It is important to know that enrolling in Medicare is only the first step of getting your benefits to cover your health care costs. Should you not enroll when you are first eligible it could cost you more in years to come.
You must play an active role in learning about Medicare’s enrollment rules and guidelines. This article will help guide you on how to do so and keep your costs to a minimal.
The following list is some of the other common mistakes that could be quite costly later.
Failure to Enroll at the Right Time
People that are already on Social Security or Railroad Retirement benefits are automatically enrolled in Medicare. However, if you are not already signed up for these income benefits, you will need to enroll at your initial enrollment period to avoid late enrollment premium costs and future penalties.
You have a seven-month window of opportunity to enroll, which is three months before your 65th birthday, the month of your birthday, and the three months after your birthday.
People often ask us: is Medicare Part B mandatory? The answer depends on whether you are still working and how large your employer is.
If you will have no other health coverage or if you have retiree coverage from a former employer, be sure to enroll in both A and B during your initial enrollment period.
People who work for small employers with less than 20 employees must also enroll in both A and B to avoid late penalties.
If you are employed and have group coverage at age 65 from a company with more than 20 employees, you can delay enrollment into Medicare until you retire.
Choosing Coverage that Doesn’t Fit You
Medicare doesn’t cover everything so most individuals will enroll in one of two types of gap coverage. You will want to evaluate your own health care needs and usage to choose the right plan for you.
You can enroll in Traditional Medicare, which includes Part A and B and choose a Medicare Supplement and Part D policy. Or you could enroll in a Medicare Advantage plan, which often includes a built in Part D plan.
To clarify the differences, a Medicare Supplement is extra coverage that can help cover deductibles and coinsurance that Medicare doesn’t cover. There are many different insurance carriers that offer Medicare Supplement plans, ranging in premiums.
However, Medicare standardized the plans so that you can compare them easily between insurance companies. This coverage offers you the freedom of choosing your own doctor or specialist that accepts Medicare. You also have the option to purchase a Part D prescription drug plan to along with your Medicare Supplement. Both options do require a monthly premium.
Medicare Advantage plans are basically private network plans. You must see doctors in their network whenever possible and you may need to get a referral to see a specialist. However, these plans are less costly and do typically have a Part D plan included.
You have the option of switching plans once a year so you aren’t stuck forever if you choose unwisely However, with Medicare supplements plans you may have to answer health questions to get the coverage if you apply any time after your first 6 months on Medicare Part B.
Keep that in mind when you are thinking about these plans because once you develop a serious health condition, you might not be eligible for a Medigap plan.
Not Shopping your Part D Plan Every Year
You can change your Part D prescription plan annually between October 15 and December 7th. It is advised that you re-evaluate your plan choice each year depending on the medications you currently take.
You will want to compare plans to make sure you are getting the best plan for your medication needs. You will also have the option during this timeframe to change Medicare Advantage plans as well.
Not Considering Your Spouse
Something important to be aware of is that Medigap plans and part D plans are individual coverage. So, you cannot get a single policy that covers both you and your spouse.
If your spouse is younger than you and can’t get on Medicare or a Medigap plan they will need to obtain coverage independently. Think about this carefully before leaving an employer group health plan if you are carrying your spouse there as a dependent.
There are individual health insurance plans available through the Healthcare exchange, but these can be costly so do your research ahead of time.
Skipping Part B When You Have COBRA
If you decide to work past age 65 and then later elect COBRA, you will need to enroll in Part B within 8 months of your last day of work. These plans pay after Medicare so that means Medicare is primary. If you fail to enroll in Part B, you are now missing a part of your primary coverage.
Additionally, if you fail to enroll in Medicare during your 7-month initial enrollment window, you must wait until the next general enrollment window, which occurs annually between January 1st to March 31st, to apply. Your benefits wouldn’t begin until the following July, leaving you without coverage for many months.
So just remember that although your COBRA benefits may run for 18 months, you only have 8 months from your last day of work to sign up for Part B.
Knowing about these common errors ahead of time will help you to avoid making some of the same mistakes that other beneficiaries have made in the past. This will ensure that you have smooth sailing for your own enrollment.