7 Common Medicare Mistakes And How To Avoid Them

“Medicare is an incredibly complicated system that changes periodically, and there are now more options and complications than ever,” says Sam Carleton, director of Vermont’s Statewide Health Insurance Assistance Program (SHIP).

If you’re unclear on the various Medicare programs, you may end up choosing one that doesn’t provide what you need. You can sidestep this mistake if you familiarize yourself with the different kinds of coverage:

• Original Medicare has two parts. Part A covers hospital and short-term skilled nursing facility admissions, and Part B covers doctor visits, screenings and vaccinations, as well as some medical equipment.
• Medicare Part D is an additional policy you purchase from a private health insurance provider to cover prescription drugs and some medical equipment.
• Medicare Advantage is a version of original Medicare offered by private health insurance companies that may include a prescription drug plan and additional benefits beyond medical and hospital coverage.
• Medicare Supplement, or Medigap, is a selection of optional supplemental coverage offered by private health insurance providers that can help pay for costs and services not covered by Part A and Part B. Medigap isn’t available to people enrolled in Medicare Advantage plans.

Private health insurance companies may also offer special needs plans in your area. They provide the same coverage as Part A and Part B (like Medicare Advantage), plus additional benefits. You may qualify if:

• You’re enrolled in both Medicaid and Medicare.
• You have specific chronic or disabling conditions, such as HIV/AIDS, dementia, diabetes, end-stage renal disease or chronic heart failure.
• You reside in a nursing home or require at-home nursing care.

Most people assume Medicare coverage starts when you turn 65, but it’s possible to enroll in both Medicare and Medigap before your 65th birthday. Your initial enrollment period (IEP) begins three months prior to the month of your 65th birthday and lasts three months after it. For example, if your birthday is in July, your IEP starts in April and ends in October. Enrolling before your birthday can help protect you from late enrollment penalties that boost premiums.

You can change or renew coverage every year during the annual open enrollment period, which runs from October 15 to December 7. Auto renewal may be the easiest option but not the best option, as plan costs and coverage details fluctuate year to year.

Neglecting to review the details of their Medicare coverage is the most common mistake people make, according to Carleton, who is also SHIP’s care and service coordination supervisor. “People often miss the opportunity to have significant annual cost savings by simply not doing a comparison,” he says.

Consider spending a few hours going over your current coverage to make sure your plan is still cost effective for your needs and comparing the details to those of other plans for which you qualify.

Certain aspects of your care and finances can affect your Medicare coverage, including:

• How Medicare coordinates with employer-sponsored health insurance. When you have insurance from both sources, it’s important to know which one bears the brunt of your medical costs. For some small companies, Medicare is the primary payer, so the company’s policy pays costs that remain after Medicare pays its share of a claim. For companies with at least 20 employees, Medicare considers the employer-sponsored plan the primary plan. Not knowing this order could mean you end up paying a higher percentage of your care costs.
• Whether your primary care physician or specialist(s) are in a plan’s network. Ask your care team which plans it participates in so you can be sure your visits are covered. Check to see that the tests, clinic visits and supplies you need will be covered as well. “Understand your disease(s),” says Dr. McClanahan. Choosing a plan that doesn’t meet your needs “can be an expensive mistake.”
• Whether there are enough providers in your area. Some plans don’t have a lot of in-network primary care or specialty providers in rural areas. Ask your current health care provider if they participate in your plan.

“When choosing a plan, pay attention to not just the premium, but all the potential out-of-pocket costs,” says Dr. McClanahan. Most plans should offer a summary of these costs. You can also consult Medicare’s plan comparison tool. If necessary, talk to your banker or financial advisor to assess your capacity to cover such costs, then choose a plan that’s realistic for your economic situation.

Furthermore, you can save a lot of money by optimizing deductibles. “For example, if you have a year where you hit your deductible and maximum out-of-pocket [expenses], get everything done that needs to be done,” advises Dr. McClanahan. “That care is essentially free care at that point. Also stock up on medications at that time.”