Over the years, we have found Medicare members make a handful of the same common mistakes. These mistakes are easily avoidable, but can prove costly if made. At Burchfield Insurance we take the time to carefully walk our clients through the Medicare process and eliminate any surprises.
Missing Your Sign-Up Period
If you are already receiving Social Security or Railroad Retirement benefits when you turn 65, then your enrollment in Medicare is automatic. If you do not, then you must sign up for Medicare during your initial enrollment period. If you miss this enrollment period, you may find yourself stuck paying unnecessary and ongoing premium penalties. Your initial enrollment period when you turn 65 is a seventh month window surrounding your 65th birthday. You have the three months prior, the month of and the three months following your 65th birthday to sign up for Medicare.
Not everyone elects to take Medicare when turning 65. Plenty of people decide to work beyond 65 and keep their employer coverage until retirement. If you work beyond 65, be sure to pick up Medicare upon retirement. Do not make the mistake of thinking there is no need to pick up Medicare because you elect COBRA or have retiree benefits. If you choose to work beyond 65 and your employer has fewer than 20 employees, you will need to sign up for Medicare while you continue to work. Medicare’s primary payor rules state that for smaller companies, Medicare will pay first and your employer coverage secondary. If your employer has fewer than 20 employees and you are eligible, but do not have Medicare coverage, your group plan may refuse to pay claims.
Thinking There Is No Need For Medicare If You Have COBRA Or Retiree Coverage
As a general rule of thumb, Medicare is going to be the primary payor once turning 65. If you retire and receive health insurance through COBRA or a retiree program, those plans pay second. This means if you incur health care expenses, your insurance will only pay what is left after Medicare makes its payment. If you do not have Medicare in the first place, the secondary plan will refuse to pay at all. Furthermore, if you miss out on your initial enrollment period you will have to wait until Medicare’s general enrollment period of January 1 - March 31, for a July 1 effective date. This could not only leave you paying unnecessary and ongoing premium penalties as mention previously, but also with a prolonged gap in healthcare coverage.
Assuming Your Spouse Will Be Covered
Medicare is individual insurance, meaning each individual must meet Medicare’s eligibility requirements. This is different than employer sponsored insurance where you can add your spouse or dependents to your coverage. If you are turning 65 but carry a younger spouse on your employer’s insurance, you will need to consider the financial implications of switching to Medicare. The same applies for Medicare Supplement and Medicare Advantage coverage. These are individual plans; you cannot add your spouse to your coverage. He or she must purchase their own individual policy. Because your spouse may have different healthcare needs, you are each able to pick the Medicare plan that fits your individual needs.
Choosing The Wrong Delivery System
Upon entering the Medicare program, members are soon met with the realization that Medicare will not cover all of their healthcare expenses. For this reason, the majority of Medicare members will purchase additional coverage in the form of either a Medicare Supplement and Part D plan or a Medicare Advantage plan. There are advantages and disadvantages to each delivery system you should consider when choosing your Medicare coverage. You can read more on the differences between the two here.
Medicare Advantage and Part D plans are guarantee issue products. Medicare Supplements on the other hand are not. If you are looking to enroll in a Medicare Supplement outside of your initial enrollment period, you will face underwriting guidelines and need to answer health related questions. Carriers can then approve, deny or charge you a higher premium for your enrollment in a Medicare Supplement product. The good news is you are not stuck with your initial Medicare decision. If you feel you made the wrong decision or your healthcare needs change, so can your Medicare coverage. As always, our team at Burchfield Insurance is available to help guide you in the decision-making progress, helping eliminate any surprises down the road.
Ignoring Annual Notice Of Change
Every fall, prior to the open enrollment period, your Medicare plan will send you an Annual Notice Of Change (ANOC). This will highlight changes in your plan for the coming year, which might affect your coverage. Failing to read through your ANOC may result in missing critical changes in coverage and lead to unnecessary additional costs. Be sure to comb through your plans ANOC to ensure the care you need will continue to be covered. Also be aware of changes in the provider network. If your doctor were to leave your plans network, continuing to see him or her would result in higher out-of-pocket costs. For Part D plans, lookout out for changes in pharmacy networks and plan formularies. Finally, be sure to look for changes in limits, copayments and coinsurance amounts as small changes can add up over the course of a year.
You very well may find that your ANOC brings you good news. With the growing popularity of Medicare Advantage products, over the past few years, on average, premiums have decreased and benefits have increased. Additional benefits aimed at keeping you healthy have also been added over the years. So, when you receive your ANOC, be sure to carefully read through it and make sure your needs for the upcoming year will still be met and you are taking advantage of the benefits your plan offers.
Don’t Get Caught Making These Medicare Mistakes!
The Medicare team at Burchfield Insurance is always available to help guide you through the Medicare process. These commonly made Medicare mistakes are easily avoidable, but costly if not considered. At Burchfield Insurance, we take the time to walk our clients through their options, finding them the best fit while eliminating any surprises. Contact us today for a free Medicare consultation.
