There is a misconception that nothing can go wrong if you sign up for Medicare. Hey, it’s run by the Federal government, right? You sign some forms and Uncle Sam takes care of everything and makes sure nothing goes wrong.
We’re not trying to worry you, but the fact is, there are a lot of mistakes you can make when you’re enrolling in Medicare. Just for starters, there are many different varieties of Medicare coverage, including Part A, Part B, Part C, and Part D and you need guidance to figure out which of them to enroll in. There are deadlines you should not miss. If you do, you could end up paying extra fees, or not getting the coverage you need the most, losing the ability to use the physicians you like the most – and worse.
But don’t worry. The information we will provide in this article will go a long way toward assuring that you will make the right decisions and be a happy Medicare user.
Medicare Myths, Facts, and Misconceptions
Medicare Is Free – False
People have probably subscribed to this misconception because they have heard about “premium-free” Medicare Advantage plans provided by private companies.
The fact is you are going to have to pay something to participate in Medicare Part B (Part A is free for most people) – this amount is paid whether or not you sign up to a “premium-free” plan. The 2023 premium is $164.90/month. In addition, if you have a higher income, you will have to pay more. The amount will be determined based on an income-related adjustment.
You won’t necessarily have to write a check every month to pay for those amounts. Bear in mind that if you are collecting Social Security, the government will deduct the fees for your Medicare coverage from your monthly Social Security payments. So even though you won’t have to write a check to pay for Original Medicare, you are paying for it all the same.
The Government Pays for Medicare and Health Care Costs When You Are Retired – False
Although Medicare is a terrific program, it will not pay for all your medical and health care costs and expenses. For a fuller explanation, see “Is Medicare Free” just above. To learn more about this topic, please read the following section.
Medicare Covers All Your Medical Expenses – False
There are plenty of medical costs that Original Medicare will not cover. A partial list includes:
- Most medical and mobility equipment that are installed in your home or used by you outside your home.
- Private nursing care.
- Transportation to and from medical caregivers and care facilities.
- Ongoing care in a skilled nursing facility.
- Meals on Wheels and other home delivery meal services.
- A private room in the hospital or a skilled nursing facility, unless medically necessary.
- Private nursing care.
- A television or telephone in your room, and personal items like razors or slipper socks, unless the hospital or skilled nursing facility provides these to all patients at no additional charge.
- The costs of staying as a long-term resident in a nursing home or assisted living facility.
- Custodial care, which means help with everyday activities such as dressing, feeding, bathing, going to the bathroom — or for your room or meals.
- Vision and dental care.
To get some of these listed costs covered, you will have to enroll in a Medicare Advantage policy that is offered by a private insurance company. But before you enroll in one of those plans, check carefully to be sure that the plan will provide coverage for what you need.
Medicare Is a Government-Run Program – True
Yes, this is true. But here again, there are complications because some forms of coverage you can buy, like Medicare Supplement and Medicare Advantage plans, which are offered not by the government, but by private insurance companies.
While you cannot obtain those privately offered plans from the government, they are regulated by the government to be sure they comply with applicable standards, laws, and norms. That’s confusing, right? But despite these “wrinkles,” Medicare is a program that is run by the U.S. government.
Medicaid Is the Same as Medicare – False
Medicare is a federal program that provides health coverage if you are 65+ or under 65 and have a disability. Medicaid is a federal program that is administered at the state level. Its purpose is to provide health coverage for individuals who have low incomes.
All Medicare Advantage Plans Are the Same – False
Medicare Advantage plans, which you buy from commercial insurance companies, vary considerably in what they cover. There are other differences too. Zero premium plans do not charge you a monthly fee, but you will have to pay for a larger percentage of the costs of medical services you receive. Other plans charge you a monthly premium but will require you to pay less for copays as you receive medical and healthcare services.
