Medicare can be difficult to navigate for folks who are new to the system. More than 10,000 individuals find their way into the program each day. If you are going to be one of them soon or just recently turned 65, invest a few minutes here to make sure you’re properly protected
First, get acquainted with the Medicare Rights Center . This is a consumer advocacy group that represents folks on Medicare. They offer a lot of valuable resources regarding protecting your Medicare Rights.
So what are the 10 biggest mistakes you can make with Medicare? Here goes…
- Assuming you don’t qualify.
Medicare Part A requires 40 “credits” to get Part A services without having to pay premiums. A “credit” is simply a quarter of a year, so 40 credits is about 10 years worth of work in total. You can qualify for Part B without work credits. And Part D simply requires that you be 65 years or older and a citizen or legal resident who’s lived in the U.S. for at least 5 years.
- Failing to register for Part B coverage when you should.
If you fail to register at the correct time you risk penalties in the form of surcharges that will be added to your Part B premiums. There is an exception. Do you have health insurance beyond 65 from an employer where you (or your spouse) are actively working? Does the company have 20 or more employees? If so, you can put off Part B registration without facing a penalty until you or your spouse are no longer working for that firm. Otherwise, if you plan to have Part B protection, you must enroll in Part B coverage when you turn 65. (You can register up to 3 months before turning 65 and 3 months after.)
- If you have COBRA benefits, you still must register for Medicare Part B.
While Part B coverage is optional, you should talk with your insurance professional / financial advisor about your options. COBRA allows you to continue on your employer’s health plan after you retire for about 18 months. But if you need Medicare Part B, COBRA doesn’t give you a reason to put off getting Medicare Part B coverage. So if you are on COBRA and just turned 65, you need to be sure to get on Part B coverage if you plan to enroll in it.
- Thinking you need to reach complete retirement age before registering for Medicare
The retirement age is creeping up. (It’s 67 for folks born after 1959.) But to avoid late penalties, you still need to sign up for Medicare when you turn 65. (Again, if you or your spouse are still actively employed with health protection, you can wait.) They key here is that you don’t need to wait to start receiving Social Security benefits to enroll in Medicare and waiting to do so could cost you.
- Avoiding Part D if you currently aren’t taking medications.
Part D offers protection against the high cost of drugs such as cancer treatment. But like all insurance, you can’t wait until you need the insurance to sign up for it. You need to have Part D coverage even if you are 100% healthy currently. Otherwise, you could face substantial late charges that will be incorporated into your Part D premiums. But if you are retired, your income is typically more limited. So, a little bit of forethought could help make life much easier for you by keeping your premiums low.
- Misunderstanding registration periods
You might have read about “open registration” and gotten the idea that this is the only time you can register for Medicare. Not so! In Medicare, open enrollment (Oct. 15 to Dec. 7 each year) is simply for individuals who are already in the program. That’s the time they can alter their protection for the following year. If you are new to Medicare, your enrollment period is around the time you turn 65. (3 months before & 3 months after.) You also have up to 8 months after your health insurance ends with your employer if you’ve already turned 65. Either way, waiting for “open enrollment” could be a costly mistake.
- Selecting Part D drug coverage because of premium costs, brand name, rather than the protection it offers.
Part D protection varies quite a bit. Not all plans have standard amounts for what drugs they include and what they charge for co-pays. The best thing to do is to compare costs base on the actual drugs you currently take. You can call Medicare at (800) 633-4227 for further details or talk with your insurance professional.
- Being late to purchase Medigap.
Medigap supplemental insurance offers extra protection that you can opt to buy. It covers some or the majority of your out-of-pocket expenditures in standard Medicare. This can include deductibles and copays. To get the complete federal protections, you need to purchase it when you turn 65. The rules that govern getting Medigap insurance can be complex. So we highly recommend you seek advice if you are thinking about putting off getting protected when you turn 65.
- Failing to read your Annual Notice of Change.
Each year you are sent a document in September if you are enrolled in Medicare or have Part D coverage. This document details the changes the plan will be making in the protections it offers and in what that protection will cost. If the changes aren’t to your liking, it’s time to consider what changes you may need to make in your plans during open enrollment.
- Not recognizing that you may qualify for assistance to reduce your costs.
There are a lot of costs to Medicare. You pay premiums, co-pays, and deductibles. Many retired folks find it difficult to keep up with the payments. If you are in that situation, there are two programs that can help you if you qualify.
The first is called a Medicare Savings Program. With this program your state pays the Part B premiums and may cover additional costs.
The second is called the Federal Extra Help program and can help you obtain affordable Part D drug coverage.
To see if you can be approved for either program you need to call the state’s health insurance program and find out what options are available. You can go to https://shiptacenter.org , select your state, and find the right phone number to call.
Final Thoughts on Medicare
Medicare is complex. And like all insurance, it’s best to talk with folks who understand the options available in the market as well as your personal situation. This way you can know that you have the protection you need at a price that will be affordable to you.