Every year, countless people make Medicare mistakes that can have costly consequences.

Whether it’s choosing the wrong plan, missing deadlines, or not understanding coverage limits, these errors can hurt your wallet. However, it’s not just about money – your health and well-being are on the line!

Fortunately, we’re about to save you from those “oops!” moments. Here are some top Medicare mistakes to avoid.

1. Missing the Initial Enrollment Period, aka not signing up when you are initially eligible

The Initial Enrollment Period is the first time you can sign up for Medicare.

Think of it as your personal ‘Medicare eligibility window‘.

It kicks off 3 months before the month you turn 65, includes your birthday month, and then carries on for another 3 months after your birthday month. So, all in all, it is a 7-month window.

You can calculate your personal Initial Enrollment Period dates using this calculator.

Why’s it so important?

Simple: Missing this window can cost you! And not just in terms of money (hello, late penalties!), but also the delay in getting the healthcare coverage you might need.

Here are some of the consequences of missing your IEP:

Delayed coverage

Miss the window, and you could end up waiting until the General Enrollment Period to sign up. This means there might be months when you’re uncovered unless you are eligible to sign up for Medicare during a Special Enrollment Period.

Penalty fees

If you delay enrolling in Medicare, you could be hit with a late fee. It’s not a one-time thing – that penalty sticks with you for years and can increase your monthly premium, potentially for life.

• Part A: If you are not eligible for the premium-free Medicare Part A, you might have to pay a monthly premium for it. The penalty is 10% of the premium, and you’ll have to pay it for twice the number of years you could have had Part A but didn’t sign up.

You won’t have to pay a Part A penalty if you are eligible to enroll during a Special Enrollment Period. 

• Part B: Your monthly premium could go up 10% for each full 12-month period you could have had Part B. This penalty lasts as long as you have Medicare.

You won’t have to pay a Part B penalty if you are eligible to enroll during a Special Enrollment Period. 

• Part C: This varies depending on the plan, but by missing the initial period, you might delay when you can get coverage and end up with a gap.

• Part D: The cost is calculated by multiplying 1% of the “national base beneficiary premium” by the number of full, uncovered months you didn’t have coverage. You pay this penalty for as long as you have a Medicare drug plan.

You won’t have to pay a Part D penalty if you have creditable drug coverage or you qualify for Extra Help. 

Higher costs overall

Beyond just penalties, there’s the reality that medical issues don’t wait around. Without coverage, you might be dipping into your own pockets more than you’d like.

Avoiding the mistake

• Calendar alerts: Set reminders, mark your calendars, and maybe even slap a sticky note on your fridge.
• Research early. Understand which parts of Medicare you need. Knowledge is power, and it can save you money.
• Consult with a pro. If you’re feeling lost, there’s no shame in seeking guidance. There are experts, like our team at Hella Health, ready to guide you through Medicare.

2. Assuming Medicare covers everything

Alright, let’s tackle another big misconception head-on. People think of Medicare as this magical umbrella that shields you from all health expenses. Unfortunately, that’s not quite the case. Let’s break it down:

What does Medicare really cover?

• Part A: This one’s about hospital stays, skilled nursing facility care, hospice, and some home health visits. It has a deductible and copay.
• Part B: We’re talking doctor visits, outpatient care, medical supplies, and preventive services. It has a deductible and copay.
• Part C (Medicare Advantage): An “all-in-one” alternative to Original Medicare (Parts A & B). It often includes Part D. It can have a deductible and copay.
• Part D: Prescription drug coverage. It also has a deductible and copays.

Note: Original Medicare and Medicare Advantage are separate Medicare Plans. Original Medicare covers Part A (Hospital) & Part B (Medical) and is funded by the federal government. Whereas, Medicare Advantage (Part C) is an all-in-one private insurance plan that covers everything that Original Medicare offers and more.

Here’s the catch

Sure, it sounds like a lot, but Medicare doesn’t cover everything. 

Things like long-term care, most dental care, eye exams related to prescription glasses, and routine foot care? Nope, not covered.

Also, Original Medicare doesn’t have an out-of-pocket maximum. This means if you have a rough health year, there’s no limit on what you could be paying. 

As for Medicare Advantage, the out-of-pocket in 2023 is the following:

Medical Advantage Type	Average out-of-pocket (in-network)	Average out-of-pocket (out-of-network)
PPO	Local PPOs: $5,561	Local PPOs: $3,044
Regional PPOs: $6,842	Regional PPOs: $2,801
HMO	$4,033	Paid 100% by the enrollees*

Source: KFF

The real-world consequences:

• Unexpected bills. Ever had that sinking feeling when a surprise bill arrives in the mail? Without being aware of Medicare’s gaps, you might experience this more than you’d like.
• Delaying care. If you’re unsure about coverage, you might avoid going to the doctor, which is never a good thing.
• Stress. It’s not just about money. The emotional strain of juggling uncovered medical expenses can be heavy.

What can you do?

Educate yourself.

Get familiar with the specifics of what’s covered and what’s not. No one likes unpleasant surprises.

Consider Supplemental Plans 

If you stay with Original Medicare, you can supplement your coverage by signing up for a Prescription Drug plan and/or a Medigap policy.  Medigap can help bridge the coverage gaps. It’s like getting an extra safety net. 

