13 Common (and Costly) Medicare Mistakes
Updated: Oct 8, 2019
Navigating Medicare can be a daunting task. And, making mistakes regarding Medicare can be costly.
Here are 13 commonly made Medicare mistakes and how to avoid them.
To learn about the Medicare basics, go to www.guidingwell-being.com and request a FREE copy of the Guiding Well-Being reference guide: “Medicare FAQs and You.” (located at the bottom of the home page)
Mistake #1: You Choose the Wrong Path Because You Don’t Understand the Coverage Options
When you choose how you want to receive Medicare, you make the mistake of picking a coverage option that doesn’t fit your needs and budget. Carefully review the coverage option details.
You have the option of choosing one of two paths:
Traditional (Original) Medicare administrated by the government, which includes Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). You can then purchase a Medicare Supplemental Insurance Plan (Medigap) and Part D (Prescription Drug Plan).
Medicare Advantage (Medicare Part C) offers Part A and Part B benefits through private insurance companies, which contract with Medicare. Medicare Advantage plans often include additional benefits, like prescription drug coverage, dental coverage and vision coverage. Medicare Advantage plans are associated with a set network of doctors and hospitals. When choosing a Medicare Advantage plan, pay attention to its list of doctors and hospitals to make sure you can continue to go to the providers you know and trust.
Mistake #2: You Assume You’re Automatically Enrolled In Medicare When You Turn 65
Some people get Medicare Part A and Part B automatically at age 65, but others may have to sign up manually.
You’ll only be enrolled in Medicare Part A and Part B automatically if: you’re already receiving Social Security or Railroad Retirement Board (RRB) benefits prior to turning 65.
All others should plan to manually enroll in Medicare through the Social Security Administration (or the Railroad Retirement) during their initial Enrollment period. To do this, you can visit the Social Security web site or contact your local Railroad Retirement Board office, if that applies to you.
Mistake #3: You Wait Too Long To Enroll
Knowing when to sign up for Medicare is particularly important. Why? Because if you fail to enroll at the right times, you may end up paying lifetime penalties.
Medicare Part B Lifetime Penalty
If you sign up late for Medicare Part B, you will have to pay a late penalty premium every month for the rest of your life, along with your Part B premium.
Failing to enroll in Medicare Part B when you are first eligible could mean that your premium will go up 10% for each 12-month period you could have been covered but weren’t enrolled. You will pay this higher premium as long as you have Medicare Part B.
You may not have to pay the penalty if you qualify for a Special Enrollment Period (SEP). You might qualify for an SEP if you had health insurance through your job or your spouse’s job when you were first eligible to sign up for Medicare Part B.
If you work past the age of 65 and have health coverage from your employer, make sure you will qualify for a Special Enrollment Period (SEP) when you leave your employer-provided health insurance and wish to enroll in Medicare.
If you or your spouse has workplace health insurance that is considered “creditable coverage,” you may be able to delay your Part B enrollment without penalty until your job ends. Otherwise, you should consider enrolling during your Initial Enrollment Period to avoid the Part B penalty.
If you miss your Initial Enrollment Period and don’t qualify for a Special Enrollment Period, you can sign up during the annual General Enrollment Period (Jan. 1- March 31). But if you do, your coverage won’t begin until July 1 and you could face late enrollment penalties.
Medicare Part D Penalty
There is a late penalty premium for not joining a Medicare Part D drug plan when you first become eligible for Medicare. Generally, you are late if you did not join within three months after your Medicare Part A or Part B becomes effective. The penalty premium is added onto the regular premium that you pay to your Medicare drug plan.
You may not have to pay the penalty if you qualify for a Special Enrollment Period (SEP) because you had other drug coverage that is as good as Medicare (creditable coverage) at the time you turned 65. Check to see if the health coverage you have (example: coverage through your job or spouse or Veterans Administration) includes drug coverage that is "credible."
Mistake #4: You Don’t Enroll In Part B Because You Have COBRA Or Retiree Coverage
In most cases, Medicare is the primary payer once you turn 65. If you leave your job and still have health insurance through COBRA or as part of a Corporate Retirement plan, these plans pay second. These types of employer-related coverage aren’t considered primary coverage after you turn 65.
If you have these types of coverage, you will not be eligible for a SEP when it ends. This means that they don’t meet the mandatory health coverage requirements to qualify for a Medicare Special Enrollment Period.
If you fail to enroll in Medicare Part B during your Initial Enrollment Period, you’ll have to wait until general enrollment (January 1st to March 31) to apply. Coverage will start July 1st, which means you may not have health insurance for some time.
To avoid gaps in your health insurance coverage and the lifetime Part B late enrollment penalty, make sure you enroll on time.
Mistake #5: You Assume Traditional Medicare Covers Your Prescription Drugs
To have comprehensive prescription drug coverage to complement Traditional Medicare (Original Medicare), you need to purchase a standalone Part D Prescription Drug Plan from a private insurance company.
Mistake #6: You Don’t Account For Out-of-Pocket Costs
While there are many services included in Traditional Medicare coverage, not every health care cost is covered. Make sure you account for your share of out-of-pocket health insurance costs, including premiums, coinsurance, copayments, deductibles and services not covered by Medicare.
Another common mistake people make is assuming that Traditional Medicare covers other health services like dental, vision, hearing needs or long-term care – this is NOT the case.
Mistake #7: You’re Confusing Medicare Advantage with Medigap
Medicare Advantage plans and Medicare Supplement Insurance plans (a.k.a. Medigap plans) are two very different entities. You can’t have a Medicare Supplemental plan along with a Medicare Advantage plan.
