Needing to have Medicare demystified wasn’t something I thought possible. I am not eligible for Medicare for 13.5 years but needed to learn what I could to care for Mom.
After my Dad died Mom had doctor bills that weren’t being paid. With her high coverage health insurance plus Medicare I was confused. The good folks at Medicare won’t talk to me without adding another layer of paperwork and bureaucracy to Moms trust . It’s called a Representative Payee; another person and bank account just to deal with Moms medicare. I’ve been advised by folks who know, not to add this headache to our lives.
Eventually the 3 bills got paid and we’ve managed to ensure Moms health care needs are handled without the added person. Unfortunately, I’ve been assuming things would be fine and continue as is. Thankfully, this has been the case so far, but after talking to Danielle from Boomer Benefits, I learned many things about Moms medicare that I can and need to pay attention to.
There are 4 types of Medicare which can get confusing. Your best option is to find a Medicare specialist like Boomer Benefits. You’ll save yourself a lot of time and trouble. If learning about all the options available is how you like to spend your time then go for it! Active learning is good for your brain. For those of us who want to avoid our brains exploding, check out this episode.
Generally, the different parts of Medicare help cover specific services. Most beneficiaries choose to receive their Parts A and B benefits through Original Medicare. This is the traditional fee-for-service program offered directly through the federal government. It is sometimes called Traditional Medicare or Fee-for-Service (FFS) Medicare. Under Original Medicare, the government pays directly for the health care services you receive. You can see any doctor and hospital that takes Medicare (and most do) anywhere in the country.
You have two ways to get your Medicare benefit. Original Medicare (Part A and Part B) with a Medigap plan and Part D prescription drug plan. Or Medicare Advantage with Part D. There are advantages and disadvantages to each option, but you need to think through your health needs before you choose.
Medicare Advantage plans tend to cost less overall, but often have significant restrictions on where and how you get care. On the plus side, most include Part D prescription drug coverage, so you get your Medicare benefits in one convenient plan.
Medicare with Medigap & a Part D plan may cost more in monthly premiums, but you can use them wherever Medicare is accepted. If you travel a lot, or you want the freedom to see any doctor or specialist you want, this path may be best for you.
Other Medicare Issues To Know
Danielle and I discussed many of the decisions that are easy to overlook when working with Medicare. Highlighting those here will help you keep track of what you need to handle and when.
Letting your Part D Plan Automatically Renew Every Year
If you’re 65 or older, you likely depend on Medicare to pay the bulk of your health care costs. It’s tempting to think your part is done when you sign up, but sadly, it’s not that simple. Enrolling is only the first step in managing your Medicare benefits. Make a mistake and you could pay for it for years.
Here’s our list of some of the most common (and expensive) Medicare mistakes you can make.
Missing your Medicare Sign-up Period
If you’re already receiving Social Security or Railroad Retirement benefits, you’re automatically enrolled in Medicare. If you’re not, however, it’s on you to enroll during your initial enrollment period to avoid unnecessary (and ongoing) premium penalties. This period includes your birthday month and the three months before and after.
However, not everyone takes Medicare when they turn 65. If you’re still working, you need to make sure you sign up when you leave your job. Don’t make the mistake of thinking you don’t need to enroll if you’ve got retiree health benefits after you quit.
If your employer has fewer than 20 employees, you’ll need to enroll in Medicare when you turn 65 even if you’re still on the job. That’s because Medicare is the primary payer for smaller companies; if you don’t enroll, your group plan may refuse to pay claims. Learn more about Medicare and Employer Coverage here.
Letting your Part D Plan Automatically Renew Every Year
Every year between October 15th and December 7th, you have the opportunity to review and/or switch Part D plans. Plan costs and coverages can change from year to year. If you aren’t paying attention, you could pay more than you should for your plan.
Take time during the annual open enrollment period to see what plans are available in your area. Compare the costs for medications you take regularly, as well as monthly premiums.
You can also switch Medicare Advantage plans during open enrollment. If you get your Part D with your Medicare Advantage plan, be sure to compare your plan options every year. Don’t let automatic renewal keep you in a plan that costs too much.
Assuming There’s Coverage for your Spouse
Medicare is not like employer group insurance—you can’t add your spouse and/or dependent children to your plan. If you’re working at 65 and your younger spouse is on your employer’s plan, you need to weigh the financial consequences of switching to Medicare.
Another point to remember concerning spouses—Medigap and Part D are individual plans. That is, you can’t add your spouse to your plan; he or she needs to buy a separate one. There’s also no spousal discount, so don’t feel that you both need to choose the same plan. Your spouse may have different health care needs, so you each need to choose the Medicare plan that works for you.
Picking the Wrong Medigap Plan
Original Medicare, Medicare Advantage, and Part D prescription drug plans are guaranteed issue. That means that anyone can enroll regardless of health condition, and premiums are the same for everyone in the plan.
Not so with Medigap. If you don’t enroll in a Medigap plan during your initial enrollment period or a special enrollment period, you have to pass medical underwriting. During underwriting, the insurance company can use your medical history to decide whether or not to sell you a policy. They can also set premiums based on your health status.
Some states do allow you to switch to certain Medigap plans once a year without medical underwriting. These plans tend to be less generous than the most popular plans, however. And that option isn’t available in every state.
If you think you’ll want Medigap coverage, save yourself a lot of money and aggravation and sign up as soon as you’re eligible.
Thinking You Don’t Need Part B if you have COBRA or Retiree Health Coverage.
In the vast majority of cases, Medicare is the primary payer once you turn 65. If you left your job but still get health insurance through COBRA or as part of a corporate retiree plan, that plan pays second.
In other words, if you have health expenses, your group plan only pays what’s left after Medicare pays. If you don’t have Medicare, the other plan won’t pay at all.
To make matters worse, if you forgot to sign up during your initial enrollment period, you’ll have to wait until the general enrollment period, January 1st to March 31st, to apply. Coverage begins July 1st, meaning you could be without health coverage for a long time. Learn more about enrollment periods here.
Ignoring your ANOC
Every fall, your Medicare plan will send you an annual notice of change (ANOC). It tells you what changes your plan is making for the following year that may affect your coverage. If you don’t read it, you may miss important information that could cost you big.
Watch for changes in coverage—will the plan still pay for services you need? Also look for changes in your provider network. If your current doctor leaves the plan, you’ll pay much more out-of-pocket if you continue to see him. Be sure to check pharmacy changes if you have a Part D plan.
Finally, look out for changes in costs like copayments, deductibles, and coinsurance amounts. Even small changes can add up to big bucks over the course of a year.
Check out Boomer Benefits as soon as you finish this episode. You won’t be sorry.