared for the unexpected. The most common way your health changes is through the cardiovascular system. Your blood veins and arteries stiffen, causing your heart to work harder to pump blood, something that you may have never experienced as a kid.
When your heart is forced to work harder, you risk developing high blood pressure and a wide range of heart diseases.
Another way your body will respond to aging is through bones and joints. As you become older, your bones tend to shrink in size and density and become weak, making them more susceptible to fracture.
The bottom line is that your health doesn’t remain the same as you age. Even if you have led a relatively healthy lifestyle, you need to keep in mind that you are more susceptible to diseases than ever before. It may be just a matter of time before something happens and you need hospitalization.
That is why it is critical to enroll in Medicare at the earliest possible opportunity. You should even consider Medicare Advantage that can help you cover things such as gym membership and routine vision care.
4. Disenrolling from Medicare Advantage without Medigap Approval
One of the most significant changes you can make during the annual Medicare enrollment period is leaving Medicare Advantage and returning to Original Medicare. A significant number of people who choose this route usually enroll in Medigap to complement their Original Medicare coverage.
Unfortunately, the annual enrollment period doesn’t provide you with a free pass to enroll in a Medigap plan. In most states, you will be expected to answer a set of questions about your health and wait for a decision on whether you qualify for Medigap or not.
Things can take a wrong turn if the Medigap company declines your application. Therefore, we highly discourage you from leaving Medicare Advantage or signing up for a free prescription drug plan without confirming if you have been approved for Medigap.
Otherwise, you could find yourself in a tricky situation that will force you to start paying up to 20% of all your outpatient medical costs.
5. Not Contesting the High-Income Surcharge When You Retire
Most people pay about $148 per month for Medicare Part B in 2021, but if your modified adjusted gross income is more than $87,000 for unmarried people and more than $174,000 jointly for couples, then you may be forced to pay a relatively higher surcharge which can push your monthly premium up to $498 depending on your income.
The surcharge is usually based on your last filed tax return. So, the 2021 premiums are based on your 2019 income.
If your income has dropped since then because of certain events such as divorce, job loss, retirement, marriage, or death of your spouse, then you have a right to get the surcharge reduced or eliminated depending on your more recent income.
To request the changes, wait until you get the notice of your Medicare Income-Related Monthly Adjustment Amount, then proceed to file form SSA-44 with the exact date the life-changing event happened and attach a copy of your most recent tax return or an estimate of your annual income.
You also need to provide evidence of the life-changing event, such as a death certificate or a letter from your employer stating that you have been allowed to retire.
6. Assuming You and Your Spouse Need to Be on the Same Part D Plan
You are married, and you love each other so much. As a couple, there are some things you’d love to do together but choosing a Medicare Part D plan isn’t necessarily one of them.
If you and your spouse have different medical conditions and take different medications, the Medicare Plan D that is right for you isn’t necessarily the best option for your spouse.
So, what should you do in such a case? Well, all you have to do is approach the plan selection process as two different individuals, especially since Medicare Part D doesn’t offer any form of family discount.
7. Not Maximizing Your Plan’s Value
When it comes to paying for your healthcare through Medicare, especially if you are on a fixed income, you need to ensure you get the best out of your plan.
That is why you need to take time and evaluate as many options as possible and compare the different benefits offered by different plans before you make a choice. This is especially true if you are on Medicare Advantage.
Some of the benefits you should evaluate and take advantage of including dental care, routine vision care, gym membership, hearing aids, podiatry, transportation to doctor offices, and much more.
Summary
The Annual Medicare Enrollment period is nearly two months long. It means that you have plenty of time to review your options and secure the right plan that will provide you with adequate coverage for the coming year.
If you feel overwhelmed by the process, don’t hesitate to talk to an expert who will assess your healthcare need and advice you accordingly.
At Insurance Master, we care about you and want to help you make an informed decision. Contact us today to speak to a licensed Medicare agent who will assess your needs and guide you accordingly.