Wed, Jul 22, 2020

Avoid These 6 Common Medicare Mistakes

If you’re 65 or older, you likely depend on Medicare to pay most of your health care costs. It’s easy to think that all you have to do is sign-up, but enrolling is only the first step in managing your Medicare benefits. Make a mistake and you could be paying for it for years.

Here’s a list of some of the most common (and expensive) Medicare mistakes you can make.

1. Missing your Medicare Sign-up Period

If you’re already receiving Social Security or Railroad Retirement benefits, you’re automatically enrolled in Medicare. If you’re not, however, it’s on you to enroll during your initial enrollment period to avoid unnecessary (and ongoing) premium penalties. This period includes your birthday month and the three months before and after.

However, not everyone takes Medicare when they turn 65. If you’re still working, you need to make sure you 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. You have two ways to get your Medicare benefits: Original Medicare (Part A and Part B) with a Medicare Supplement plan and Part D prescription drug plan, or Medicare Advantage with Part D. There are advantages and disadvantages to each option, but you need to think through your health needs before you choose.

2. Choosing the Wrong Medicare “Path”

You have two ways to get your Medicare benefits: Original Medicare (Part A and Part B) with a Medicare Supplement plan and Part D prescription drug plan, or Medicare Advantage with Part D. There are advantages and disadvantages to each option, but you need to think through your health needs before you choose.

Original Medicare with Medicare 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 you want the freedom to see any doctor or specialist you want, this path may be best for you. Costs are predictable every month and you won’t have any copays to worry about. Two-thirds of all Medicare eligible seniors have Original Medicare plus a Medicare Supplement and a separate Part D Prescription Drug  plan.

Medicare Advantage plans tend to cost less overall, but they often have significant restrictions on where and how you get care. This can be a good choice for seniors who are otherwise healthy with no serious medical conditions and see their doctor only occasionally for checkups. However, if your condition requires frequent physician visits, outpatient testing or hospitalizations, those copays can add up fast. Even healthy individuals can suddenly have health emergencies, so Advantage Plans may not provide the “peace of mind” that you get with a Medicare Supplement. On the plus side, most include Part D prescription drug coverage, so you get all your Medicare benefits in one convenient plan.

The good news is that you get the opportunity to switch between the two paths if you made a bad decision. You’re not locked into a particular plan for life, although you do have to be careful if you think you want Medicare Supplement. Miss your initial enrollment period and you may not be able to buy it later if you have a pre-existing health condition.

3. Letting your Part D Plan Automatically Renew Every Year

Every year between October 15th and December 7th, you have the opportunity to review and/or switch Part D plans. Plan costs and coverages can change from year to year. If you aren’t paying attention, you could pay more than you should for your plan.

Take time during the annual open enrollment period to see what plans are available in your area. Compare the costs for medications you take regularly, as well as monthly premiums.

You can also switch Medicare Advantage plans during open enrollment. If you get your Part D with your Medicare Advantage plan, be sure to compare your plan options every year. Don’t let automatic renewal keep you in a plan that costs too much.

4. Assuming There’s Coverage for Your Spouse

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—Medicare Supplement and Part D are individual plans. That is, you can’t add your spouse to your plan; he or she needs to buy a separate one. There’s also no spousal discount, so don’t feel that 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.

5. Thinking You Don’t Need Part B if you have COBRA or Retiree Health Coverage.

In the vast majority of cases, Medicare is the primary payer once you turn 65. If you left your job but still get health insurance through COBRA or as part of a corporate retiree plan, that plan pays second.

In other words, if you have health expenses, your group plan only pays what’s left after Medicare pays. If you don’t have Medicare, the other plan won’t pay at all.

To make matters worse, if you forgot to sign up during your initial enrollment period, you’ll have to wait until the general enrollment period, January 1st to March 31st, to apply. Coverage begins July 1st, meaning you could be without health coverage for awhile.

6. Ignoring your Annual Notice of Change (ANOC)

Every fall, your Medicare plan will send you an annual notice of change (ANOC). It tells you what changes your plan is making for the following year that may affect your coverage. If you don’t read it, you may miss important information that could cost you big.

Watch for changes in coverage—will the plan still pay for services you need? Also look for changes in your provider network. If your current doctor leaves the plan, you’ll pay much more out-of-pocket if you continue to see him. Be sure to check pharmacy changes if you have a Part D plan.

Finally, look out for changes in costs like copayments, deductibles, and coinsurance amounts. Even small changes can add up to big bucks over the course of a year.

Get Someone on Your Side with Medicare

There’s never any need for you to run into these 6 common mistakes. Just call Karen Lingar or her staff at FirstCommunity Medicare Supplement and we’ll be here to help you every step of the way. To get our FREE assistance with enrolling in the supplemental coverage that’s best for you, call us at 256-532-2785 or 256-532-2783.

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