If you have looked into Medicare to see about getting covered, you know how complex it can be. You may be confused about late penalties, lack of coverage and which plans are best for you, for starters.
Jeanie Hummer, admissions supervisor at Masonic Village at Elizabethtown, encourages people to find experts to help you understand this complexity: “When you retire, you have to pick several plans to gain the coverage needed. It can be overwhelming. A solution is to locate a health insurance broker in your area who can review all the available plans with you and help you choose the best one.”
There is a lot of information available about the different aspects of Medicare and how to navigate the system, but it’s always good to know specific pitfalls to watch out for as you become eligible for coverage. Here are certain mistakes that you won’t want to make:
Not signing up when you turn 65. If you are retired and are not covered by a health care plan through your spouse’s employer, you should sign up for Medicare. If you delay, late penalties will be added to your premiums when you eventually sign up, making month-to-month costs higher.
Accruing penalties. Each of the four parts of Medicare have their own rules about and penalties charged depending on when you need to sign up. The penalty for not signing up for Part A is 10% added to your monthly premium for twice the number of years you delayed signing up.
The penalty for delaying Part B is less forgiving, and is usually 10% added to your monthly premium for as long as you have Medicare. Part D also has a penalty that is generally 1% added to your Part D premium for every month that you go without prescription drug coverage after age 65. Usually, this penalty doesn’t add up to very much unless you wait more than a year, since most Part D premiums are pretty low to begin with.
Why are there penalties? They were set up to help even out expenses for everyone covered. The reasoning goes that if there weren’t penalties for signing up late, everyone would wait until they actually needed medical care to sign up. This would increase prices for premiums because there would be a smaller pool of payers, while also having a much larger percentage of them using up funds from the pool.
Having unintentional lapses in coverage. Medical providers aren’t always covered year-to-year under the same Medicare Advantage plan (Part C). It will be important to call your doctor and insurer annually to make sure they will be covered for the next year through your current plan. If you need to, you can switch Medicare Advantage plans during open enrollment each year from Oct. 15 to Dec. 7.
All the parts of Medicare can seem like a lot to manage. Jeanie notes the difference between employer insurance and Medicare: “When working, we are used to having one health insurance plan through an employer. When you retire, if Medicare coverage (Parts A and B) are your first choice for coverage, you then need to pick a Medigap plan to assist in picking up the 20% not covered by Medicare, plus a drug plan (Medicare Part D) to be fully covered.”
Not planning for two. It’s important to remember that Medicare does not operate like employer insurance, and thus cannot cover you and your spouse under a single policy. Both of you will need to enroll in individual policies to be covered. But if one of you is still employed, their employer insurance can still cover the other, postponing the need to sign up for Medicare right away. After both of you are no longer covered through employer insurance, you have eight months to sign up for Medicare to avoid penalties.
