Don’t Make These 6 Medicare Plan Mistakes

Senior filling out medical paperwork with caregiver
fizkes / Shutterstock.com

This story originally appeared on NewRetirement.

No one is born understanding how Medicare works. And just because friends or family have navigated the system well doesn’t mean you won’t hit a snag.

A solid retirement plan includes a good working knowledge of what to expect from Medicare. Because the more you know now, the less likely you’ll be to encounter these common mistakes.

1. Believing that you won’t qualify

retirees worry about Social Security
Monkey Business Images / Shutterstock.com

Although Medicare requires that you meet a certain number of years in the workforce, some people mistakenly believe that they didn’t work enough and that they won’t qualify for Medicare.

All that you need are 40 credits through payroll taxes. That amounts to about 10 years of work. If you meet that requirement, you won’t pay any premiums for Part A, which mainly covers hospital stays. You may also qualify for Part A based on your spouse’s earned work credits.

Further, you don’t have to meet any work requirements to qualify for Part D, which covers prescriptions, or Part B, which covers doctor visits, outpatient care, and medical equipment, says AARP’s “Ask Ms. Medicare” columnist Patricia Barry. As long as you’ve reached age 65, are an American citizen or legal resident and have lived in the state for the past five years, you qualify.

2. Enrolling at the wrong time

Senior Man
Serghei Starus / Shutterstock.com

Although most people qualify, you still have to enroll at the right time. For example, if you wait too long to enroll in Part B — which generally covers doctors’ services, outpatient care and medical equipment — you could face a surcharge, which is added to all premiums from then on.

AARP explains that waiting to enroll can also extend your waiting period before coverage begins. Kiplinger personal finance editor Kimberly Lankford explains: “You have a seven-month window to sign up – from three months before your 65th birthday month to three months afterward.” Don’t miss your window.

Choosing the right time to enroll also means understanding the difference between the way Social Security benefits work and how Medicare works. You can delay applying for Social Security benefits until your full retirement age, which is around 66, or even longer — benefits increase with delays up to age 70.

Meanwhile, your Medicare enrollment happens at 65, and waiting isn’t a good plan for that program.

3. Thinking that Medicare covers all of your medical expenses

senior surprised by Medicare costs
TeodorLazarev / Shutterstock.com

Medicare only covers the basics. Many retirees are very surprised to learn that there are huge out-of-pocket medical expenses in retirement.

In fact, experts estimate that the average retired couple will spend somewhere between $250,000 and $450,000 on medical expenses.

4. Not choosing a Part D plan

A worried senior black woman sits on her couch
Monkey Business Images / Shutterstock.com

You might not take prescription medications now, but you never know what the future holds. Why should you enroll? “Because you don’t have a crystal ball and can’t be sure that you won’t get some unforeseen illness or injury that takes expensive drugs to treat,” says Barry.

Some people opt not to enroll in Medicare Part D, which covers prescription drug costs, and end up regretting that decision later. Enrolling as soon as possible helps you avoid unnecessary fees and the possibility of no coverage when you need it.

Like most insurance, you can’t put off signing up until you’re in a desperate situation where coverage is critical. If you still think Part D is overkill, at least choose a low-premium plan so that you aren’t on your own in case of an emergency.

AARP also cautions against choosing a Part D plan based only on what it costs or because someone you know has the same plan.

5. Missing the Medigap window

Unhappy senior woman
Asier Romero / Shutterstock.com

Medigap insurance covers out-of-pocket expenses that Medicare doesn’t cover. The expenses can be copays and also your deductibles. Medigap is obtained from private insurers but helps protect you from paying more at the time of service.

If you sign up for a Medigap policy, you’ll need it within six months of enrolling in Medicare Part B.

Missing the Medigap window leaves you responsible for out-of-pocket expenses, but it also does something more. If you choose a plan at the right time, you can’t be turned down. But if you miss the window, you could face higher premiums or be turned down.

Mistakes in Medicare enrollment aren’t just inconvenient. They can also be expensive. You could pay more for certain things, such as Medigap insurance, or you could face penalties that stay with you permanently.

6. Not reevaluating coverage every year

Senior protecting his piggy bank from a thief
pathdoc / Shutterstock.com

With Medicare, you need to sign up for the right supplemental policies in the beginning, but then you really should reevaluate your policy at least once a year. Your health needs will evolve and the insurance plans change often.

As such, a policy that was good for you one year might be expensive and not offer the coverage you need the next year.

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

Read Next
10 Expenses You Should Not Put on a Credit Card
10 Expenses You Should Not Put on a Credit Card

Sometimes it’s simply safer to keep the plastic tucked away.

7 Effortless Ways to Make Extra Money
7 Effortless Ways to Make Extra Money

In the digital age, new ways of earning cash crop up all the time — and some require next to no effort on your part.

The Best and Worst States for Raising a Family in 2021
The Best and Worst States for Raising a Family in 2021

These states have big advantages or disadvantages when it comes to choosing a home for your family.

8 Products to Reduce Anxiety and Stress
8 Products to Reduce Anxiety and Stress

Current events have you feeling anxious? These Amazon products can take the edge off.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

You probably don’t realize these items are worth decent cash.

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
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
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
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
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
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
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
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
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
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?
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
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
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
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
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
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 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 Hidden Sections of Amazon Every Shopper Should Know
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 Kirkland Signature Items to Avoid at Costco
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 Costly Health Problems That Strike After Age 50
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.