5 Common Medicare Mistakes
Learning Medicare > 5 Common Medicare Mistakes
Key Takeaways
- Costly Medicare mistakes are common if you miss your window to enroll and choose the wrong plan initially. Please talk to an expert who can guide you!
- You can also make mistakes, such as not reviewing your coverage each year and assuming your spouse has coverage.
- You can also get hit with a lifelong penalty if you fail to enroll in Part B when you have retiree insurance or CORBA.
If you’re 65 or older, you’ve probably realized Medicare helps with a decent portion of your healthcare bills. Unfortunately, Just signing up for Medicare isn’t the end – it’s just the beginning of managing your your Medicare benefits. Making a simple mistake can be very costly, or worse…leave you without coverage.
Check out our list of common (and costly) Medicare mistakes to dodge. Being aware of these can help you make the most of your healthcare coverage.
1. Missing your Initial Enrollment Period
If you’re already receiving Social Security or Railroad Retirement benefits, you’re automatically enrolled in Medicare. However, if you’re not, it’s up to you to enroll during your initial enrollment period to avoid unnecessary and permanent penalties. This period includes your birthday month, three months before your birthday month and three months after your birthday month.
However, not everyone takes Medicare when they turn 65. If you’re still working, you need to sign up when you leave your job. Don’t make the mistake of thinking you don’t need to enroll if you’ve got retiree health benefits after you quit!
If your employer has fewer than 20 employees, you’ll need to enroll in Medicare when you turn 65, even if you’re still on the job. That’s because Medicare is the primary payer for smaller companies; if you don’t enroll, your group plan may refuse to pay claims.
2. Choosing the Wrong Medicare Path and Plan
Of the top mistakes people make, this one might be the most confusing and frustrating for consumers. There are many reasons why you need to compare Medicare paths (Supplement or Advantage) as well as individual plans (Supplement Plan Letter or Advantage plan type). Failing to do this can mean massive headaches and can be very costly down the road.
You have two main ways to get your Medicare benefits: Original Medicare (Part A and Part B) with a Supplement plan and a Part D prescription drug plan, or Medicare Advantage with a Part D drug plan rolled into one. There are advantages and disadvantages to each option, but you need to think through your health and budget needs before you choose.
Medicare Advantage plans tend to cost less overall, but they often have restrictions on where and how you get care. On the plus side, most include Part D prescription drug coverage, so you get all your Medicare benefits in one convenient plan.
Original Medicare with Supplement and a Part D plan may cost more in monthly premiums, but you can use them wherever Medicare is accepted. If you travel a lot or want the freedom to see any doctor or specialist you want, this path may be best for you.
The good news is that you get the opportunity to switch between the two paths if you make a bad decision. You’re not locked into a particular plan for life, although you have to be careful if you think you want Medigap. Miss your initial enrollment period, and you may not be able to buy it later if you have a pre-existing health condition.
3. Taking the same Medicare plan as your spouse/friend/co-worker/family member
Medicare sign-up mistakes come in many different forms. A common error in judgement (not your fault!) is enrolling in the same coverage as your friends, spouse, family, etc. While some Medicare Part A benefits can be shared among spouses, other components cannot. Furthermore, everyone’s healthcare needs are completely different. Just because a plan works for your spouse or a friend does not mean it will work for you. Every single person needs their own individually tailored Medicare plan, which suits their individual healthcare needs, wants, and budget.
Medicare is not like employer group insurance—you can’t add your spouse and/or dependent children to your plan. If you’re working at 65 and your younger spouse is on your employer’s plan, you need to weigh the financial consequences of switching to Medicare.
Another point to remember concerning spouses—Medigap and Part D are individual plans. That is, you can’t add your spouse to your plan; they need to buy a separate one. There’s also no spousal discount, so don’t feel you both need to choose the same plan. Your spouse may have different health care needs, so you each need to choose the Medicare plan that works for you.
Even if a person and their spouse share the same doctors, they still need to get their own individual Medicare plan which was selected for them personally, taking into account many different factors. This will ensure the bet possible outcome with their health insurance throughout their retirement.
4. Not Enrolling In Medicare When Necessary
One of the most common Medicare mistakes is failing to enroll in Original Medicare and/or Medicare Part D when necessary, and without having creditable coverage. By not enrolling when you’re eligible and when necessary, you’re subjecting yourself to lifetime penalties. Here are the penalties you risk when you are delaying Medicare:
- Although most people avoid penalties for Medicare Part A, those who do incur a penalty will be charged a 10% premium increase for double the number of years they didn’t have coverage.
- A Medicare Part B penalty is going to cost 10% of the current Part B premium added on to the regular monthly premium, and is based on each 12-month period that you forgo coverage despite being eligible. This penalty never goes away.
- The Medicare Part D penalty is also applicable to those who qualify for Part D but do not enroll and do not have creditable coverage through an employer or union. This penalty is 1% of the average annual Part D premium for each month of delayed coverage. This penalty never goes away.
5. Letting Your Health Or Drug Plan Renew Without Doing An Analysis
Get An Expert On Your Side To Prevent These Mistakes!
We help thousands of people every year navigate the massively complicated “Medicare Maze”. We’d be more than happy to lend our expertise and make this simple and easy for you so there’s no question that you made the best decision possible. Whether its doing an analysis on your current coverage versus Medicare, need help with enrollment, whatever it may be, we have your back!
To get our FREE expert assistance, call us at 717-942-8788 or click below to book an appointment!
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