Medicare can be confusing. Beware these missteps — which can
hike your costs.
Brandon Ballenger • December 8,
2019
Retirement is supposed to
be a time to enjoy the fruits from decades of labor, but managing your health
care can feel like a whole new job.
And it’s not a simple
one. The current official
guide to Medicare, the federal health insurance program
primarily reserved for folks age 65 and older, clocks in at 120 pages.
Unfortunately, it’s easy
to make Medicare mistakes. At best, they can cost you extra cash. At worst,
they could leave you with a gap in coverage.
If you have yet to enroll
in Medicare but are nearing age 65, you might want to first check out “4 Dangers for
First-Time Medicare Enrollees.”
The following are some
mistakes that people who are already enrolled in Medicare can’t afford to make
with their coverage.
1. Forgetting about your ‘freebies’
Certain medical services
and products are free for Medicare recipients, at least in that recipients do
not have to pay anything extra, such as a copay or out-of-pocket fee, or meet a
deductible to take advantage of these freebies.
This is true regardless
of which of the two main types of Medicare coverage you have, Original Medicare
or Medicare Advantage.
To learn more about
Medicare “freebies,” check out “6 Things That
Are ‘Free’ With Medicare.”
2. Missing your annual chance to change plans
Your plan’s coverage,
costs and benefits can change from year to year. Fortunately, you get an
opportunity during open enrollment periods to examine your options, make sure
you’re still getting the best value and, if you wish, change your plan.
This is true for people
with Original Medicare, which is provided directly through the federal
government, and those with a Medicare Advantage plan, which is offered by
private companies approved by the government. It’s also for people who bought
separate prescription drug plans, also known as Medicare Part D plans, to
supplement their Original Medicare coverage.
The fall Medicare open
enrollment period is going on now, running until
Dec. 7.
During this time it’s a
good idea to look at the various plans available to you locally, see what their
premiums will be in the coming year and learn your share of costs. You should
also confirm that your favorite pharmacies, hospitals and medical providers
still will accept your plan in the new year
Medicare recipients who
haven’t already done this open enrollment homework should start by rounding up
the following resources ASAP:
·
Medicare.gov —
particularly the Medicare Plan
Finder feature
·
2020 “Medicare &
You” handbook
·
Evidence of
Coverage document
·
Plan Annual
Notice of Change document
If you have a Part D
plan, also check out “How to Save
Hundreds of Dollars on Medicare Drug Costs” for step-by-step
instructions on shopping around.
If you decide to change
your Medicare health care or drug plan, tread carefully. Medicare rules can be
fussy and complex. There’s a lot at stake, including the possibility of losing
coverage, losing access to favorite providers and paying more money for
services you need.
Remember that you have
access to free one-on-one
Medicare insurance counseling and assistance via State Health
Insurance Assistance Programs (SHIPs).
3. Losing in-network access
Not all health care
providers accept all Medicare coverage. Medicare
Advantage plans, in particular, are known for often limiting
enrollees to a set network of certain doctors.
If you go to a health
care provider who isn’t in your plan network, you could face higher co-payments
or your insurer might refuse to pay any of the bill.
Or, if your current
plan’s network changes, with your doctor no longer part of the network, you
could get surprised by higher costs, even if you had been seeing that doctor
for years.
So, during open
enrollment periods, check with both your insurer and your health care providers
to be sure that those providers will continue to be in-network during the next
plan year. If not, consider whether you would be better off switching plans.
4. Losing Medigap coverage
People with Original
Medicare have the option to buy a supplemental policy from a private insurer,
often called a Medigap policy,
to cover some of the costs that
Original Medicare doesn’t fully cover.
If you have a Medicare
Advantage plan, you can’t buy a Medigap policy. So, if you decide to switch to
a Medicare Advantage plan from having Original Medicare with a Medigap plan,
you will drop the Medigap plan. But that is risky.
Only during an initial
Medigap enrollment period — when you first became eligible to sign up for
Medicare — are you guaranteed coverage by Medigap plans in your area. Then and
only then are insurance companies forbidden from denying you coverage or
charging you more money because of pre-existing conditions, says Reuters.
Afterward, in most
states, the door opens for insurers to ask about your health status.
So, depending on your
health and where you live, if you lose your initial Medigap coverage due to switching
to Medicare Advantage, you could end up paying significantly more for a Medigap
policy if you later decide to switch back to Original Medicare. Or you could be
barred from certain plans.
5. Getting hit with a tax penalty for HSA contributions
If you contribute to
your health savings
account (HSA) while on Medicare, you risk a tax penalty. The Medicare
handbook says:
“You can’t contribute to
your HSA once your Medicare coverage begins. However, you may use money that’s
already in your HSA after you enroll in Medicare to help pay for deductibles,
premiums (if you’re billed directly), copayments, or coinsurance.”
Stop making HSA
contributions six months before applying for Medicare, the handbook advises.
Or, if you still work and want to keep on contributing to an employer-sponsored
HSA after age 65, postpone applying for Medicare or Social Security benefits.
Do you have other
Medicare tips to share? Tell us in a comment below or on our Facebook page.
Marilyn Lewis contributed
to this post.
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