11 Medicare Mistakes Everyone Should Avoid

Medicare covers the bulk of your health care expenses after you turn 65. But Medicare’s rules can be confusing and mistakes costly. If you don’t make the right choices to fill in the gaps, you could end up with high premiums and big out-of-pocket costs. Worse, if you miss key deadlines when signing up for Medicare, you could have a gap in coverage, miss out on valuable tax breaks, or get stuck with a late enrollment penalty for the rest of your life.

The following are Medicare no-no’s people often commit, but YOU should avoid.

Failing to Review Your Part D Plan during AEP

The annual enrollment period (AEP) for Medicare Part D and Medicare Advantage plans runs from October 15 through December 7 each year. It’s a good time to review all of your options. Plan costs and coverages can vary a lot from year to year. Some plans increase premiums, increase your share of the cost of your drugs, add new hurdles before covering your medications, or require you to go to certain pharmacies to get the best rates. If you have new medications, or you switched to generic drugs over the past year, a different plan may now be a better deal for you.

Roman Brokers in Mesa, AZ will help you compare all of the plans available in your area during open enrollment. Contact Dan at Roman Brokers at 480-834-7447 for more information about picking a plan that best suits your needs.

Enrolling in the Same Part D Plan as Your Spouse

There are no family plans or spousal discounts for Medicare Part D prescription drug plans , and most spouses don’t take the same medications. The plan designed to have the best coverage for your drugs may not be the same plan that is best for your spouse’s medications. You need to look at coverage for your specific drugs.

In addition, Part D plans may have different preferred pharmacies at which to get the best drug co-pays. You could end up paying a lot more if you get your drugs at a non-preferred pharmacy. Roman Brokers will help you compare the plans in your area for your drugs and dosages to estimate out-of-pocket costs for each of you – all at no cost to you.

Going Out-of-Network in Your Medicare Advantage Plan

If you enroll in a Medicare Advantage plan , which combines both medical and prescription drug coverage, you usually want to use the plan’s network of doctors and hospitals to get the lowest co-payments. Some plans won’t cover out-of-network providers at all, except in an emergency. As with any PPO or HMO, it’s important to make sure your doctors, hospitals and other providers are covered in your plan from year to year.

You can switch Medicare Advantage plans during the annual enrollment period each year from October 15 to December 7. Dan at Roman Brokers Insurance in Mesa, AZ will help you compare out-of-pocket costs for your medications and general health condition under the plans available in your area. He will help you narrowed the list to a few plans, making sure your doctors and healthcare providers are included in the network for the coming plan year.

Forgetting about Other Enrollment Periods during the Year

Even though the annual enrollment period (AEP) for Medicare Advantage plans runs from October 15 to December 7, you may still be able to change plans during the year. You have the opportunity to change Medicare Advantage or Prescription Drug plans during the open enrollment period (OEP), which runs from January 1 to March 31.

You can also switch plans during a special enrollment period (SEP) throughout the year if you have certain life changes, such as moving to an address that isn’t in your plan’s service area. Also, if you have a 5-star Medicare Advantage plan in your area you can switch into that plan anytime during the year.

Not Picking the Right Medicare Supplement Plan

If you enroll in a Medicare Supplement plan within six months of your Medicare Part B effective date, you are guaranteed to be issued any plan available in your area, even if you have a pre-existing medical condition. In Arizona, if you try to enroll in a plan after that, insurers in most states can reject your application or charge more because of your health condition.

Forgetting to Apply for Medicare at Age 65

If you already receive Social Security benefits, you’ll be enrolled automatically in Medicare Part A and Part B when you turn 65 (you can delay Part B coverage and sign up for it later if you have creditable employer coverage – see below). But if you aren’t receiving Social Security benefits, you’ll need to apply for Medicare. If you’re at least 64 years and 9 months old, in most cases you can go to the Social Security Administration website and sign up online. You have a seven-month window to sign up; from three months before your 65th birthday month to three months afterward (you can enroll in Social Security later).

