Medicare is a federal insurance program available to anyone over 65, as well as some young people with disabilities. While it has great benefits, it can be easy to get confused by all the rules and guidelines. Many people who don’t fully understand Medicare can end up getting caught out by surprise fees and expenses. Here are just some of the most common mistakes that people make involving Medicare and how you can avoid them.
Missing the sign-up deadline
Many people make the mistake of assuming that they will be automatically enrolled for Medicare the moment they hit 65. This may be the case if you’re already taking Social Security benefits, but if you’re not you’ll need to manually sign up yourself. You should aim to sign up to Medicare Part B and Part D 3 months prior to your 65th birthday. If you enrol late, you are likely to be charged a lifetime penalty fee (the later you enrol, the larger the fee).
Not understanding the different types of Medicare
Medicare is divided up into 4 parts: A, B, C and D. These parts all provide different forms of coverage, which are worth researching into. You are able to customize your plan to include specific types of Medicare – decide which types you need before you turn 65 so that you can take out the plans you need without incurring penalty charges.
Overestimating your coverage
If a long-term employer previously offered insurance, you may have gotten used to a certain level of coverage. However, as many people find out when retiring, Medicare may not necessarily provide the same level of coverage, which could mean much higher medical bills than before. A lot of people take out supplement insurance with Medicare in order to provide more extensive coverage. While this means added insurance costs, you’ll likely save money on out-of-pocket treatment costs.
Not checking which providers accept your Medicare advantage plan
If you opt for a Medicare advantage plan (plan C), you should check that your local doctor accepts this coverage first. Not all doctors and clinics accept Medicare advantage plans, which could mean having to find a new doctor or pay for treatment out of your own pocket.
Renewing your policy each year without shopping around
You change your Medicare plan every year during the annual election period (October 15th to December 7th). While you don’t have to change your plan, you should at least take the time to shop around. There could be better plans and deals out there that can save you money. Too many people allow their plan to be automatically renewed each year out of convenience when they could be saving money with a better suited plan.