8 Mistakes People Make When Signing Up For Medicare
Signing up for Medicare can be a pretty exciting time! You finally have access to the healthcare benefits you’ve paid into for decades. However, there are some mistakes you can make when signing up for Medicare, and some of them can even cost you money down the road.
Whether you’re turning 65 or continue to work into your golden years, these are 8 of the most common mistakes people make when signing up for Medicare:
- Mistake #1: Not signing up for Medicare online.
- Mistake #2: Not signing up for Medicare during your Initial Enrollment Period (IEP).
- Mistake #3: Not buying a Medicare Supplement during your Medigap Open Enrollment Period.
- Mistake #4: Not getting educated on what your Medicare benefits really are.
- Mistake #5: Not considering the Lasso Healthcare Medical Savings Account (MSA).
- Mistake #6: Not seeing past the “extras” offered by Medicare Advantage plans.
- Mistake #7: Signing up for Medicare while you’re still working.
- Mistake #8: Choosing a Part D drug plan because your friend, family member, or neighbor recommended it.
Need Medicare or retirement planning help? The Sams/Hockaday team specializes in Medicare health insurance as well as retirement planning. Read more about what we do and schedule an appointment with the agent of your choice today!
Medicare Mistake #1: Not signing up for Medicare online.
It’s not the end of the world if you go to the Social Security office to sign up for Medicare. However, you’re sure to waste several hours, if not half the day!
Social Security even put out their own report about why their wait times are so notoriously horrendous (too many visitors and staffing issues are two reasons). Since 2010, the number of office visitors who had to wait longer than an hour increased by 109%!
While you certainly can sign up for Medicare in person, it’s much better to do it online. Visit https://www.ssa.gov and click on “Medicare Enrollment.” Click the blue button that says "Apply for Medicare Only." Start the new application.
And that’s it! No more long wait times at your local Social Security office.
Further Reading: Social Security Benefits Explained
Brand new to Medicare and feeling confused? Check out our complete beginner's guide: If You Don’t Understand Medicare At All, Start Here
Medicare Mistake #2: Not signing up for Medicare during your Initial Enrollment Period (IEP).
If you’re continuing to work past age 65, you can skip this section (see mistake #7).
However, if not, you can first sign up for Medicare during the 7-month window that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65. This 7-month window is called your Initial Enrollment Period, or IEP.
Ideally, you want to enroll in Medicare during the first 3 months of this window so that your coverage starts on the first day of your birthday month.
However, you can wait until the month you turn 65 or the 3 months after, but your start date for Part B coverage will be delayed.
The real problem comes in when you miss this 7-month IEP entirely. If that’s the case, and you don’t qualify for any Special Enrollment Periods, you have to wait until the General Enrollment Period between January 1-March 31 of each year.
When you sign up during this time, your coverage doesn’t start until July 1 of that year, and you’ll typically pay a late enrollment penalty. Your monthly premium for Medicare Part B may go up 10% for each full 12 months you could’ve had Part B, but didn’t.
Don’t miss your Medicare signup window! Our agents can help you with this, so please reach out when you’re close to 3 months before your 65th birthday.
Read More: Enrollment Periods
Medicare Mistake #3: Not buying a Medicare Supplement during your Medigap Open Enrollment Period.
If you decide that a Medicare Supplement, also called Medigap, is right for you, don’t put off applying!
The absolute best time to purchase a Medicare Supplement is during your Medigap Open Enrollment Period. This 6-month period begins on the first day of the month in which you’re 65 or older and enroll in Part B. During your Medigap Open Enrollment Period, a company must allow you to buy any of the Medigap plans it offers.
They also have to sell you a plan at the best rate, not the higher rates that are typically offered to those with substandard health.
If you miss this 6-month window and have any health conditions, there’s a chance that Medicare Supplement companies will either deny you completely or charge you more with a substandard plan.
Medicare Mistake #4: Not getting educated on what your Medicare benefits really are.
If you think that Medicare is 100% coverage, you’re wrong! Medicare’s coverage is pretty great, especially when compared to the insurance you’ve probably been paying for most of your life, but it’s not full coverage.
There are also deductibles for both Part A and B, and in general, you have 20% coinsurance. This means that most of the time, Medicare pays 80%, and you pay the remaining 20%.
This is why many adults choose to look into a Medicare Supplement. Depending on which plan you choose, you can get benefits that fill in these coverage gaps:
- Part A coinsurance and hospital costs
- Part B coinsurance
- Skilled nursing facility care coinsurance
- $1,408 Part A deductible
- Part B excess charges
- Foreign travel emergency
You may also consider a Medicare Advantage plan, which does away with the Medicare coverage design and gives you a private health insurance plan with low or no premium.
