â€œA problem well-stated is a problem half solved,â€ said renowned inventor and businessman Charles F. Kettering.
With the number of options, choices and deadlines facing you when making Medicare decisions, itâ€™s not difficult to run into a few problems. In some cases, you may not realize it until itâ€™s too late.
So, what are some mistakes when choosing a Medicare plan?
Here are five of the most common:
Staying the Course Without Reviewing Your Current Medicare Coverage
You signed up when you were eligible. Thatâ€™s good. But inertia can be a dangerous thing. One of the most common mistakes is doing nothing after youâ€™ve signed up for your initial plan.
Medicareâ€™s Annual Enrollment Period (AEP) runs mid-October into December so you can adjust your coverage as your needs change. Like your needs, Medicare options change each year, as well as potentially the cost of those options.
Are you making good decisions about your Medicare coverage? The initial step is assessing your current â€” and future â€” needs. Then, review whether you should make changes during Medicare Annual Enrollment.
Finally, when your life changes, make sure to review whether you should change your plan. Special Enrollment Periods allow you to change your plan in instances such as moving to a new location or losing or gaining coverage. You also can switch if a plan in your area gains a five-star quality rating.
Not Asking The Right Questions When Assessing Your Needs
Whether youâ€™re new to Medicare or considering a change, are you asking the right questions about your coverage?
Having your questions ready will help when working with a SelectQuote licensed sales agent or conducting additional research.
- What type of coverage or plan do you currently have?
Determining what coverage is available to you is a great initial step. For example, there are important decisions to be made if you or your spouse have access to an employer plan.
- How do you live? Or what coverage do you need for your lifestyle?
- Do you like to travel?
- Will you need prescription coverage?
- What are the best options for preventative care?
- What if you have a pre-existing condition?
- Is your doctor or hospital in the network youâ€™re considering?
If youâ€™re wanting to use a Medicare Advantage Plan and your primary care physician and hospital are important to you, youâ€™ll want to make sure theyâ€™re part of the network for the plan you choose. If you donâ€™t, best case, your costs could increase and, worst case, some plans donâ€™t cover out-of-network providers unless itâ€™s deemed an emergency.
These questions scratch the surface. As you formulate your own list of questions, review â€œUnderstanding Medicare: Parts A Through Dâ€ and Medicare & You, the official Medicare handbook provided by the U.S. government.
Making Poor Decisions Signing Up (or Not Signing Up) When First Eligible
Once you turn 64, look into signing up for Medicare coverage. Youâ€™ll be eligible to sign up three months before you turn 65. That doesnâ€™t necessarily mean you should, but you will want to understand how your current coverage affects your enrollment in Medicare. Some of the most significant considerations here are:
- Forgetting to sign up and incurring penalties. This could happen to a person who has retiree or COBRA coverage and neglects to sign up for Part B upon turning 65. Despite this other coverage, Medicare is looked to as your primary coverage and if you donâ€™t sign up, youâ€™ll have gaps in coverage and likely incur a late-enrollment penalty.
- Conversely, if you or your spouse have coverage through a current employer, you may want to defer signing up for Part A and B. The reason? Financial impact. Part A is typically free but signing up for it while you have other coverage can negatively affect your ability to contribute to a health savings account (HSA).
- If youâ€™re in an employer plan, youâ€™ll also want to take a close look at your prescription drug coverage. Does it cover as much as a Medicare prescription plan? If not, you will want to consider signing up for the Medicare Part D coverage. Otherwise, you could face a late enrollment penalty and a higher premium down the road.
Assuming You and Your Spouse Are Equal in Medicareâ€™s Eyes
When insured through an employer, many families choose the same plan. But once youâ€™re ready for Medicare coverage, you and your spouse will each need your own plan.
From there, the temptation will be to select the same insurer or coverage as your spouse. While efficient from an administrative standpoint, it may not provide the best coverage. If your and your spouseâ€™s needs are different, consider separate plans best suited for each of you.
Prescription drug coverage may help illustrate this scenario. Itâ€™s unlikely you and your spouse need the same medications, yet some plans provide more favorable coverage than others for different drugs.
The Medicare Plan Finder can help you assess different medications, pharmacies and available plans.
You Donâ€™t Know Your Total Cost
According to a recent survey on retirement costs and investor beliefs, people should expect health care costs to be the second largest expense in retirement. The estimated spend for a married couple is $11,400. Do you know what your total annual spend is? And what line items account for the expenses?
When looking at paying more for Medicare Advantage plans or Medigap coverage to supplement Part B, it can often be tough to estimate whether paying up front in additional premiums or potentially later in out of pocket co-pays will result in higher expenses over the year.
That said, if itâ€™s close, know that co-insurance can really add up. According to Goodcare.com, an independent consulting firm specializing in the economics of health care, 90 percent of Medicare beneficiaries pay more out-of-pocket than they should.
Still, you can help influence your healthcare expenses. One common mistake people make that inadvertently increases their Medicare premiums is making financial decisions that push their adjusted gross income over $85,000 for single filers ($170,000 for joint). Exceeding those thresholds could result in premium increases up to five times the average.
Contact SelectQuote to Help With Your Medicare Choices
As you can see, you have a lot to evaluate when determining your Medicare plan. Lean on us for some help. SelectQuote licensed sales agents are available to answer questions. They can help simplify the process and select a plan thatâ€™s right for you.
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