Don’t Make One of These Common Medicare Mistakes!

The whole process of switching from your employer plan or private insurance to Medicare is fraught with potential costly mistakes. Misconceptions can leave you without much needed insurance. Failure to take the essential steps on time can leave you in the jaws of lifelong penalties.

After working in the Medicare industry for over 20 years, I see the same common goofs over and over, ones that cost people an arm and a leg. That is why I feel it is necessary to address them. Hopefully, this post will keep you on the straight and narrow, avoiding the misconceptions and missteps so many fall prey to.

Without further ado, let’s dive right in!

1. Not Signing Up For Medicare When You Turn 65

“I’ll take care of that Medicare enrollment stuff later.”

Don’t procrastinate when it comes to Medicare planning. A couple weeks can easily turn into a couple months and then, next thing you know, it is a year or more later and you’ve missed the Initial Enrollment Period (the 7-month period surrounding your 65^th birthday month).

It doesn’t seem like a big deal until you look at the penalties. Let’s just take a look at the Part B penalty alone, which is a 10% premium increase for every year you could’ve had Part B but didn’t sign up. This doesn’t sound like a lot, but if you are one year late and live another 20 years (a rough life expectancy estimate), you can easily pay over $3,000 in penalties. This is definitely a mistake you want to avoid!

2. Not Signing Up For Part B Because of Retiree Insurance or COBRA

“Why would I want to pay for Part B if my retiree insurance provides my coverage?”

While it is true that you can delay Part B if you have coverage through active employment, retiree insurance and COBRA don’t count. If you aren’t continuing to work past 65, you can’t delay Part B. Period.

If you do choose to delay, check the Part B penalties in the above section. They will apply to you, and they aren’t good!

3. Getting on the Same Drug Plan as Your Husband or Wife

“We’ve got matching tattoos, matching drug plans, and a joint Facebook account.”

You can get matching tattoos, and although I question the joint Facebook account, I can let that slide too. But you absolutely can’t get matching drug plans, even if your husband or wife’s plan is low premium.

Why?

Because every drug plan is different. They each have different preferred pharmacies, different copays, and—this is the important one—they cover different drugs at varying rates. So, even though it might seem convenient to get on the same plan, your drugs may not be covered by his or her plan. This may not be a big deal for a simple blood pressure medication, but prescription drugs are often expensive. Leave the wrong drug uncovered, and it could break the bank and shrink the nest egg.

4. Not Getting on a Part D Drug Plan at All

“I’m not on any expensive medications right now, why do I need one?”

The key words in that quote are “right” and “now.” You may be able to get your prescriptions for a small copay now, but—as I said before—what are you going to do if a drug costs $400 or much more a month? If you wait, you will still be able to get on a plan outside of your Initial Enrollment Period (IEP), but not without a Medicare Part D late enrollment penalty. And, since you can only make changes to your Medicare health insurance plans during the Annual Enrollment Period (October 15- December 7), you will have to pay for your expensive drugs out-of-pocket until that time.

5. Thinking Original Medicare Alone (Parts A and B) Will Cover All Your Health Insurance Needs

“Medicare is all inclusive, right?”

Medicare provides good coverage, but it doesn’t cover everything. Extended hospital stays, some skilled nursing care, 20% coinsurance on all outpatient services are just a few of the bigger expenses that will be left up to you. Other smaller ones include vision, dental, or hearing aids. Although I wouldn’t worry about those last three small ones, the bigger ones can be potentially disastrous. Why? Because there is no out-of-pocket maximum in Medicare. No matter how high the out-of-pocket expenses get, you are still on the hook.

That is why you need to get something to supplement Medicare alone. You don’t need to pay out the nose to get the most comprehensive coverage, but you can’t leave yourself vulnerable. You have lots of options from plans that cover almost everything to $0 per month Advantage plans that—although are often a hassle—do cap out your out-of-pocket spending at $4-6,000 per year.

6. Accidentally Missing the Medicare Supplement Open Enrollment Period or Your Initial Enrollment Period for Advantage Plans

“Oops…”

The time to buy a Medicare Supplement is during your open enrollment period, a 6-month period that starts when you turn 65 and enroll in Medicare Part B.

The time to buy an Advantage Plan is during your Initial Enrollment Period, a 7-month period that begins 3-months before your 65^th birthday month.

You can get on an Advantage Plan during the Annual Enrollment Period (October 15- December 7) if you miss the deadlines, but that can be problem if you need the insurance right away. What if you’ve got some big- ticket medical expenses before the end of the year?

And, with Medicare Supplements, although you can try to get on one anytime of year, there is no guarantee you can get one at all. You will have to undergo medical underwriting, and—if you don’t meet their requirements—they will deny you coverage. Now, you don’t have to be in perfect health to meet these requirements, but for some the underwriting can be a real problem.

7. Trying to Do It All Alone

“This can’t be too hard, can it?”

Let’s face it: Medicare is complicated. It is a convoluted government program serving over 50 billion beneficiaries. There are lots of deadlines and rules—as you can see—many opportunities for blunders. At Seniormark, we’ve seen people baffled by Medicare again and again, even people who’ve spent their entire lives in the health care industry! You should definitely educate yourself so you understand your options and don’t get taken advantage of, but at the end of the day, don’t do it all by yourself!  Sit down with a professional who will help ensure you aren’t making any mistakes!

Don’t do it alone this Annual Enrollment Season!

We can sit down with you and guide you through the whole process. Call Seniormark at 937-492-8800 or click here for a free consultation!

About the Author

Dan Hoelscher

Dan Hoelscher founded Seniormark in 2007 in an effort to help individuals make a successful transition into retirement. Dan is a Certified Financial Planner™ Practitioner and holds Certified Senior Advisor (CSA)© and Certified Kingdom Advisor™ certifications. Since founding Seniormark, Dan has helped thousands of retirees throughout Ohio.