The bottom line is, avoid becoming a victim to companies that push you to buy plans that might cost too much, or that do not cover the cost of services you really need. (Why pay for services that you will hopefully never use?) As you can see, Medicare Advantage plans are complicated and have a lot of “moving parts.” So shop carefully and be sure to opt for a plan that best fits your needs. Chances are you will select the best plan if you work with an expert – a qualified Medicare consultant who can guide you.
Medicare Supplement Plans and Medigap Plans Are the Same – True
Medicare Supplement plans and Medigap plans are both forms of supplemental insurance that provide coverage to help fill “gaps” in Original Medicare that can include:
- Copayments for specialists
- Deductibles for coverage that is not provided by Original Medicare.
- Costs for hospital stays/service
Here are some caveats and limitations on these policies, according to Medicare.gov:
- To own a Medigap or Medicare Supplement policy, you must have Medicare Part A and Part B.
- A Medigap policy is different from a Medicare Advantage Plan. Those plans are alternative ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.
- You pay a private insurance company a monthly premium for your Medigap policy. You will pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medigap policy from an insurance company that’s licensed in your state to sell one.
- Any standardized Medigap policy is guaranteed renewable, even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you continue to pay the premium.
- Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2006, aren’t allowed to include prescription drug coverage. You will need to enroll in a separate Medicare Prescription Drug Plan (Part D). If you buy Medigap and a Medicare drug plan from the same company, you may need to make two separate premium payments. Contact the company to find out how to pay your premiums.
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan unless you’re switching back to Original Medicare.
Some Medicare Advantage Plans Have Zero Premium – True
This is true – there are Medicare Advantage plans that do not charge members a monthly fee. However, these plans require members to pay out of pocket a larger percentage of the medical costs they incur. A free plan, for example, could charge you $75.00 to see a specialist, while a plan with a monthly premium could cover that expense without requiring a copay.
Again, be sure to shop carefully and select a Medicare Advantage plan that best fits your healthcare needs and budget. Evaluate the plan to make sure you understand the potential future costs of coverage and what your true cost for healthcare will be.
Everyone Can Get Medicare – True
Medicare provides medical coverage for all people age 65 and older. Plus if you are younger than 65 and have a disability, you could qualify and join. To learn more, consult with a qualified Medicare advisor. However, remember that, in most situations, you must enroll at age 65.
Medicare Advantage Is the Best Coverage – True/False
Medicare Advantage plans offer good coverage and in general, the more you are able to pay (or plan for out-of-pocket expenses) for one of these policies, the better your coverage will be. However, determining the best coverage depends on your medical history (what you need to be covered) and how you like to get your care delivered.
Medigap/Medicare Supplement Provides Full Coverage for All Medical Needs – True
This is true but remember that only medical doctors and hospitals are covered. Dental and vision care are not.
I Only Need Medicare Part D If I Take Medication – False
Part D can be included in Medicare Advantage plans, but be sure to check the medications you require to be sure they are covered by the plan at the best prices. Drug coverage costs can vary based on the tier the drug is categorized in and where you live. If you’re on a Medicare Supplement plan, you will need a separate Part D plan to cover medicines.
All Medicare Part D Plans Cover All Drugs the Same Way – False
In fact, there are important differences in how competing Part D plans cover different medications. First of all, the amount of coverage can differ in different states, and you could even discover that the medication you most need will not be fully paid for in your state.
Then we come to the issue of tiers, which is the way that insurance companies classify drugs and how much you will be reimbursed for them. In general . . .
- Tier 1 drugs are generic and cost the least. Therefore, it is likely that your Part D plan will pay for them.
- Tier 2 drugs are also generic, but they cost more than Tier 1 drugs. You could find out that you can still save money with the plan you choose because it covers all or most of the cost of drugs in this category.
- Tier 3 “preferred” drugs are brand-name medications that don’t have generic equivalents. They cost more and there is a possibility that your Part D plan will not pay for them.
- Tier 4 drugs are high-priced brand-name drugs. You will find that most Part D plans will pay only about half their cost.
