Medicare Mistakes to Avoid – The Top 4 Costly Errors Made By Seniors

Medicare Mistakes to Avoid

Trying to understand the various aspects of Medicare can be confusing. Here are some of the top Medicare mistakes we see seniors make, and how to avoid them:

1. Not picking the right Medicare Supplement policy when you first enroll.

If you buy a Medicare supplement plan within six months of enrolling in Medicare Part B, you can chose any plan in your area without answering any health questions.  But if you try to switch plans after that, insurers can reject you because of certain pre-existing conditions.

It’s important to pick your plan carefully. Additionally, since Plans A-N are standardized, insurance carriers MUST offer the same benefits by law for each lettered plan – but the rates can vary greatly among carriers. Because of this, it is smart to “shop around”, and make sure you are getting the best rate for the plan you choose. Additionally, when carriers administor rate increases, that increase will typically be a percentage of your monthly premium — so starting with a low premium will result in lower rate increases over the life of your policy. Working with a licensed Medicare insurance broker is completely free of charge, and can help you avoid picking the wrong plan during your initial enrollment period. 

2. Keeping your Part D plan choice on autopilot.

Open enrollment for Medicare Part D and Medicare Advantage plans runs from October 15 to December 7 every year, and changes made go into effect on January 1st. Starting on October 1st, the new year’s plans are released, and this is a good time to review your current coverage. The cost and coverage for certain medications can vary a lot from year to year – some plans can increase their premiums, limit you to select pharmacies, change drug co-pays or even impose hurdles to obtain certain medications.  And if you’ve been prescribed new medications or your drugs have gone generic over the past year, a different plan may now be a better deal for you. Abt Insurance Agency offers a free Part D Drug Plan review each year for Medicare clients – or you can visit Medicare.gov to see the plan choices in your area.

3. Forgetting to sign up for Medicare at 65, even if you are not receiving Social Security benefits.

If you’re already receiving Social Security benefits, you’ll automatically be enrolled in Medicare Part A and Part B when you turn 65 (although you can turn down Part B coverage and sign up for it later). But if you aren’t receiving Social Security benefits, you’ll need to take action to sign up for Medicare. If you’re at least 64 years and 9 months old, you can sign up for Medicare online at Medicare.gov, or contact your local Social Security office. You have a seven-month window to sign up – this begins from three months before your 65th birthday month to three months afterward (you can enroll in Social Security later).

You may want to delay signing up for Part B if you or your spouse has coverage through your current employer. When you turn 65, Medicare is generally considered to be your primary insurance, and any other coverage you have is secondary, unless you or your spouse has insurance through a current employer with 20 or more employees. But the coverage must be with a current employer. Other employer-related coverage, such as retiree coverage, COBRA coverage, or severance benefits, is NOT considered to be primary coverage after you turn 65. That means if you don’t sign up for Medicare, you may have gaps in coverage and be subject to a lifetime late-enrollment penalty of 10% of the current Part B premium for every year you should have been enrolled in Part B but were not. You may also have to wait to get coverage: If you miss the window for enrolling when you turn 65 or eight months after you leave your job, you can only sign up for Medicare between January and March each year, with coverage starting on July 1.

Here’s an example:

Judy forgot to enroll in Medicare until after her 66th birthday. As a result, she must pay a penalty of $10.49 a month for Part B and $4.65 a month for Part D for the rest of her life. Ouch!

4. Not checking that your doctors, hospitals, and other providers are still covered by your Medicare Advantage plan each year.

If you choose to get your coverage through a private Medicare Advantage plan, which covers both medical expenses and prescription drugs, you usually need to use the plan’s network of doctors and hospitals to get the lowest co-payments (and some plans won’t cover out-of-network providers at all, except in an emergency). As with any PPO or HMO, it’s important to make sure your doctors, hospitals, and other providers are covered in your plan from year to year.

Additionally, Medicare Advantage Plan benefits can change each year, so it is important to review your plan’s benefits ( a copy of the following year’s benefits will be sent to policyholders in the Fall). You can switch Medicare Advantage plans during open enrollment each year from October 15 to December 7.

Stephanie Abt is the founder of the Abt Insurance Agency and specializes in helping seniors make informed decisions about their Medicare needs.

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