You may want to delay signing up for Part B if you or your spouse has coverage through your current employer. However, most people still apply for Part A at 65, since it’s usually free. You may want to delay applying for Part A if you plan to continue contributing to a health savings account. See the Social Security Administration’s Applying for Medicare Only for more information. If you work for an employer with fewer than 20 employees, you MUST sign up for Part A and usually need to sign up for Part B, which will become your primary insurance (ask your employer whether you can delay your Part B coverage).

Not Enrolling in Part B If You Have Retiree or COBRA Coverage

Generally, when you turn 65, Medicare is considered to be your primary insurance, and any other coverage you have is secondary, unless you or your spouse has insurance through a current employer with 20 or more employees. But the coverage must be with a current employer. Other employer-related coverage, such as retiree coverage, COBRA coverage, or severance benefits, is NOT considered to be primary coverage after you turn 65. That means if you don’t enroll in Medicare you may have gaps in coverage and be subject to a lifetime late-enrollment penalty of 10% of the current Part B premium for every year you are late enrolling in Medicare Part B.

In addition, you may have to wait to get coverage. If you miss the seven-month initial coverage period for enrolling when you turn 65, or the eight-month period after you leave your job, you can only sign up for Medicare between January and March each year, with coverage starting on July 1. This can be a very costly mistake.

If you have coverage through an employer with 20 or more employees, you don’t have to enroll in Medicare at 65. Instead, you may choose to keep coverage through your employer so you don’t have to pay the Part B premiums. After you leave your job, you must enroll within eight months or you may have to wait until the next general enrollment period (January through March, for coverage to begin on July 1). That means you could go for several months without coverage, and you may be assessed with the 10% lifetime late-enrollment penalty.

Roman Brokers Insurance is dedicated to helping you develop a Medicare strategy that best suits your needs. No one strategy is best for everyone. Contact Roman Brokers Insurance today at 480-834-7447.

Making Financial Changes that Increase Your Medicare Premiums

Most people pay standard premium for Medicare Part B. However, if you’re your adjusted gross income is more than the Medicare threshold for your enrollment year, you will pay a high-income surcharge for your Medicare Part B AND your Medicare Part D prescription-drug coverage, which can increase your premiums significantly.

If you are near the income threshold, be careful about financial moves that could increase your adjusted gross income and make you subject to the surcharge, such as rolling over a traditional IRA to a Roth or making big withdrawals from tax-deferred retirement accounts. To stay below the limits, you may want to spread your Roth conversions over several years or withdraw money from your Roth IRA rather than just from tax-deferred accounts.

Not Applying for a Lower IRMAA the Year You Retire

The Social Security Administration uses your most recent tax return on file to determine whether you’re subject to the Income-Related Monthly Adjustment Amount (IRMAA) surcharge. You may be able to get the IRMAA reduced if your income has dropped since then because of certain life-changing events, such as marriage, divorce, death of a spouse, retirement or a reduction in work hours. In that case, you can ask Social Security to use your more recent income instead (you’ll need to provide evidence of the life-changing event, such as a signed statement from your employer that you retired).

Enrolling in Medicare Part A If You Contribute to an HSA

You cannot contribute to a health savings account (HSA) after you sign up for Medicare, but that doesn’t necessarily mean that you have to stop making HSA contributions at age 65. If you or your spouse has health insurance through your current employer, you may be able to delay signing up for Part A and Part B and continue contributing to an HSA. This is NOT an option if you have already applied for Social Security or your employer has fewer than 20 employees. In any of these cases, you cannot delay signing up for Medicare Part A.

In addition, be careful about your contributions in the year you leave your job and sign up for Medicare. You must prorate your HSA contributions based on the number of months before you were covered by Medicare. It is usually best to consider terminating HSA contributions 6 months before your Medicare effective date.

Contact Us to Help You Navigate Your Medicare Options

Roman Brokers Insurance is dedicated to helping you develop a Medicare strategy that best suits your needs. No one strategy is best for everyone. Contact Roman Brokers Insurance today at 480-834-7447.