The more you know about Medicare, the better your coverage will serve you
Medicare, a federally funded healthcare program, offers hospitalization (Part A) and medical coverage (Part B) to US citizens or permanent residents who are 65 or older or on disability and who meet eligibility requirements.
While Medicare won’t cover all your healthcare-related expenses, it can be a great help. If you meet the requirements, you’re entitled to it and the benefits it offers.
Still, Medicare is a complicated system to navigate, and it can be easy to make costly mistakes. Here are the top seven mistakes people make when dealing with Medicare and how you can avoid them.
- Assuming Medicare enrollment is automatic
If you are already receiving Social Security benefits when you turn 65 — either through retirement or disability — you will be automatically enrolled in Medicare Parts A & B. Otherwise, you will need to enroll (most people become eligible when they turn 65). There is an Initial Enrollment Period that runs for seven months — three months before your 65th birthday, the month of your birthday, and three months after. If you fail to enroll for Medicare Parts A, B and D (Prescription Drug Coverage), you may have to pay late penalty fees for as long as you are on Medicare — a costly mistake! Read our blog to learn more about Who, How and When to Enroll in Medicare.
- Not enrolling because you still work
Don’t think that you should wait until you retire to enroll in Medicare. If you are on an employer-sponsored health plan, you are still required to sign up for Medicare during your Initial Enrollment Period if your employer has fewer than 20 full-time employees. If you fail to sign up during that time, you will be subject to penalties. If you work for a company that has more than 20 full-time employees, you can delay your Initial Enrollment Period and sign up during a Special Enrollment Period instead. This period begins the day you leave your job or lose your employer-sponsored health plan — whichever comes first — and lasts for 8 months. You must sign up during this time period or pay late fees.
- Thinking you don’t need to enroll in Part B if you have COBRA or Retiree Coverage
Medicare Part B is optional, but if you want to delay Part B coverage because you have COBRA or Retiree Coverage, think again. If you are still employed and have employer-sponsored health insurance, you may be able to delay enrollment until a Special Enrollment Period (See #2 above). However, COBRA or Retiree Coverage are not considered “active employment,” so if you fail to enroll for Part B during your Initial Enrollment Period, you will be subject to late enrollment penalties.
- Not notifying Medicare that you’ve left your employer coverage
If you do retire, quit or otherwise lose your job and the employer-sponsored health plan you’ve been on, it’s a good idea to call 1-800-MEDICARE and let them know that Medicare will now be your primary insurance. While your former employer should take care of this for you, sometimes it does not happen, in which case Medicare will deny all your claims because they think you still have your employer’s insurance as your primary insurance.
- Not paying your Medicare Part B premiums
Most people don’t have to pay anything for Medicare Part A as long as they’ve met certain work requirements. However, Medicare does charge premiums on Medicare Part B. If you’ve delayed getting your Social Security benefits because you are still working, those Medicare Part B premiums can’t be deducted from your Social Security checks (since you aren’t receiving those), so Medicare will instead send you a quarterly invoice. If you somehow miss these invoices in a mountain of mail and don’t pay, you will lose your Medicare Part B coverage. Additionally, you will no longer qualify for Medicare Advantage or a Medigap Plan, and those plans will be canceled. You’d then not be eligible to re-enroll until the next General Enrollment Period. This could leave you essentially uninsured for months, and if you have any health problems during that time, you could face huge medical bills. To avoid this, either watch the mail closely, or call Social Security at 1-800-772-1213 and set up automated payments for your Part B premiums.
- Not signing up for Medicare Part D (Prescription Drug Plan)
If you don’t take prescription medications, you may decide that you don’t want to pay for the optional Part D prescription drug plan. Unfortunately, if you don’t sign up as soon as you are eligible (and don’t have drug coverage through another plan), you will have to wait until the next Open Enrollment Period to enroll. In the meantime, if you need to take an expensive prescription, you’ll have no coverage and could have to pay thousands of dollars out of pocket. Instead, enroll in a prescription plan that has low premiums just to ensure you have some coverage if you need it.
- Not reading your Annual Notice of Change
Every September, if you are enrolled in a Medicare Advantage Plan (HMO or PPO) or a Part D Prescription Plan, you will receive a document in the mail that will tell you how your plan’s costs and coverage will change in the next year. Make sure you closely read this document and compare your plan to others. You may decide to switch to another plan during Open Enrollment (which runs from October 15 to December 7) to save money or receive benefits that better fit your needs.
To avoid all these costly mistakes, work with a licensed healthcare insurance agent to help guide you through your eligibility requirements, selecting a plan, the enrollment process and more.