Medicare is the nation’s health care program for citizens age 65 years and up, and it covers many major medical expenses for participants. But choosing the right Medicare plan can be confusing in many cases, and it may be difficult to decipher all of the language that is written into these plans and options.
Here are some potential mistakes to avoid when you choose your plan, so that you end up with the coverage that you need. (For further reading, see: Medicare 101: Do You Need All 4 Parts?)
- Not enrolling during your enrollment window: This can be one of the biggest mistakes that you can make with Medicare. If you are receiving Social Security when you turn 65, then you will be automatically enrolled and have the premiums deducted from your monthly benefits. But if you have delayed taking Social Security until a later age, then you will have to manually enroll when you turn 65. The enrollment period begins three months before the month in which you turn 65 and lasts for three months after that. You do not have to sign up if you are still covered under a health insurance policy from your job. (COBRA coverage and coverage from a former employer where you still pay the premiums don’t count for this.) Once you quit working, you have eight months in which to sign up. And if you work for a company with fewer than 20 employees, then you may be required to sign up even if you have current coverage with the company. You can also delay signing up if you have current coverage through a younger spouse’s plan. But failure to sign up within the prescribed window can result in surcharges on your future premiums and potential gaps in your coverage. (For more, see: Medigap vs. Medicare Advantage: Which Is Better?)
- Assume your spouse is covered: Medicare coverage applies only on an individual basis. Just because you have coverage does not mean that your spouse is also covered. He or she also has to have paid his or her dues in the workforce for at least 10 years in order to qualify for Part A. If your spouse is not yet 65, then he or she will have to find coverage elsewhere, such as with their employer or through COBRA or a policy that is sold on the exchange. It does not matter whether your spouse is receiving spousal Social Security benefits.
- Not purchasing enough coverage: While Medicare Part A is free, Parts B, C and D all require a monthly premium. Most people should probably get at least Part B, so that they have coverage for doctor’s visits and outpatient care. The standard premium of $121.80 can be deducted from your monthly Social Security benefit. But Parts C and D can also provide important coverage for things like dental, vision and prescription drugs. You can also opt for a Medicare Advantage policy that helps to defray these costs. The average premium for this type of coverage will run you about $32.60 in 2016. And a Medigap insurance policy can help you to pay for things that are not covered elsewhere, like coinsurance, copays and deductibles.
- Not seeking assistance if you can’t afford the premiums: If your income is low enough that you will have trouble affording the premiums, your state or local department of social services may have programs available for those who financially qualify. (For more, see: Getting Through the Medicare Part D Maze.)
The Bottom Line
Medicare is a complex program that has many parts and options to choose from. Don’t hesitate to seek professional guidance from a qualified financial advisor who has been trained in this area to help you if you need it. For more information on Medicare, visit www.medicare.gov. (For further reading, see: How Does Medicare Work After Retirement?)