Top 10 Medicare Mistakes People Make at 65 and How to Avoid Them
Medicare is a complex and confusing system for many people who are eligible for it. There are many rules, options, deadlines, and costs to consider when enrolling in Medicare. If you are not careful, you could end up making some costly Medicare mistakes that could affect your health care and your finances for years to come.
In this blog post, we will discuss the top 10 Medicare mistakes people make at age 65 and how to avoid them.
1. Not signing up for Medicare when you turn 65
One of the most common and costly Medicare mistakes people make is not signing up for Medicare when they turn 65. If you are still working and have health insurance through your employer, you may think that you don’t need to enroll in Medicare. However, this is not always the case.
Depending on the size of your employer and the type of coverage you have, you may still need Medicare and should sign up for Part A (hospital insurance) sign up for Part B or enroll in part B (medical insurance) when you turn 65 or older. If you don’t, you could face a late enrollment penalty that will increase your Part B premium by 10% for each 8-month period that you could have had Part B but didn’t sign up. This penalty lasts for as long as you have Part B.
In order not to commit this error, you should check with your employer’s benefits administrator or your health insurance company to see if you need to enroll in Medicare when you turn 65.
2. Not choosing the right Medicare coverage for your needs
The second usual Medicare mistake people make is not choosing the right Medicare plan for their needs. There are two main ways to get Medicare coverage: Original Medicare (Part A and Part B) or a Medicare Advantage plan (Part C).
Original Medicare is the traditional fee-for-service program that covers most hospital and medical services, but not prescription drugs, dental, vision, or hearing care. You can also add a Part D plan (prescription drug coverage) and/or a Medigap policy (supplemental insurance) to Original Medicare to help pay for some of the out-of-pocket costs that Original Medicare does not cover.
Medicare Advantage plans are offered by private insurance companies that contract with Medicare to provide all of the benefits of Part A and Part B, plus additional benefits such as prescription drugs, dental, vision, hearing, and wellness programs. Some Medicare Advantage plans also have lower premiums, deductibles, and copayments than Original Medicare.
The best Medicare plan for you depends on your health care needs, preferences, budget, and location. You should compare the benefits, costs, networks, and quality ratings of different plans before making a decision. Although you need to sign up for Medicare, assess your needs before you enroll in part A,C,or D.
3. Not reviewing your Medicare plan every year
Failure to review your Medicare plan every year is another costly mistake individuals make. Your healthcare needs and preferences may change over time, as well as the benefits, costs, networks, and quality ratings of different plans. If you don’t review your plan every year, you could end up paying more than you need to or missing out on better coverage options.
,You should review your plan every year during the Annual Enrollment Period (AEP), which runs from October 15 to December 7. During this time, you can switch from Original Medicare to a Medicare Advantage plan or vice versa, change your Part D plan or Medigap policy, or enroll in a new plan if you are eligible. You can also make changes to your plan during other special enrollment periods if you qualify for them.
To review your plan every year, you should check your Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) documents that your plan sends you in September or October. These documents will tell you about any changes in your plan’s benefits, costs, networks, and quality ratings for the next year.
4. Not enrolling in a Part D prescription drug Plan when you are first eligible
One of the main disastrous mistake people commit is not enrolling in Part D prescription drug coverage or a Medigap policy when they are first eligible. Part D plans provide prescription drug coverage, which is not included in Original Medicare. Medigap policies provide supplemental insurance, which helps pay for some of the out-of-pocket costs that Original Medicare does not cover, such as deductibles, coinsurance, and copayments.
If you don’t enroll in a Part D plan or a Medigap policy when you are first eligible, you could face a late enrollment penalty that will increase your premium for as long as you have the plan. You could also have a limited choice of plans or be denied coverage altogether if you have pre-existing health conditions.
To correct this anomaly, you should enroll in a Part D plan or a Medigap policy when you first enroll in Medicare Part B, which is usually when you turn 65. This is called your Initial Enrollment Period (IEP), and it lasts for seven months, starting three months before the month you turn 65 and ending three months after the month you turn 65. If you enroll in a Part D plan or a Medigap policy during this time, you will not have to pay a penalty or undergo medical underwriting.
5. Not checking Prescription drug Coverage by your Part D plan or your Medicare Advantage plan
A major miscalculation people do is not checking if their drugs are covered by their Part D plan or their Medicare Advantage plan. Each plan has its own list of covered drugs, called a formulary, which may change from year to year. If your drugs are not covered by your plan, you may have to pay the full cost of them out of pocket or switch to a different drug that is covered by your plan.
You should check your plan’s formulary every year to see if your drugs are still covered and at what cost. You should also check if there are any restrictions on your drugs, such as prior authorization, quantity limits, or step therapy.
6. Not using the preventive services that Medicare covers
Another costly Medicare mistake people make is not using the preventive services that Medicare covers. Preventive services are health care services that help prevent or detect illnesses and diseases before they become serious. Some examples of preventive services that Medicare covers are annual wellness visits, flu shots, mammograms, colonoscopies, and diabetes screenings.
Using preventive services can help you stay healthy and avoid more expensive and complicated treatments in the future. They can also help you save money on your Medicare costs, as most preventive services are covered by Medicare at no cost to you if you meet certain criteria.
To right this wrong, you should use the preventive services that Medicare covers as recommended by your doctor or health care provider.