Medicare Supplement Insurance (Medigap plans) provides coverage for some of the out-of-pocket costs left by Traditional Medicare that are mentioned above, such as deductibles, copayments and coinsurance. There are standardized Medigap plans available in most states, so you can most likely find a plan that fits well with your unique health care needs. You are likely eligible for a Medigap plan if you are at least age 65 and are enrolled in Medicare Part B.
Medicare Advantage can be purchased as an alternative to Traditional Medicare. These private health plans include all of the same benefits as Part A and Part B and may include additional benefits (such as vision, hearing, dental services and prescription drug coverage). Medicare Advantage plans have their own out-of-pocket costs (deductibles, copayments and coinsurance).
Medicare Advantage plans are associated with a set network of doctors and hospitals. When choosing a Medicare Advantage plan, pay attention to its list of doctors and hospitals to make sure you can continue to go to the providers you know and trust.
Mistake #8: You Assume Your Medigap Plan Covers Both You and Your Spouse
Spouses cannot share the same individual Medigap plan and each must have separate policies. However, you might be able to qualify for a small discount if you and your spouse buy your Medigap policy from the same company. This will vary depending on the insurance provider; the insurance companies are not legally required to offer a spousal discount. Be sure to ask your plan provider about possible discounts when you enroll.
Mistake #9: Not Obtaining Medigap Insurance in a Timely Manner
The best time to buy a Medigap policy is within six months of enrolling in Medicare Part B. This period automatically starts the month you're 65 and enrolled in Medicare Part B.
If you purchase a Medigap policy sold in your state within six months of signing up for Medicare Part B, you cannot be rejected or charged extra based on a pre-existing medical condition.
Mistake #10: Letting Part D (Prescription Drug Plan) Renew Automatically
Each year you have the opportunity to review and switch your Part D plan. Keep in mind, plan costs and drug coverages can change each year. Compare plans in your area; check the costs for current medications to make sure you don’t pay more than you should for a plan. Open enrollment for Medicare prescription drug plan runs from October 15 through December 7, which is the perfect time to review all your options.
If you receive your prescription drug plan through a Medicare Advantage Plan, be sure to compare your plan options each year. You can switch your Medicare Advantage Plan to a different Medicare Advantage Plan during open enrollment, which runs from October 15 through December 7 every year.
Mistake #11: You Don’t Check To See If You Qualify For Assistance To Lower Your Medicare Costs
Medicare and its many expenses (copays, deductibles, premiums, prescription drug costs, etc.) can be difficult for many people to pay. Some of the financial assistance programs available to people with limited incomes and financial resources are listed below. Search “Medicare savings programs” on www.medicare.gov for eligibility details.
4 Kinds of Medicare Savings Programs
Qualified Medicare Beneficiary (QMP) Program helps pay for Part A premiums, Part B premiums, deductibles, coinsurance, and copayments
Specified Low-Income Medicare Beneficiary (SLMB) Program helps pay for Part B premiums only
Qualifying Individual (QI) Program helps pay for Part B premiums only
Qualified Disabled and Working Individual (QDWI) Program helps pay for Part A premiums only
Note: Generally, you don’t pay a premium for Part A if you or your spouse paid Medicare taxes for a certain amount of time while working. This is sometimes called “premium-free Part A. However, if you paid Medicare taxes less than 30 quarters, you will have to pay a premium for Part A, when you buy it. If you paid Medicare taxes for 30-39 quarters, you will have to pay a premium for Part A when you buy it.
Additionally, you can look into these programs:
PACE (Programs of All-Inclusive Care for the Elderly) is a Medicare/Medicaid Program that helps people meet their health care needs in the community
Extra Help Program can help Medicare holders lower prescription drug costs
Medicaid is a federal program that helps millions of Americans pay for their medical care costs.
Mistake #12: You Fail To Detect Medicare Billing Errors
Medicare billing errors can result in costly mistakes – for you. Billing errors are often innocent mistakes not intended to defraud the Medicare system. For example, a doctor may use the wrong medical code on a claim submitted to Medicare. Even though the service description sounds right, the wrong code could change how much you pay out-of-pocket.
When you receive the Explanation Benefits (EOB), remember to check the description of the service you received and note the medical codes as well as the total amount charged and paid, detailing the remaining costs for you to pay. If you believe the information is in error, contact your doctor immediately and have the billing specialist review and correct any issues.
Mistake #13: You Fall Victim To Medicare Fraud or Medicare Abuse
It’s against the law for someone who knows that you have Medicare to sell you an Exchange Plan. The Medicare open enrollment period is a time when there’s a higher risk of fraudulent activities.
Do NOT share your Medicare number or other personal information with anyone who contacts you uninvited to sell you a health plan.
Provide your Medicare card or claim number ONLY to your doctor or health care provider – NOT to anyone else.
It is fraud to submit a bill to Medicare for services you never received – to repeat – this is fraud and it’s punishable by law.
Be suspicious of providers who say that the more tests they perform, the cheaper it will be. Avoid providers who pressure you to buy high-priced medical services.
Educate yourself about what exactly your specific Medicare plan covers; be suspicious of anyone who claims that they can get Medicare to pay for services that are not covered by your plan.
Keep informed regarding your co-pays. Be wary of providers who routinely waive co-payments for services, unless that is what your Medicare plan covers. Be cautious of providers who charge you co-pays when your plan waives them.
A quick disclaimer: None of the information provided should be considered business, medical, legal, or financial advice. Always carefully consider all your options and do your own research.
Remember, keep abreast of Medicare updates check www.medicare.gov.
If you need help to decipher the Medicare maze, call Veronica Petta at Guiding Well-Being: 614 848 9687.