The Medicare signup can be complicated, and it’s very easy to make mistakes. Indeed, some mistakes may disqualify, or at the very least, delay your enrollment. Here are some basic mistakes people make when they apply and how you can avoid them.
Medicare Signup: Common Mistakes
According to the Medicare Rights Center, a nonpartisan, not-for-profit consumer service organization, there are several basic mistakes people make on their applications.
Here are the basic mistakes:
- Missing the enrollment window
- Not knowing when the sign up occurs
- Misunderstanding your job’s insurance
- Ignoring late enrollment penalties
- Not fully weighing your options
- Delaying a Medi gap buy
- Not understanding your out-of-pocket costs
- Picking a plan that doesn’t have your doctors
- Taking a drug plan that doesn’t meet your needs
- Assuming you can’t afford Medicare
Medicare Signup: Be On Time!
Timing, is everything with the Medicare signup. And, if you don’t know when the open enrollment period is, you’ve missed the train. It’s especially important when it comes to enrolling in Medicare.
As you approach age 65, you’ll want to enroll during Medicare’s initial enrollment period (IEP). This is a seven-month period goes starting three months before the month in which you turn 65 until three months after.
If you don’t sign up during your IEP, you will get a second chance to enroll during Medicare’s annual general enrollment period, from Jan. 1 through March 31 of each year. The downside is that if you enroll at this time, your coverage won’t begin until July.
And, because you enrolled late, your monthly premiums for Medicare Part B — which covers your doctor visits and other outpatient services — will likely cost you more.
Medicare Signup: Special Enrollment Period (SEP)
Starting at age 65, or when you stop working and lose your health insurance coverage , you’ll need to sign up for Medicare. This special enrollment period (SEP) lets you do that without paying a late penalty. So make sure you’re on time and sign up either immediately or within the eight months after your job coverage was terminated.
Keep in mind that Medicare does not count retiree health insurance or COBRA as job-based coverage. So, if that’s the insurance you have, you’ll need to reread mistake No. 1 and sign up when you turn 65 or face that late enrollment penalty.
Medicare Signup: Learn About Part B and D
For every 12 months you delay enrolling in Part B, your monthly Part B premium may be 10 percent higher. The penalty won’t apply if you have job-based insurance or are still under your special enrollment period.
Insofar as Part D is concerned, your prescription drug costs will be higher if you miss or delay your enrollment. Specifically, for every 12 months you delay signing up for a Part D plan, your monthly premium can be 1 percent higher.
Your employer — or insurance plan — in September of each year must notify you if you have drug coverage comparable to a Part D plan. If you lose your drug coverage, you’ll be eligible for a two-month special enrollment period. And, during this time, you can sign up for a Part D plan without a penalty.
Medicare Signup: Know The Basic Plans
If you are eligible for Medicare, you have a choice to receive your benefits through original Medicare or a Medicare Advantage plan. The type of Medicare coverage you choose depends on factors such as your health care needs, the insurance your doctors accept, where you live, whether you travel often and your financial situation.
Original Medicare is the traditional program offered directly through the federal government. It comprises Part A, which covers hospital costs, and Part B, which covers doctor visits and other outpatient services. The vast majority of doctors in the country take this insurance. Original Medicare does not include Part D (prescription drug coverage), so you must sign up for a stand-alone Part D plan if you do not have other drug coverage.
Medicare Signup: Know Your Deductibles!
While Medicare pays the major share of the medical costs for its members, out-of-pockrt costs are your responsibility to pay. Here is what you need to know:
- Premium: Each part of Medicare may have its own monthly premium. Most people have no premium for Part A, which covers hospital services. You will be responsible for the Part B premium, which if you are collecting Social Security will be deducted from your monthly benefit. If you enroll in a Medicare Advantage (MA) plan or a Part D plan, you may also owe a monthly premium, depending on the plan you select.
- Deductible: Before Medicare starts paying for the cost of your care, you may have to pay a flat amount, called a deductible. Parts A and B in original Medicare have annual deductibles, and some MA and Part D prescription drug plans also have deductibles. Medicare supplemental — or Medigap — policies often cover original Medicare deductibles.
- Copayment: This is a fixed amount you pay for specific services. For example, under MA plans you may have a copay — usually around $25 — every time you see a doctor or get another medical service.
- Coinsurance: This is where your plan will charge you a percentage of the cost of a medical visit or service. If you have original Medicare, you will owe 20 percent of the cost of the service. So, if you get a blood test that costs $100, Medicare will pay $80 and you’ll be responsible for $20. Medigap policies also usually cover your 20 percent share.
Also, and very important. Keep in mind that if you have original Medicare, make sure the health provider you use also accepts Medicare and accepts an “assignment”. That means the provider is willing to accept the amount of payment on Medicare’s fee schedule for the service they perform.
If your doctor is a “nonparticipating provider”, they can charge you up to 15 percent more than Medicare’s approved rate.
Medicare Signup: Prescriptions
Learn about the rules about what drugs are covered and what your costs will be.
Make sure your plan covers your needed drugs. Each Part D plan has a list of covered drugs, called a formulary. If your drug is not on your plan’s formulary, you may have to request an exception, pay out of pocket for the cost, or file an appeal.
Also find out whether your plan places any restrictions (sometimes called utilization management strategies) on coverage. Some plans may place a restriction on a certain drug, but others may not. One restriction might be requiring you to get prior approval from the plan before it will pay for a particular drug.
Another example of a coverage restriction is step therapy. This means your plan requires you to try other, less expensive drugs first. Keep in mind that the less expensive drugs may not be as effective as the more expensive medicine your doctor prescribed for you. If that happens, call your doctor to intercede on your behalf to get you the more effective medication.
Get the best prices for the medications you need. For example, look at whether the plan you’re considering gives you a good deal at the pharmacy of your choice. Each Part D plan has a network of pharmacies that include both preferred and non-preferred pharmacies. You typically pay less for your prescriptions at preferred pharmacies. Mail order might be another good option for you.