Medicare can be confusing, but mistakes could cost you thousands of dollars or a lifetime of penalties. Here are some of the most common Medicare errors to avoid at all costs.
You can use your initial enrollment period when you first enroll in original Medicare or a Medicare Advantage plan to avoid enrollment penalties. Don’t make the following mistakes during open enrollment or throughout the year:
1. Not Enrolling in Part B
If you are still working and have employer or union group health coverage, you may not be tempted to sign up for Medicare Part B during the initial enrollment period. However, it is generally in your best interest to enroll as soon as you can.
You will pay a penalty for every 12-month period that you were eligible for Part B but didn’t enroll. The penalty is calculated by multiplying the national base beneficiary premium by 1% and adding this amount to your monthly Part B premium.
Most people don’t have to pay a Part B late enrollment penalty if they or their spouse paid Medicare taxes during their working years and qualify for premium-free Part A. However, there are a few exceptions. These penalties last for life, so it’s important to avoid them.
2. Not Enrolling in Part D
Unlike Parts A and B, which are run by the federal government, Part D is a private insurance plan that’s regulated and subsidized by Medicare, but sold by private insurance companies under one-year, annual contracts.
Beneficiaries must enroll in Part D during their initial enrollment period, which starts three months before the month they turn 65 and ends three months after. If they miss this deadline, they could face a late enrollment penalty.
Beneficiaries can avoid a Part D penalty by keeping the records showing they had creditable coverage from other sources (such as an employer or union plan, TRICARE, Indian Health Service and the Department of Veterans Affairs). They also have the option to use special enrollment periods to change plans outside of the AEP, ICEP and MADP, but these are granted on a case-by-case basis.
3. Not Enrolling in a Medicare Advantage Plan
Medicare Advantage plans are offered by private insurance companies. The enrollment process is very similar to buying any other health coverage.
Medicare Advantage is a popular option because they often provide extra benefits such as vision, dental, hearing and prescription drug coverage. These extra benefits help to reduce your out-of-pocket medical costs.
However, many seniors are not aware that they must enroll in a Medicare Advantage Plan during their OEP or risk lifetime penalties. Medicare Advantage providers group their patients into risk pools to spread the cost of care. Those who miss the OEP can pay higher premiums or receive limited coverage in the future.
Depending on your circumstances, you may be able to join or switch a Medicare Advantage plan during a Special Enrollment Period. These SEPs can occur when:
4. Not Enrolling in a Medicare Supplement Plan
The Medicare program is confusing, and mistakes can be costly. It is important to understand the rules and enroll in the best coverage for your situation.
It’s easy to get caught up in the hype of television commercials or mailers promoting Medicare Advantage plans, which often come with extra benefits like meals, transportation, private home aides, and bathroom safety equipment. However, these plans are not the same as original Medicare and will only cover limited medical expenses.
If you want full Medicare benefits, you should choose a Medicare Supplement Plan during your OEP. During this period, you have guaranteed-issue rights, meaning that you can’t be rejected or charged more based on health problems. Your OEP is the seven months around your 65th birthday. It’s a one-time opportunity that is unique to you. Before then, make sure to do your research on aetna plan g and other similar plans.
5. Not Enrolling in a Medicare Prescription Drug Plan
Both Original Medicare and Medicare Supplement Insurance plans leave a gap in coverage for prescription drugs, which is why it is important to enroll in a separate Part D plan. Medicare Part D plans are available through private companies and provide drug coverage in addition to Medicare Part A and B. You should enroll in a Medicare Part D plan when you are first eligible for it, because late penalties begin at 63 days without creditable drug coverage*.
During each fall’s Annual Enrollment Period, you should review your current plan’s Annual Notice of Change (ANOC) and overall Evidence of Coverage to determine if your current Medicare Part D plan has a formulary that covers all of your medications. Medications that aren’t on your plan’s list of covered drugs may be subject to extra co-pays or out-of-pocket costs.
6. Not Enrolling in a Medicare Dental Plan
Dental coverage is an increasingly important part of Medicare’s benefits package. But while virtually all Medicare Advantage plans offer dental coverage (and a premium to pay for it) and most enrollees have access to preventive services such as oral exams, cleanings and fluoride treatment, many of those plans impose cost sharing on more extensive dental care services and the vast majority of those that do have annual dollar limits on those more extensive services (the average limit was $1,300 in 2021).
Beneficiaries need to understand these limitations so they can make an informed choice. And they can also consider a health savings account that lets them withdraw money tax free for eligible expenses, including dental costs. This can be particularly beneficial if you are already paying a high-deductible health insurance plan. Doctors that choose to opt out of Medicare can enter into private contracts with Medicare beneficiaries instead and may charge lower fees for routine dental procedures.
7. Not Enrolling in a Medicare Vision Plan
Medicare can be confusing, which is why it is essential for beneficiaries to educate themselves on the federal healthcare program. This education is important because it can help them avoid costly mistakes.
Medicare Advantage plans, which are offered by private insurance companies, often include vision coverage as part of their benefits. This is in addition to the coverage they offer for Original Medicare Parts A and B.
To get the most out of Medicare, beneficiaries must enroll during what is called their open enrollment period. This period begins three months before your 65th birthday and ends three months after it. If you miss this window, you may have to pay a penalty for the rest of your life. AARP offers a free Medicare Checkup to help beneficiaries understand the process and avoid any penalties. To learn more, visit AARP’s website.
8. Not Enrolling in a Medicare Hearing Plan
There’s no disputing that Medicare particulars can be extremely complicated and, quite frankly, overwhelming. But, when it comes to choosing a Medicare Supplement Plan, it really boils down to two things: cost and coverage.
While Original Medicare Parts A and B do not include hearing aids or the exams that fit them, some Medicare Advantage plans do. And, if you’re enrolled in one and need to change plans during open enrollment, be sure to ask if your new plan will cover your hearing needs.
eHealth’s Medicare related content is compliant with CMS regulations. We help seniors avoid costly mistakes when navigating the Medicare maze. Learn more about our Compliance Program.
9. Not Enrolling in a Medicare Supplement Plan
Medicare Supplement Plans are private insurance that help pay the gaps in coverage left by Original Medicare. They are often referred to as “Medigap.” These plans are standardized, meaning that every plan has the same basic benefits and is available from every company offering it. The only difference is the price, or premium, that each company charges for the same policy.
It is important to enroll in a Medicare Supplement Plan during your six-month Medigap open enrollment period, which begins the month you turn 65 and are enrolled in Part B. During this period, you can purchase any of the standardized Medicare Supplement plans without being turned down due to health underwriting. It’s helpful to get advice from a trusted source when picking a Medicare Supplement Plan. Here are some sources to consider: eHealth, your local Department of Aging, and a licensed insurance counselor.
10. Not Enrolling in a Medicare Advantage Plan
A Medicare Advantage Plan is a managed care plan that offers a choice of benefits, including prescription drug coverage. Medicare Advantage plans also offer extras like vision, hearing and dental.
When people first enroll in Medicare, they can choose whether to sign up for a Medicare Advantage plan or Original Medicare Parts A and B. They can also add or change their Medicare Advantage plan during the annual Medicare Advantage open enrollment period, which runs from October 15 to December 7 each year.
Many seniors use this eight-month SEP to enroll in Medicare Advantage plans after losing their job-based insurance or turning 65. It is important for them to understand that they only have this option once per year during the Medicare Advantage open enrollment period. If they miss it, they will need to wait until the next open enrollment period to enroll.
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