Without proper Medicare advice, many people make costly blunders when enrolling in the federal health insurance program. If you’re approaching retirement or age 65, you should watch out for critical Medicare mistakes that people make. Read on to learn more!
Table of Contents:
- First Blunder: Missing Your Initial Enrollment Period
- Second Blunder: Filing for Social Security Too Early
- Third Blunder: Relying Solely on Your Spouse’s Health Plan
- Some Common FAQs
First Blunder: Missing Your Initial Enrollment Period
Failure to sign up during your 7-month initial enrollment period (IEP) may expose you to long-term financial penalties. To figure out your IEP, mark the month when you’ll turn 65. For example, if you’ll reach 65 years of age in February 2022, your initial eligibility starts three months before February (November 2021). It would expire three months after February (May 2022).
Missing your IEP can have financial ramifications like:
- Your Medicare Part B premium may increase by 10% for every month you miss while eligible to sign up
- There will be a Medicare Part D penalty for each month you failed to sign up while eligible or without creditable coverage
- Sometimes, you may miss your IEP for Medicare for valid reasons, such as when you’re still covered by your employer’s health plan. You still need to take specific steps to avoid late penalties or charges.
Second Blunder: Filing for Social Security Too Early
It isn’t in your best interest to begin drawing your social security benefits before your full retirement age, which is 66 years old (shifting to 67 for people born in 1960 or after). Some people sign up as early as 62. For this, they lose a fraction of their benefits for every six months of premature enrollment. Therefore, while you should sign up for Medicare during your IEP at 65, you should wait a little longer to begin tapping into your social security plan.
Waiting until you’re 70 is much more rewarding as it can multiply your social security benefits. For each month you didn’t receive your retirement benefits despite being eligible, the funds increase by 2/3 of a percentage point. However, this increment ends when you turn 70, at which point it makes no sense to push back your social security benefits any further.
Third Blunder: Relying Solely on Your Spouse’s Health Plan
Assuming that your partner’s Medicare plan is right for you is one of the costliest Medicare mistakes to avoid. Your spouse’s employer-sponsored health plan may cover you in certain areas, but it’s important to reevaluate your specific coverage requirements as you approach Medicare eligibility.
Each person should obtain a personalized cover that addresses their unique healthcare needs. Maybe you need different prescription drugs for your medical condition or specialist care that your husband’s or wife’s health plan doesn’t cover. These differences in coverage needs make it important to enroll in Medicare once you become eligible, even if your spouse added you to their own plan.
As you approach your Medicare eligibility, it’s important that you properly understand the enrollment process and requirements. Contact us at Medicare Advisors today to eliminate any confusion that could cause costly signup mishaps.
Some Common FAQs
What are the three costly Medicare mistakes and how can I avoid them?
The three costly Medicare mistakes are:
- Missing your initial enrollment period and facing late penalties
- Choosing the wrong Medicare plan and paying more out-of-pocket costs
- Failing to review your Medicare coverage every year and missing out on better options.
You can avoid these mistakes by knowing your enrollment deadlines, comparing different Medicare plans based on your needs and budget, and reviewing your coverage during the annual open enrollment period.
When is my initial enrollment period for Medicare?
Your initial enrollment period for Medicare is a seven-month window that starts three months before your 65th birthday month and ends three months after it. For example, if you turn 65 in June, your initial enrollment period is from March to September. This is the best time to sign up for Medicare Part A, Part B, Part D, and/or a Medicare Advantage or Medigap plan.
How do I choose the right Medicare plan for me?
There is no one-size-fits-all answer to this question, as different Medicare plans have different benefits, costs, and networks. You should consider your health care needs, preferences, budget, and lifestyle when comparing different Medicare plans. Some factors to consider are: how often you visit the doctor or hospital, what prescription drugs you take, whether you travel or live in different states, and how much you can afford to pay in premiums, deductibles, co-payments, and co-insurance.
Why should I review my Medicare coverage every year?
You should review your Medicare coverage every year because your health care needs and budget may change over time, and so may the plans available in your area. Medicare plans can change their premiums, deductibles, co-payments, co-insurance, benefits, formularies, and networks every year. If you don’t review your coverage during the annual open enrollment period (from October 15 to December 7), you may end up paying more for less coverage or missing out on better options that suit your needs.