Most Seniors Are Making This Medicare Mistake

Photo by sebra / Shutterstock.com

As the leaves begin to fall and the nights grow longer, seniors across America have the chance to tweak their Medicare coverage into something that suits them better. But relatively few do so.

In fact, less than half of beneficiaries — 43% — say they review or compare Medicare coverage options annually, according to an analysis of data from the Kaiser Family Foundation (KFF).

The time to make such comparisons is now. Medicare open enrollment runs from Oct. 15 to Dec. 7.

There are two main types of Medicare: traditional Medicare, the government-managed program also called Original Medicare, and Medicare Advantage plans, which are all-in-one alternatives offered by private insurers.

During the fall open enrollment period, seniors with traditional Medicare have the chance to add a Medicare Part D stand-alone drug plan to their coverage, or change their existing Part D plan. Or, they can switch from traditional Medicare to a Medicare Advantage plan.

Seniors who have Medicare Advantage can change their existing Medicare Advantage plan during open enrollment. Or, they can switch from Medicare Advantage to traditional Medicare.

Both Medicare Advantage and Part D plans vary in cost and coverage, as these types of plans are offered by private insurance companies that contract with the federal Medicare program. As KFF states:

“Plans often change from one year to the next, which could lead to unexpected and avoidable costs for beneficiaries who do not review their options annually. Plan changes can also lead to disruptions for beneficiaries in Medicare Advantage plans, if their doctors do not remain in their plan’s network from one year to the next, or if their drug plan no longer covers one of their medications, or makes a change in their pharmacy network, or increases costs for covered drugs.”

Just a small percentage of Medicare beneficiaries switch plans each year, according to KFF. That might be because recipients are satisfied with their coverage. Or, it could mean seniors are missing out on more affordable or more appropriate coverage — or both — because they don’t shop around.

Getting the right Medicare coverage

As we have noted before, Medicare can be confusing. That’s especially true if you are new to the federal health insurance program reserved for seniors and people with certain disabilities.

For example, if you miss your first enrollment period, it can be costly:

“Generally, you become eligible for Medicare when you turn 65. But failing to enroll on time can trigger permanent financial penalties — we’ll get to those shortly — or delay benefits.”

For more, check out “4 Pitfalls for First-Time Medicare Enrollees.”

People who have used Medicare for years can make costly mistakes too. For more on the pitfalls to avoid, read “Don’t Make These 6 Medicare Plan Mistakes.”

Finally, if you are not yet eligible for Medicare, but plan to be one day — either soon or in the distant future — don’t assume that the government plan will cover all your retirement health costs. It will not.

That means you need to save money now for your health care needs later.

If you are eligible for one, opening a health savings account is a great way to pile up tax-advantaged savings that you can use to pay for health needs during retirement. Money Talks News contributor Miranda Marquit has a health savings account with Lively, and she loves it. For more on her experience, read “3 Ways a Health Savings Account Can Improve Your Finances.”

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
It’s Worth Paying Extra for These 14 Items

Here’s where to find the sweet spot at the intersection of price and quality.

11 Secret Uses for Everyday Items That Save Money

These are simple solutions for life’s irritations.

5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

21 Thrift Store Gems You Can Cash In On

Here’s what to look for at that overstuffed thrift store — and how you can make money from it.

16 Products That Solve Everyday Annoyances

These items put an end to the daily irritations that bug you the most.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

What a $15 Minimum Wage Means for Social Security

A federal minimum-wage hike could affect the Social Security system dramatically.

3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

10 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

This Is the Most Dependable Car Brand in the U.S.

This brand’s vehicles are least likely to give drivers repair headaches, according to J.D. Power.

7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Costly Health Problems That Strike After Age 50

As we age, our bodies wear down. Here is how to cut costs associated with some common ailments.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.