If you prefer to replace Original Medicare with a Medicare Advantage plan, then you will have a cap as to the maximum out-of-pocket expenses you could face.

3. Not reviewing Medicare Advantage and Part D Plans annually

Okay, let’s get into this. You’ve picked a Medicare plan – great! But is “set it and forget it” the right approach? Spoiler: not really. Here’s why.

Why should you review plans each year?

Medicare plans evolve. Coverage specifics, network restrictions, and drug formularies can change from year to year.

Maybe this year you’re on more medications or need a specific type of care. Just as you wouldn’t wear last year’s winter coat in a summer heatwave, you shouldn’t rely on an outdated Medicare plan.

Also, you can change your Medicare Advantage plan every year if it doesn’t align with your needs. You can even go for a Medigap plan.

Risks of sticking with the status quo

• Rising costs. If you’re not checking, you might end up paying more for the same services.
• Medications not covered. Imagine going to pick up your regular prescription and finding out it’s no longer covered. Yikes.
• Out-of-network doctors. That physician you really trust? They might not be in your plan’s network anymore. If a doctor isn’t in-network, they might not even accept Medicare. That means you could get a full bill with no assistance from Medicare.

How to stay on top

Plan Annual Notice of Change (ANOC): 

If you’re on Medicare, expect an “Annual Notice of Change” (ANOC) each fall. It lists changes in coverage and costs starting in January. Just like with PPOs or HMOs, always check if your doctors, hospitals, and other providers remain covered in your plan each year.

Medicare’s Fall Open Enrollment 

Running from October 15 to December 7, this is your window to make changes. Circle it on your calendar, set a phone reminder, and maybe even throw a little “Medicare Review Party” (okay, maybe not, but you get the idea).

Chat with experts 

Not sure how to interpret the changes or what’s best for you? Medicare counselors or experts like Hella Health can help guide your choices and help you stay up to date with the changes. 

4. Assuming Medicare for your spouse

One might think, “I have Medicare, so my spouse is automatically covered, right?” Well, not quite. Medicare isn’t like your typical employer-based insurance where one plan might cover the whole family. Here’s what you need to know about spouses and Medicare:

How Medicare views spouses

Unlike family packages in other insurance scenarios, Medicare applies on a personal basis. Just because you’re in, doesn’t mean your spouse is too.

Friendly note: Don’t pick a plan because your spouse or friend did. Everyone’s health needs and situations are different. Research and find what fits you best.

What’s required for spouse eligibility?

The magic number is 65. Even if you’ve worked and paid into the system for over 10 years, your spouse will only qualify for Part A once they hit this age milestone.

If your spouse isn’t yet 65 but has received disability benefits from Social Security for 24 months, or if they have conditions like end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS), they qualify for  Medicare before they turn 65.

Where it gets tricky

Younger spouses 

If your spouse hasn’t reached 65 and doesn’t meet the conditions mentioned, they’ll need to seek coverage elsewhere. Maybe through their work, a COBRA plan, or even a policy from the state or federal marketplace or directly with an insurer.

Social Security doesn’t equal Medicare 

It’s easy to mix up, but even if your spouse gets Social Security spousal benefits, it doesn’t guarantee Medicare coverage. They’re two separate things.

If you’re divorced or widowed 

If you can’t get free Medicare Part A from your work history, you can qualify through your spouse’s – even if widowed or divorced (given a 10-year marriage).

At 65, if your former spouse worked and paid Medicare taxes for 10 years, you’re eligible for free Part A. Start applying online or at a Social Security office three months before your 65th birthday. Premiums still apply for other Medicare parts.

5. Missing the Initial Enrollment window for Medicare Supplement (Medigap) Policies

Alright, let’s chat about something a lot of people overlook: Medigap, which is an essential part of maximizing your Medicare benefits. 

What’s Medigap anyway?

Medigap is designed to fill in those “gaps” in Original Medicare. Things like copayments, coinsurance, and deductibles that Original Medicare might leave you holding the bag for.

Why does it matter?

Without Medigap, you could end up with bills that make your jaw drop. Medical costs are no joke, and those out-of-pocket expenses can add up.

Some Medigap plans even cover international travel emergency care. So, if you’ve got wanderlust, Medigap might be your travel buddy.

If you overlook Medigap

You might think you’ve got your finances all mapped out, but without accounting for those extra out-of-pocket costs, your budget might take some unexpected hits.

When medical issues arise, the last thing you want to be doing is stressing about costs or international coverage. Having a Medigap policy can let you focus on what truly matters – getting better.

When can you buy Medigap?

The best time to buy a Medigap policy is during your 6-month Medigap Open Enrollment Period. During this time, you’re guaranteed the right to buy any Medigap policy sold in your state, regardless of health conditions.

Making Medigap work for you

A Medigap policy can be costly, so you need to decide if this is something that works for your wallet. The cost of Medigap policies can vary widely; the monthly premium can go anywhere from $40 to $500 depending on the plan and state. There can be big differences in the premiums that different insurance companies charge for exactly the same coverage. It’s essential to compare Medigap policies. So you need to decide if this is the right path for you.

Endnote: stay sharp!

So, there you have it. Making the right Medicare moves is crucial. 

Whether you’re approaching the magic age of 65, already enjoying the benefits, or helping out your parents, being aware of these Medicare mistakes can make a world of difference. 

We’ve unveiled the traps, but the ball’s in your court now.