Further Reading: How Can Medicare Advantage Plans Have $0 Monthly Premiums?
There is also the Medicare Medical Savings Account (MSA), which is $0 premium and gives you money to use for qualified medical expenses each year.
In any case, make sure you’re fully educated on what your plan benefits will be!
All too often, beneficiaries come to us and explain that they didn’t fully understand what their out-of-pocket costs would be. Switching plans can be tricky, especially in the beginning or middle of the year, so be sure to meet with one of our agents as you prepare for Medicare enrollment.
Medicare Mistake #5: Not considering the Lasso Healthcare Medical Savings Account (MSA).
Lasso Healthcare’s MSA is a $0 premium, high-deductible health insurance plan paired with a special deposit ($3,240 in 2020) that you can use for qualified medical expenses. MSA plans have no networks – you can see any doctor that accepts Medicare.
The best time to join the Lasso Healthcare MSA is when you’re 65 – or whenever you are first signing up for Medicare. At this time, you’re the youngest you’ll ever be, which gives you the maximum amount of time to have healthy years and accumulate funds to use down the road.
That said, that doesn't mean that someone in their late 70s or 80s is not a good candidate for the MSA product.
If you can have several good health years with the MSA, those funds will never leave you. If you decide to choose a Medicare Supplement later on, you can use those accumulated funds to offset any exposures other than your premium.
Overall, it just puts you in a stronger financial position.
Medicare Mistake #6: Not seeing past the “extras” offered by Medicare Advantage plans.
Medicare Advantage plans are offering more extra benefits than they ever have, and it’s easy to get excited about them!
From free gym memberships through SilverSneakers to over-the-counter allowances and free dental exams, Medicare Advantage plans certainly have a lot to offer.
However, it’s all for nothing if your doctors aren’t in the plan’s network! Plus, if you travel often or travel south for the winter, you’ll be stuck without coverage.
Too often, individuals come to us asking for a plan that offers a SilverSneakers gym membership, but that should really be the least of your concerns. Pay special attention to the plan’s benefits, including:
- Which doctors, hospitals, and pharmacies are in your network
- Your deductibles and coinsurance
- Your out-of-pocket maximum
- If your drugs are covered by the plan’s formulary
Medicare Advantage plans can be a good buy, but only if the network makes sense and you’re comfortable with the out-of-pocket expenses.
Decatur, IL hasn’t had excellent Medicare Advantage options in the past, and while there are more options now than ever before, we encourage you to look past the fancy “extras” that are marketed by these plans. The health coverage is what’s most important!
Medicare Mistake #7: Signing up for Medicare while you’re still working.
So this isn’t one-size-fits-all – nothing in insurance ever is – but signing up for Medicare while you’re still working isn’t always the right choice.
When deciding if you should stay on your group plan or switch to Medicare, the best place to start is to lay out your current coverage. What are you paying in premium? What is your plan deductible, copays, and coinsurance?
Once we have those numbers written down, let’s compare them to what Medicare offers.
If your group insurance is great, Medicare coverage might not make the cut. If you’re responsible for a lot of costs involved in your group plan, it can definitely make sense to switch.
However, don’t assume that Medicare is the right choice as soon as you turn 65. Be sure to consult with our agents here at Sams/Hockaday before signing up!
Medicare Mistake #8: Choosing a Part D drug plan because your friend, family member, or neighbor recommended it.
Medicare Part D prescription drug plans are very personal. The best plan for you is going to depend on your exact medications as well as which pharmacy you prefer.
If your friend says they love their SilverScript drug plan and they recommend it to you, take it with a grain of salt! Unless you both take the same prescriptions and go to the same pharmacy, it probably won’t be the right plan for you.
When you run a Part D drug comparison on Medicare’s website, you’ll be prompted to enter your prescriptions (along with dosages and frequencies), and you’ll also select your Top 2 pharmacies. The system will help you find the drug plan that is the lowest cost for you based on these selections.
You can typically only sign up for Medicare Part D plan during Medicare’s Open Enrollment (October 15-December 7) or when you’re first eligible for Medicare.
Get Professional Medicare Help!
Our mission here at Sams/Hockaday is to guide you through the Medicare process so that you don’t have to worry about any of these mistakes.
If you’re new to Medicare or are already enrolled, reach out to us for help. We love to educate you on all your options and prepare you for what’s ahead. Give us a call at 217-423-8000 or schedule an appointment with us using our Online Scheduling tool.
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