It’s that time of year, Medicare Open Enrollment is available again but you need to act fast as it ends December 7. Simply put, Medicare Open Enrollment is the period of time, once a year, when you can reevaluate the plan options you want. Knowing which plans options to choose is not so simple, as Medicare can be complicated. Unless you take the time to learn about Medicare’s various rules and deadlines, which is uncharted territory for many people, costly missteps and oversights can occur. (For related reading, see: The Costs of Medicare You Need to Know.)
To help protect yourself and your loved ones, make sure you are aware of the most common Medicare mistakes people make and how best to avoid them:
- Making Medicare decisions without a basic understanding of how all of Medicare – Part A, Part B, Part C, and Part D – works. Medicare.gov offers the booklet titled “Medicare and You”, and your state SHIIP (Senior Health Insurance Information Program) can help you learn the basics about Medicare.
- Using the sales pitch of just one insurance company or one sales person to make your Medicare decisions. Find an independent insurance agent who represents several companies. Make sure the agent shows you Medicare Advantage options and Medicare Supplement options.
- Paying a Part D late enrollment penalty for life because of failure to sign up for it when first eligible. If you are taking few or no prescription drugs, if may be best to sign up for the least expensive Part D plan now to avoid high penalties later.
- Paying the higher income beneficiary Part B and Part D surcharge IRMAA without trying to appeal it. Medicare uses your two prior years of tax returns to calculate IRMAA (Income-Related Monthly Adjustment Amount) and will consider appeals for reducing income.
- Assuming all Medicare enrollment decisions are limited to open enrollment season (October 15 to December 7). Special enrollment periods are available throughout the year if you move, have a change in life circumstances, and/or qualify for LIS (Low-Income Subsidy, also called "Extra Help"). Medicare supplements can be changed 365 days per year.
- Assuming Medicare and supplemental insurance pay for long-term care. Medicare pays very little for long-term care. Consider private long-term care insurance options.
- Veterans choosing Part D without considering obtaining their prescription drugs through the VA. If later you are not happy with the VA, Medicare considers VA “creditable coverage,” and you can avoid the Part D late enrollment penalty.
While these mistakes are the most common, there are hundreds of mistakes that can be made when planning for Medicare. Make sure to contact a licensed independent insurance agent or your state SHIIP office with any other questions or problems that arise. This is important, as a wrong decision can cost you in the long–run. (For related reading, see: It's Time to Review Your Medicare Policy Coverage.)