Busting the Top Five Medicare Myths

Nearly everyone over the age of 65 depends on it, but myths and misconceptions around Medicare persist. The government-funded health insurance program for seniors will provide more cumulative lifetime benefits to average earners than Social Security by 2055, according to a study by the Urban Institute, but its complexities inspire a host of misconceptions.Myth 1: I can enroll anytime I want to.First time enrollees have three months both before and after their 65th birthday for their initial enrollment period (IEP). The annual enrollment period (AEP) is October 15 through December 7, when you can make changes to your Medicare coverage.Participants can switch between a Medicare Advantage plan and a traditional Medicare plan during the open enrollment period without getting hit with a penalty.  Retirees can also switch from one Part D prescription drug plan to another, or add Part D to their coverage (although a late enrollment penalty may apply).What you can’t do during open enrollment is switch from Medicare Advantage to Medigap or switch Medigap plans without answering medical questions. You also can’t join Part B, which covers outpatient care, preventive services, ambulance services, and durable medical equipment, unless you have a qualifying event.Myth 2: Medicare pays for long-term care.Many seniors are shocked to find out that Medicare is not going to pay for their golden years in a retirement home or assisted living facility. It will cover the first 20 days in a skilled nursing facility, if and only if the need is due to a hospital stay of at least three days. (Some Medicare Advantage plans will waive this requirement under certain circumstances). As of 2017, days 21 through 100 are no longer fully paid, and require a copay of $164.50 per day.Myth 3: Medicare covers all my health expenses.Medicare generally covers 80 percent of costs, and that 20 percent that isn’t covered can add up fast. Consider the additional financial burden of dental, vision and hearing coverage, and it explains why so many seniors get supplemental insurance.Myth 4: Medicare is free.Most people get hospital insurance (Part A) for free, but are surprised that medical insurance (Part B) and prescription drug coverage (Part D) require a premium payment, which is dependent on their income. For 2017, the standard premium per month for Part B is $134, but most people with Social Security end up paying $109 a month on average, according to the U.S. Centers for Medicare and Medicaid Services..Myth 5: I don’t need to enroll in Medicare.Even if you have other insurance, it could be crucial to enroll – and timing matters.If you work in a company that employs fewer than 20 workers, the employer-sponsored health plan automatically becomes secondary to Medicare at age 65, and the Part B penalty kicks in. That penalty means premiums can go up almost 10 percent for every month you are eligible for Medicare but not enrolled.Likewise, small business owners and seniors who are self-employed have to enroll in Medicare during their IEP, regardless of whether or not they buy insurance privately.If your employer has 20 or more employees, it’s usually a good idea to at least sign up for the free Medicare Part A as soon as you’re eligible. But, before you do, find out if that will trigger a change in your current coverage.Source:  Society of CSAs Blog: September 4, 2017 Image courtesy of Stuart Miles at FreeDigitalPhotos.net