More than a half-century since its creation, Medicare remains the most popular healthcare insurance program serving more than 60 million seniors and disabled Americans. However, “popular” doesn’t mean it is easy to navigate.
In fact, Medicare rivals Social Security in complexity adding to the numerous challenges that senior citizens encounter when trying to ensure they get the best out of the program. One of the reasons why Medicare is complex is that it deals with the healthcare industry that is constantly changing.
Even though the program is complicated, it doesn’t have to be so complicated to the point where you are completely frozen in your tracks. Instead of being overwhelmed with its totality, consider breaking it down into pieces and tackling one piece at a go.
So, what are some of the costly Medicare mistakes that you need to avoid? Read on to find out everything you need to know.
Mistake #1: Not Signing Up at the Right Time
The program usually has an Initial Enrollment Period (IEP) and the General Enrollment Period (GEP). The IEP refers to the period when you can first sign up for Medicare. It is a seven-month block that starts three months to your 65th birthday, includes the month of your birthday, and collapses exactly three months afterward.
The main advantage of signing up during the Initial Enrollment Period is that it can result in slightly lower Medicare premiums than if you waited for the General Enrollment Period.
If you miss signing up during your IEP, you will have another chance during the GEP that runs from January 1 to March 31 each year. However, if you wait until that time to enroll, it can cost you.
The first negative impact of enrolling during GEP is that your coverage won’t start until July 1. It means that if you need coverage before then, you may be forced to pay for everything out-of-pocket.
The other disadvantage is that you may end up paying higher premiums, meaning it will cost you more for outpatient care and doctor visits.
Mistake #2: Assuming the Government Will Help You
The first Medicare lesson that retiring seniors must learn is that they are on their own when navigating and managing Medicare. The government will not hold your hand and guide you through the extensive enrollment process or any other part of dealing with the Medicare program.
In most cases, the assumption that the government will help you can confuse new enrollees who are just shifting from their employer-provided health insurance. To some extent, employer-provided health insurance usually provides a clear path for employees. However, in the world of Medicare, everything is different.
Seniors have to make critical decisions on their own and pick a plan that will ensure they have adequate coverage. Medicare is not an automatic process, and the policy won’t show up on your doorstep if you don’t take necessary actions.
Mistake #3: Renewing Your Plan Automatically without Reviewing It
Your Medicare Advantage (Part D) plan usually renews every year on January 1 unless you decide to terminate or change it. In most cases, automatic renewal may sound like a great thing, but it can be one of the worst Medicare decisions you ever make.
Typically, Medicare Advantage plans can change the health benefits and prescription drugs they cover from year to year. There may also be changes to your premium, coinsurance, copay, and deductible amounts.
Private insurance companies usually review their plans every year to ensure they are still viable. Therefore, it could be a critical mistake not to review your plan’s coverage details and let it renew each year automatically.
Mistake #4: Assuming You Don’t Qualify If You Have Not Worked Long Enough
You need to earn at least 40 credits during your working years to qualify for Medicare. Technically, it means paying payroll taxes for about ten years of your working life. However, earning 40 credits only means one thing: It ensures you won’t pay premiums for Medicare Part A benefits, which covers hospital stays.
But you don’t need any work credits to qualify for Part B, which covers outpatient care and other doctor services. You also don’t need the credits to qualify for Part D, which covers prescription drugs. You can enjoy Medicare Part B and Part D benefits as long as you are 65 or older and pay the required monthly premiums.
Individuals can even qualify for Part A benefits on their wife’s/husband’s work record, or can still pay a premium for Part A benefits. If you wait until you have earned 40 work credits before enrolling for Medicare, you may have to wait for too long and end up paying permanent late penalties.
Mistake #5: Purchasing the Same Medicare Part D Plan as Your Spouse
Every individual is different in their current medical conditions and medical history. Therefore, a plan that works for you might not necessarily work for your spouse.
One plan may offer better coverage for your drugs, while another may be better suited for your partner’s situation. It is critical to look at your individual needs before choosing a Part D Plan.
You can always look up your prescription drugs using the online Medicare Plan Finder. This will help you approximate your out-of-pocket cost for different plans in your area.
You only need to be careful when you and your partner sign up for Part D plans with different preferred pharmacies because some plans will only give you better rates if you use certain pharmacies. Therefore, you could end up paying a lot of money if you get your drugs elsewhere.
Mistake #6: Failing to Sign Up for Medicare Part B If You Have Retiree or COBRA Coverage
Even if you are taking Social Security benefits, you will still need to act on your Medicare benefits. Once you hit 65 years and you are entitled to Social Security benefits, automatic enrollment to original Medicare (Part A and B) will occur. However, you can choose to delay your Medicare Part B selection depending on your current health insurance situation.
Typically, if your spouse is still working and he/she has you on their health insurance plan, you can forego your Part B selection when enrolling for Medicare.
While some seniors enroll in Medicare Part A as soon as they hit 65, others usually delay the process because they want to continue contributing to their Health Savings Account.
Another critical point you need to remember is that if you work for a small company with less than 20 employees, you must sign up for Original Medicare as soon as you turn 65. At this point, Medicare takes over and becomes your primary form of health insurance coverage.
You Can Still Get Help with Medicare
The truth is that healthcare is among the top financial concerns for most retirees. Medicare benefits will best serve you when you enroll on time and choose an appropriate plan that suits your individual needs.
Even with its complexities and nuances, Medicare can still provide you with great peace of mind that your healthcare is sufficiently covered. At Insurance Master, we believe in helping you find the best Medicare coverage when it matters most.
Contact us today to speak to one of our licensed Medicare experts who will assess your needs and guide you through the process of enrolling for Medicare Advantage. We are here to ensure you get the most from your Medicare benefits.