7. Not applying for programs that can help lower your Medicare costs
Another notable Medicare mistake people make is not applying for programs that can help lower their Medicare costs. There are several programs that can help low-income and disabled Medicare beneficiaries pay for some or all of their premiums, deductibles, coinsurance, copayments, and prescription drug costs. Some examples of these programs are:
- The Medicare Savings Program (MSP), which helps pay for Part A and Part B premiums and may also pay for some of the out-of-pocket costs of Original Medicare.
- The Extra Help program, which helps pay for Part D premiums and prescription drug costs.
- The State Pharmaceutical Assistance Program (SPAP), which helps pay for prescription drug costs in some states.
- The Medicaid program, which helps pay for health care costs for people with low income and limited assets.
To avoid this mistake, you should apply for any programs that you may qualify for based on your income, assets, and health status.
8. Not knowing when and how to switch plans
Another frequent Medicare mistake people make is not knowing when and how to switch plans. As we mentioned earlier, you should review your plan every year during the Annual Enrollment Period (AEP), which runs from
October 15 to December 7. During this time, you can switch from Original Medicare to a Medicare Advantage plan or vice versa, change your Part D plan or Medigap policy, or enroll in a new plan if you are eligible.
However, there are other times and reasons that you may want or need to switch plans, such as:
- You move to a new area that is not covered by your current plan or has different plan options.
- You lose your current coverage due to retirement, divorce, or other life events.
- You become eligible for a different program that can help lower your Medicare costs, such as Medicaid or Extra Help.
- You are unhappy with your current plan’s benefits, costs, networks, or quality ratings.
In these cases, you may qualify for a Special Enrollment Period (SEP), which allows you to switch plans outside of the AEP. The length and timing of the SEP depends on the reason and circumstance that triggers it.
9. Not understanding what Medicare does and does not cover
One of the top common Medicare mistakes involves not understanding what Medicare does and does not cover. Medicare covers most hospital and medical services that are medically necessary and reasonable, but it does not cover everything. Some examples of services that Medicare does not cover are:
- Long-term care, such as nursing home care or assisted living facilities.
- Routine dental care, such as cleanings, fillings, crowns, or dentures.
- Routine vision care, such as eye exams, glasses, or contacts.
- Routine hearing care, such as hearing exams, hearing aids, or cochlear implants.
- Cosmetic surgery, such as face lifts, breast implants, or liposuction.
- Alternative medicine, such as acupuncture, chiropractic care, or naturopathy.
If you need or want any of these services, you will have to pay for them out of pocket or get additional coverage from another source, such as a Part D plan, a Medigap policy, a Medicare Advantage plan, or a private insurance company.
To steer clear of this mistake, you should read your Medicare Summary Notice (MSN), which is a statement that shows all of the services and supplies that were billed to Medicare during a three-month period. It also shows what Medicare paid and what you may owe.
10. Not appealing a denied claim or service
Not appealing a denied claim or service is one of the top 10 Medicare mistakes to avoid. Sometimes, Medicare or your plan may deny a claim or service that you think should be covered. This could happen for various reasons, such as:
- The claim or service was not coded correctly by the provider or the plan.
- The claim or service was not medically necessary or reasonable according to Medicare’s standards.
- The claim or service was not authorized by the provider or the plan in advance.
- The claim or service was not provided by a network provider in your plan.
If this happens to you, you have the right to appeal the decision and ask for a review. You may be able to get the claim or service approved and paid for if you can show that it was appropriate and necessary for your condition.
To keep away from this mistake, you should follow the steps and deadlines for appealing a denied claim or service.
How does Medicare work if I am still working when I turn age 65?
If you are still working when you turn 65 and have health insurance through your employer or your spouse’s employer, you may not need to enroll in Medicare right away. However, there are some important factors to consider before you delay Medicare:
- The size of your employer. If your employer has 20 or more employees, your employer’s insurance will be primary and Medicare will be secondary. This means that your employer’s insurance will pay first for the services that both plans cover, and Medicare will pay second for any remaining costs. In this case, you may not need to enroll in Part B until you stop working or lose your employer’s coverage. However, if your employer has fewer than 20 employees, Medicare will be primary and your employer’s insurance will be secondary. This means that Medicare will pay first for the services that both plans cover, and your employer’s insurance will pay second for any remaining costs. In this case, you should enroll in Part B when you turn 65 to avoid late penalties and gaps in coverage.
- The type of your employer’s insurance. If your employer offers a high-deductible health plan with a health savings account (HSA), you should be aware that enrolling in any part of Medicare will make you ineligible to contribute to your HSA. You may want to delay enrolling in Medicare until you stop working or stop contributing to your HSA. However, if your employer offers a traditional health plan or a retiree health plan, enrolling in Medicare may not affect your eligibility or benefits.
- The cost of your employer’s insurance versus Medicare. Depending on the premiums, deductibles, copays, coinsurance, and benefits of your employer’s insurance and Medicare, you may find one option more affordable or comprehensive than another. You should compare the costs and benefits of both plans before deciding whether to enroll in or delay Medicare.
Medicare is a valuable and important program that provides health care coverage for millions of Americans. However, it can also be complicated and confusing, and it can be easy to make mistakes that could cost you money and affect your health care quality. By avoiding the 10 common and costly Medicare mistakes we discussed in this blog post, you can make the most of your Medicare benefits and enjoy a healthy and happy retirement.