- Tier 5 drugs are in most cases brand-name drugs that are used to treat cancer and other serious conditions. In many cases, you will have to pay the full cost of them, even if you have a Part D plan.
Many people only learn that the drugs they need are not covered, or only partially covered when their care providers prescribe or recommend a drug for the first time. That is an unwelcome surprise. However, if you are already taking prescription drugs and are shopping for a new Part D plan, be sure to ask whether those drugs are covered, and how. If you plan ahead and ask the right questions, you could be able to save a lot of money on your prescriptions.
And here’s one more thing to think about. If you are using Tier 4 or Tier 5 drugs that are brand-name, there is a chance that they might become over-the-counter at some point in the future and that at that time, their price will drop. Again, bring a list of your medications when you are shopping for a new plan and ask a lot of questions about which of them are covered and which are not. If any of them are about to go generic, that will be a welcome surprise.
You’re Automatically Signed Up for Medicare When You Turn 65 – True/False
If you are enrolled or are enrolling for Social Security, then you will be automatically enrolled in Medicare. However, if you are not enrolled in Social Security, you must proactively sign up for Medicare.
You can do that during your Initial Enrollment Period (IEP), which starts three months before your 65th birthday, includes the month of your birth, and lasts for another three months. (That’s a seven-month IEP in all.)
Are there exceptions to this schedule? Yes. If you have certain physical or other limitations, you could qualify to sign up for Medicare before the seven-month IEP that surrounds your 65th birthday. Talk to a qualified Medicare consultant to learn more.
You Can Sign Up for Medicare Before You Turn 65 – True
As we noted just above, your Initial Enrollment Period (IEP) starts three months before your 65th birthday including the month of your birthday, and lasts for another three months. (That’s a seven-month IEP in all.)
There Is Only One Enrollment Period for Medicare – False
You can enroll in Medicare during one of these periods:
- Initial Enrollment Period – Most people can first enroll in Medicare (Part A, B, C and D) during a 7-month window: 3 months before the month they turn 65, the month they turn 65, and three months after the month they turn 65.
- Medicare Part C & D Annual Enrollment Period (AEP) – Between October 15 and December 7 every year, existing Medicare beneficiaries can use this period to re-evaluate and make changes to their Medicare Advantage (Part C) and Medicare prescription drug plans (Part D). But you cannot use AEP to enroll in Part A and/or Part B for the first time. If you enroll in a plan during AEP, coverage starts on January 1 of the following year.
- Special Enrollment Period (SEP) – You may qualify for a special period the enroll in Medicare based on certain life events such as you change residence or lose current coverage. Depending on your circumstance, you generally will have two full months to enroll.
- Medicare General Enrollment Period (GEP) – January 1 to March 31, every year. Most people will enroll in Medicare Part B coverage when they first sign up for Medicare. GEP is reserved for individuals who chose not to enroll in Part B when they were first eligible. Coverage starts the 1st of the month after you apply.
- Medicare Advantage Open Enrollment Period (MA-OEP) – January 1 to March 31, every year. MA-OEP is only for people who are enrolled in a Medicare Advantage plan as of January 1. During MA-OEP, you can switch to a different Medicare Advantage plan with or without drug coverage or switch back to Original Medicare and also join a standalone Medicare Prescription Drug plan. You cannot switch from Original Medicare to a Medicare Advantage plan during this period.
You Can Sign Up for Medicare Any Time After You Turn 65 – False
Again, you have that Initial Enrollment Period (IEP) to sign up for Medicare. If you fail to enroll during that period, you will incur penalties and a potential gap in your coverage because you may not be able to enroll again until the next General Enrollment Period (GEP), which occurs January 1 to March 31 every year.
Most people will enroll in Medicare Part B coverage when they first sign up for Medicare. GEP is reserved for individuals who chose not to enroll in Part B when they were first eligible. Because coverage starts July 1 of the same year, you could have a period of time when your coverage is not in effect.
