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
“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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