Signing up for Medicare your first time can be stressful. Choosing a plan and figuring out costs can give anyone a headache.
Unfortunately, not doing your homework can hurt you even more, especially in your wallet. Here are three common mistakes Medicare newbies make that can prove especially costly.
Missing the deadline
It’s very important you sign up for Medicare when you’re supposed to. Your initial enrollment period is seven months, starting three months before the month when you turn 65 and continuing for three months after that.
If you don’t enroll during this period, you can do so during the annual general enrollment period, which runs January 1 through March 31 each year. Two drawbacks of waiting until general enrollment are that your coverage won’t begin until July, and premiums for Part B (medical insurance) and Part D (drug coverage) will be higher — penalties for signing up late.
For every 12 months you delay enrolling in Part B, your monthly premium may be 10% higher. The penalty won’t apply if you have job-based insurance or are still under your special enrollment period. For every 12 months you delay signing up for a Part D plan, your monthly premium may be 1% higher. These penalties can last as long as you have Medicare, unless you qualify for financial assistance.
Failing to compare plans
Whether you should choose Original Medicare of Medicare Advantage depends on your health, what your doctor accepts and where you live, among other factors.
Original Medicare is the program offered through the federal government. It includes Parts A and B, but not D. Medicare Advantage is a private insurance alternative. It provides Parts A, B and usually Part D benefits, as well as dental and vision care.
Research by the Kaiser Family Foundation showed half of all Medicare Advantage enrollees would pay more for a five-day hospital stay than those with Original Medicare because of the different cost structures. For a 10-day stay, 72% of Advantage enrollees would pay more.
“When you’re healthy, Advantage Plans are cheaper than original Medicare, but if you get really sick, that could change,” Karen Pollitz, a senior fellow with the Kaiser Family Foundation, told CNBC.
Assuming you can’t afford it
People with limited income might qualify for financial assistance to pay for health costs. AARP recommends:
- Medicare Savings Programs can help pay your Part B premium and might help with Medicare cost sharing, depending on the program. Contact your Senior Health Insurance Program at shiptacenter.org to learn if you are eligible for an MSP.
- Extra Help is a federal program that helps pay the costs of Medicare Part D prescription drug coverage. Contact the Social Security Administration at 1-800-772-1213 or visit ssa.gov to learn if you are eligible for Extra Help and to start an application.
- State Pharmaceutical Assistance Programs are offered in some states to help eligible individuals pay for prescriptions. Contact your SHIP at shiptacenter.org to learn if there is an SPAP in your state.
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