3 Most Important Medicare Tips
Medicare is uncharted territory for most of the 10,000 people who come into the program each day. It’s not a minefield, exactly, but lurking in the undergrowth are pitfalls and traps that can be costly unless people take care to dodge them.
Astonishingly, no coordinated effort to reach out to soon-to-be-65-year-olds exists. You have to figure out what to do — and when to do it — on your own, along with 10,000 Americans reaching the age of Medicare eligibility every day.
“The process is mind-boggling — incredibly frustrating,” said 68-year-old Jean Sommerfield of Colorado Springs, CO, who has struggled for months to understand the Medicare choices that lie before her.
Making a mistake can be costly. If you miss enrollment deadlines or make incorrect assumptions about coverage, you may find yourself without insurance protection for several months or incur substantial penalties. “Avoiding the most common mistakes in Medicare can make the difference between having good financial and health security — or not,” says Joe Baker, president of the Medicare Rights Center, a national consumer group. The center hears constantly from older Americans who’ve been forced to go without coverage for many months or to pay higher premiums for the rest of their lives — just because they didn’t know the rules about enrollment.
Here are some basics about enrolling in Medicare targeted toward the soon-to-be-seniors crowd. (Slightly different rules apply to people with disabilities.)
Failing to enroll in Part B when you should
Signing up at the time that’s right for you is critical. If you don’t, you risk late penalties, in the form of surcharges added to your premiums for all future years, and delays of several months before coverage kicks in. People can choose to delay when they take their Social Security, but failing to sign up for Medicare Part B on schedule could put you on the hook for a penalty.
There is a seven-month window during which a person can sign up for Medicare Part B without worrying about being penalized. That window opens three months prior to the month in which you turn 65 and closes three months after that month. If you fail to sign up for Part B during this period, then for every 12 months of delay enrollment you could pay 10% more monthly in Medicare Part B premiums, unless you qualify for a special enrollment period.
For example, if you sign up for Part B 30 months after your initial enrollment period ends, then your monthly part B premium penalty would be 20% because the delay includes two full 12-month periods.
If you have health coverage beyond age 65 from an employer for which you (or your spouse) actively work, and the employer has 20 or more workers, you can delay Part B enrollment without penalty until the job ends. Otherwise, you need to sign up during your seven-month initial enrollment period — which includes the month you turn 65, three months before and three months after.
Thinking you must reach full retirement age before signing up
Full retirement age for most people is now 66, which will gradually increase to 67 for those who were born after 1959. But if you want to avoid late penalties, you need to sign up for Medicare at age 65, unless you have health coverage from your own job or from your spouse’s current place of employment. You don’t need to wait until you retire and are collecting Social Security benefits to enroll in Medicare.
Not signing up for Part D because you don’t take any prescription drugs
Why pay Part D premiums if you need no medicines? Because you don’t have a crystal ball and can’t be sure that you won’t get some unforeseen illness or suffer an injury that takes expensive drugs to treat. (Some cancer drugs cost thousands of dollars a month.) Part D, like all insurance, provides coverage when you need it, but doesn’t allow you to.
For each month you delay enrollment in Medicare Part D, you will have to pay a 1% (each month) Part D late enrollment penalty (LEP), unless you:
- Have creditable drug coverage
- Qualify for the Extra Help program
- Prove that you received inadequate information about whether your drug coverage was creditable
In most cases, you will have to pay that penalty every month for as long as you have Medicare. If you are enrolled in Medicare because of a disability and currently pay a premium penalty, once you turn 65 you will no longer have to pay the penalty.
How do you calculate your premium penalty?
Let’s say you delayed enrollment in Part D for seven months (and you do not meet any of the exceptions listed above). Your monthly premium would be 7% higher for as long as you have Part D (7 months x 1%). The national base beneficiary premium in 2018 is $35.02 a month. Your monthly premium penalty would therefore be $2.45 ($35.02 x 1% = $0.3502 x 7 = $2.45) per month, which you would pay in addition to your plan’s premium.
Note: The Part D penalty is always calculated using the national base beneficiary premium. Your penalty will not decrease if you enroll in a Part D plan with a lower premium.
Getting help from a Local Medicare Plan Agent in person, will help you figure out everything about Medicare and what you need to do. Kevin Kennedy of MedicareFlex is a Colorado Local that will represent you. He sells Medicare plans for Multiple companies like United Healthcare, Humana, Cigna, etc. to find and get the best deal for you.
You can reach Kevin and the MedicareFlex team at:
Get More Assistance
Kevin is here to help you with your Medicare questions. Whether your new to Medicare or would like to find out what other plans are available, it is a confusing subject for everyone. He will help you figure out what is the best plan for you, whether it is a Medicare Advantage Plan or Medigap (Medicare Supplement) plan.