Every day, an average of 10,000 Americans will become eligible for Medicare as they turn 65 — and face a complex new set of health care decisions. If you’re among them, you may feel perplexed about what you need to do about Medicare and when. And, if you do, you are not alone. In fact, of people age 47 to 64, 56% say they know little or almost nothing about Medicare, according to this Bankers Life and Casualty survey.
With the 2016 Medicare Open Enrollment season starting on Thursday, October 15 (and going until December 7), now is a good time to gain an understanding about your Medicare options, so you can choose the 2016 coverage that’s right for you. To assist you in your decision-making, below are some considerations about Medicare, and some mistakes to avoid when enrolling in Medicare (these mistakes could cost you thousands!)
Considerations:
- Misunderstanding enrollment periods: You may have read about “open enrollment” and gotten the idea that this is the only time you can sign up for Medicare. Not true! In Medicare, open enrollment (Oct. 15 to Dec. 7 each year) is only for people who are already in the program and want to change their coverage for the following year. If you’re coming into Medicare for the first time, you get your own enrollment period — either around the time you turn 65, or throughout the time you have health coverage from your own or your spouse’s employment and for up to eight months after it ends. So if you miss your personal deadlines because you’re waiting for open enrollment, you risk delayed coverage and permanent late penalties. (Note: Different enrollment periods apply in some other situations, including when people qualify for Medicare due to disability.)
- Don’t count on receiving a notice from the government reminding you to sign up. Only people who already receive Social Security benefits get a Medicare reminder and become enrolled automatically. Everyone else must initiate the process with the Social Security Administration (the parent agency of Medicare) by making a phone call (800-772-1213), visiting a local Social Security office, or applying online on Social Security’s website.
- You can enroll in Medicare as early as three months before your 65th birthday, and should definitely sign up no later than three months after your 65th birthday to avoid penalties.
- If you enroll in Medicare after 65, you’ll likely be charged 10% more for your Medicare Part B premiums for every 12-month period you were eligible for the coverage but went without it.
- If you decide to stay with your current plan, there is no further action required to renew it. Remember that if you don’t use this window of opportunity, you cannot make any changes to your coverage before October of next year.
- Keep in mind that Medicare isn’t part of the Health Insurance Marketplace established by the Affordable Care Act (also known as Obamacare), so you don’t have to replace your Medicare coverage with Marketplace coverage. No matter how you get Medicare, you’ll still have the same benefits and security you have now. The Affordable Care Act won’t require you to make any changes.
It’s important to know that Medicare plans can change from year to year, as can your health and budget needs. Understanding your options will help you make informed and confident decisions about your health care coverage. There are many resources available to help you do so, including the government’s Medicare.gov site.
Common Medicare Mistakes to Avoid
- Not enrolling in Medicare because you have existing health coverage: Too many people approaching 65 think they can skip signing up for Medicare if they already have private insurance. This can be a BIG mistake. The only insurance that lets you delay Medicare enrollment is a group health plan sponsored by an employer with 20 or more employees. Other types of coverage, including COBRA, are not acceptable substitutes for Medicare. As mentioned above, if you’re supposed to enroll in Medicare but fail to do so when you’re first eligible, you can get charged with late-enrollment penalties.
- Assuming you don’t “qualify” if you haven’t worked long enough: Earning 40 credits through paying payroll taxes at work — about 10 years’ of work — ensures that you won’t have to pay premiums for Part A services (hospital insurance) when you enroll in Medicare. But you don’t need any work credits to qualify for Part B (doctors’ services, outpatient care, medical equipment) and Part D (prescription drugs). Provided that you’re 65 or older, and a U.S. citizen or a legal resident who’s lived in the U.S. for at least 5 years, you can buy Part B coverage for the same premiums that everyone else pays. You might also be able to qualify for Part A benefits on your spouse’s work record, or you can pay premiums for them (the Part A premium in 2015 is as much as $407 per month, or about half that if you have 30 to 39 work credits).
- Thinking you must reach full retirement age before signing up: Full retirement age for most people is now 66. But to avoid late penalties you need to sign up for Medicare at age 65, unless you have qualifying alternate health coverage from your own or your spouse’s current employment. You don’t need to be collecting government retirement benefits to enroll in Medicare.
Don’t Forget to Use Your Preventative Care Benefits!
Medicare covers services including an annual wellness check-up, obesity screening, and counseling and smoking cessation counseling. In addition, many important cancer screenings, such as mammograms and colonoscopies, are also now covered by Medicare at no out-of-pocket cost.
It is important to understand that Medicare does not pay for long-term care. At most, Medicare covers 100 days of short-term rehabilitation that may take place in a skilled nursing facility. Read our blog post “Is Medicare Enough to Cover Mom’s Nursing Home Stay? ” for more details.
Just as you are planning for the Open Enrollment Period, you should plan for your future and for your loved ones. If you have a loved one who is nearing the need for nursing home care, or if you haven’t done your estate planning or incapacity planning, please call us to make an appointment for a consultation:
Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797
Print This PageFredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797
About Evan H Farr, CELA, CAP
