Healthcare is one of the single most expensive and important parts of your retirement. Most Americans donâ€™t fully understand how Medicare works. Misunderstandings surrounding Medicare can be costly, so here are 10 of the most common Medicare myths. Itâ€™s checkup for your health and your money.
Myth 1 – Medicare and Medicaid are the Same Thing
They sure sound alike, but Medicare and Medicaid are actually two totally different programs.
Medicare is a federal program that provides insurance to people ages 65 and older. Some people with disabilities or people who are on dialysis may also qualify for coverage. Since it is an insurance program, it runs similar to other health insurance coverage. Patients are usually responsible for deductibles and premiums, depending on your coverage.
Medicaid is an assistance program that offers healthcare coverage for certain people of all ages based on various factors. Coverage is available to some low-income families, children and pregnant women. Medicaid can also cover senior citizens and some people with disabilities. Because it is a joint program between federal and state, Medicaid looks different in each state.
Myth 2 – Medicare Covers all of My Expenses
While Medicare can cover a lot of your expenses, it does not cover everything. Part of what you pay depends on the what parts of coverage you have selected. If you only have Part A and Part B, you will not be covered for dental, acupuncture, long-term care, among other things. Additionally, like health insurance that you might have had before your retirement, you are often responsible for premiums and deductibles with Medicare.
Myth 3 – My Prescriptions are Covered by Medicare
This statement can be true, but it isnâ€™t always. Medicare Part A and Part B are typically what people mean when they refer to Medicare. In that case, your prescriptions are not covered because Part A is hospital insurance and Part B is medical insurance. If you want drug coverage, you will need to enroll in Medicare Part D or a Medicare Advantage Plan.
Myth 4 – Everyone Pays the Same Cost for Medicare
While Part A and Part B coverage will be the same or similar for most people, there is a lot of variability in what other aspects of Medicare might cost. If you are choosing Part D coverage, your plan choice will impact your premium. Your income will also affect the cost of your Part D coverage. Individuals or couples with incomes over a certain threshold are responsible for paying a monthly premium plus an income-related monthly adjustment. Costs can also be impacted by choosing a pharmacy that is in-network or out-of-network and by choosing drugs that are or are not on your planâ€™s formulary.
Myth 5 – Medicare and Medicare Advantage Plans are the Same
Itâ€™s understandable how this myth came to be. Medicare and Medicare Advantage Plans are two different things despite how similar they sound. Medicare Advantage Plans are actually a type of health coverage that is offered by a private insurance company. Because that company contracts with Medicare, the federal program, it gets to use Medicare in its name.
Medicare Advantage Plans are sometimes called Part C plans because they typically cover Part A (hospital coverage), Part B (medical coverage), and Part D (drug coverage). Because these plans are created by private companies, the costs can and do vary widely. Thatâ€™s why itâ€™s important to determine which plan is right for you and to shop for coverage regularly. However, it is also worth noting that these private companies also have to follow certain rules that are set by Medicare.
Myth 6 – Since I Have Medicare, I Have Long-Term Care Insurance
This myth can be costly. Long-term care is one of the most consequential expenses anyone will face. Â In 2018, the average monthly expense for long-term care ranged from $1,000 to over $8,000. Assuming that your expenses are covered because you have Medicare is a critical mistake. The only time Medicare offers coverage in regards to long-term care is if medical care is needed.
Myth 7 – My Medicare Coverage is Automatic
Coverage can be automatic, but it depends on each person. If you are already receiving Social Security benefits, then you will be automatically enrolled in Medicare Part A and Part B when you turn 65. If you arenâ€™t receiving benefits, then you will have to sign up for Part A and Part B, in addition to any other coverage you might want or need. The majority of people enroll in Part A at age 65 because their work history allows them to receive Part A coverage premium free. Depending on your situation, though, you might want to wait to enroll in Part B.
Myth 8 – I can Sign Up Whenever I Want
You might be delaying Social Security benefits to reap certain advantages. As a result, many people mistakenly assume that there are the same financial benefits to delaying Medicare enrollment. But that isnâ€™t necessarily true for Medicare, especially Part B.
If you are currently receiving medical coverage due to a work or union plan or from your spouseâ€™s plan, you may want to delay enrolling in Part B to avoid paying more premiums. However, the problem with delaying enrollment without doing your research first is that you donâ€™t want a lapse in coverage. And if you donâ€™t qualify during a Special Enrollment Period, you might end up paying a late enrollment penalty.
If youâ€™re turning 65, youâ€™ll enroll during Medicareâ€™s Initial Enrollment Period (IEP). IEP is the seven month period surrounding your 65th birthday. Enrollment begins three months before your 65th birthday and ends 3 months after.
Myth 9 – Iâ€™m Retired so Medicare Open Enrollment Doesnâ€™t Matter
While your days of visiting with Human Resources or your benefits department are long gone, open enrollment time is still significant. In fact, doing your due diligence during open enrollment can come at a huge cost savings to you. Open enrollment typically runs from mid-October through early December. During that time, you can compare plans. Not only does this let you possibly reduce your premiums, you can also make sure that your plan offers a convenient network of providers and have a high performance rating.
Myth 10 – Medicare is Going to Disappear
Like virtually all federal programs, Medicare is subject to change. How it will change is often the subject of speculation. The fact of the matter is that while Medicare is definitely a political talking point at times, no one knows for certain if, when, or how Medicare will continue to evolve. Instead, the best thing to do is to continue to stay informed by visiting credible sites, like the official Medicare site, and to do your part to understand your specific coverage, premiums, and deductibles.
Contact SelectQuote for Help With Your Medicare Options
Medicare can feel complicated and overwhelming if you only listen to the myths swirling around the Internet, family dinner tables, and coffee shops. By doing a bit of reading and research, it because much easier to separate the fact from the fiction. Doing so can offer real advantages when it comes to your wallet and your wellbeing.
A SelectQuote licensed agent can help you make sense of your Medicare options. SelectQuote agents shop dozens of insurance companies to compare rates and benefits so you get a plan that works best for you.
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