Here’s an article that explains the GEP in more detail.
If You Have Other Medical Coverage or a Drug Plan, You Can Postpone Signing Up for Medicare – True/False
Okay, you have other medical coverage or a drug plan, maybe from your employer or former employer. So you should be able to postpone enrolling in Medicare, or even skip Medicare entirely, right?
Unfortunately, it’s not as simple as that, because Uncle Sam wants to assure that all Americans, including you, have Medicare-quality coverage in place.
If you want to postpone starting Medicare, you need to be able to document that the coverage you have is termed “creditable” coverage by Medicare. And not all non-Medicare coverage qualifies. For example, Cobra, short-term health care policies do not qualify, and neither are policies you obtain through the Affordable Care Act (ACA). So be sure to check with the insurance company that provides any policy you have to be sure it qualifies as “creditable.” And then take another step. Speak with one of the qualified Medicare advisors at CoverRight.
To avoid ongoing penalties or lapses in coverage, you want to be sure you sign up for Medicare in a timely way.
My Medicare Starts as Soon as I Sign Up – False
The date your coverage starts depends on which month you sign up during your Initial Enrollment Period.
If you sign up for premium Part A and Part B, coverage starts based on the month you sign up:
- If you sign up before you turn 65, your coverage begins the first of the month you turn 65.
- If you sign up the month you turn 65, your coverage begins the first of the following month.
- If you sign up the month after you turn 65, it begins the 1st of the month after you apply.
You Can Switch Medicare Plans at Any Time If You’re Not Satisfied with the Coverage You Have – False
You are not necessarily committed to stay indefinitely with the first plan you choose. However, because Medicare.gov doesn’t want to deal with the complication of having enrollees change plans constantly, certain fairly stringent rules are in force that controls when people can enroll in or change plans.
To summarize:
- Initial Enrollment Period – Most people can first enroll in Medicare (Part A, B, C and D) during a 7-month window: 3 months before the month you turn 65, the month you turn 65, and three months after the month you turn 65.
- Medicare Part C & D Annual Enrollment Period (AEP) – Between October 15 and December 7 every year, existing Medicare beneficiaries can re-evaluate and amend their Medicare Advantage (Part C) and Medicare prescription drug plans (Part D). You cannot use AEP to enroll in Part A and/or Part B for the first time. If you enroll in a plan during AEP, coverage starts on January 1 of the following year.
- Special Enrollment Period (SEP) – You may qualify for a special period the enroll in Medicare based on certain life events such as you change residence or lose current coverage. Depending on your circumstance, you generally will have two full months to enroll.
- Medicare General Enrollment Period (GEP) – January 1 to March 31, every year. Most people will enroll in Medicare Part B coverage when they first sign up for Medicare. GEP is reserved for individuals who chose not to enroll in Part B when they were first eligible. Coverage starts the 1st of the month after you apply.
- Medicare Advantage Open Enrollment Period (MA-OEP) – January 1 to March 31, every year. MA-OEP is only for people who are enrolled in a Medicare Advantage plan as of January 1. During MA-OEP, you can switch to a different Medicare Advantage plan with or without drug coverage or switch back to Original Medicare and also join a standalone Medicare Prescription Drug plan. You cannot switch from Original Medicare to a Medicare Advantage plan during this period.
That Is Everything You Need to Know About Medicare in All Its Forms – False!
This article has given you a motherlode of information on many aspects of Medicare, and I hope you have learned a lot.
But has this article given you everything you need to know? Has it prepared you to move ahead and enroll without fear of making any mistakes? Unfortunately, no.
Your success enrolling in Medicare – in all its shapes and sizes – will be greatly improved if you work with a licensed Medicare advisor, like one of the Medicare Concierges at CoverRight.
CoverRight is on a mission to make the Medicare plan selection process easy to understand and help you find the best Medicare plans suited to your specific situation. Try our platform to see for yourself.
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