3 Medicare Mistakes Way Too Many Retirees Make

Many older Americans specifically postpone retirement until age 65 so they can get health coverage through Medicare. And while Medicare is far from free, a lot of seniors would conceivably face higher costs in its absence.

Unfortunately, though, there’s a lot of misinformation about how Medicare works. And if you’re not careful, you risk falling into one of these traps that retirees make far too often.

1. Not enrolling on time

You don’t necessarily have to sign up for Medicare at 65, and enrollment may not be automatic. If you’re collecting Social Security at the time you become eligible for Part A, in that case, you should expect to be enrolled for hospital coverage even if you take no action. Otherwise, you’ll need to actively sign up for Medicare to get covered at 65.

Your initial Medicare enrollment window isn’t limited to the month you turn 65, though. You can enroll up to three months before that month, or up to three months after that month, and your enrollment will still be considered on time.

That’s important, because if you’re late enrolling in Medicare, you could face a hefty surcharge on your Part B premiums for life (because Part A is generally premium-free for enrollees, this penalty doesn’t apply to Part A). That’s a mistake you don’t want to make, because in addition to costing yourself more in terms of premiums, failing to enroll on time could also mean putting yourself in a situation where you don’t have adequate health coverage.

Incidentally, going too long without a Part D plan could result in surcharges as well. So it’s important to stay on top of Medicare deadlines.

2. Not participating in open enrollment

Each fall, Medicare enrollees are given an opportunity to make changes to their Part D or Advantage plan coverage. But the process of exploring different plans can be overwhelming, so some seniors inevitably decide to sit open enrollment out.

That’s a mistake you might regret, though. Even if your Medicare Advantage or Part D plan isn’t changing for the worse from one year to the next, that doesn’t mean there isn’t a better plan out there for you. So it always pays to use Medicare’s online plan finder to see what options you have.

Fall open enrollment runs every year from October 15 through December 7. It’s important to mark these dates on your calendar so you don’t miss out.

3. Not following your Medicare Advantage plan’s rules

There are certain benefits to choosing Medicare Advantage over original Medicare. For one thing, your overall out-of-pocket costs may be cheaper, depending on your health and specific plan.

And also, Medicare Advantage plans commonly offer supplemental benefits beyond what original Medicare covers. Most Advantage plans, for example, provide coverage for dental services, eye exams, and hearing aids, none of which are covered by original Medicare.

At the same time, if you’re on Medicare Advantage, you should expect to be limited to a narrower list of providers than what you’d get with original Medicare. And if you go out of network, you could face much higher bills. So pay attention to see who’s in network.

Along these lines, make sure you’re getting the right authorizations for the care you need. Medicare Advantage plans are notorious for requiring prior authorization for a range of tests and procedures.  Failing to obtain approval could leave you on the hook for expensive bills you can’t easily afford.

In addition, remember that if you want to keep your prescription costs down, you’ll need to make sure your pharmacy is in-network, too. Using an out-of-network pharmacy could actually result in your Medicare Advantage plan not covering your prescriptions at all. If there’s an element of your coverage you don’t understand, contact your plan administrator to get your questions clarified.