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The 8 Most Common Myths of Medicare
When it comes to Medicare, there is a lot of inaccurate information out there. If you are approaching your 65th birthday, you want to have your Medicare facts straight. Because what you don’t know—or misunderstand—could cost you. The common myths explained below will help you avoid costly penalties and missed enrollment times.
Myth #1: Medicare plans are only available through the federal government
Medicare is basic health insurance available to people 65 and older, as well as people under 65 with qualifying disabilities. Medicare is a government program that consists of four different parts. But only two of the parts are provided by the government:
The 4 parts of Medicare
Provided by the government (Original Medicare):
- Part A (provides coverage for hospital visits)
- Part B (provides coverage for medical services)
Provided by private insurance companies:
Part C (also known as Medicare Advantage plans)
Part D (provides prescription drug coverage)
What does this mean for you?
When you are eligible for Medicare, you can sign up to get Part A and B from the government. But in many cases this won’t be enough coverage. To complete your coverage, you may decide to sign up for a Medicare Advantage plan (Part C) that includes prescription drug coverage (Part D).
Myth #2: Medicare covers all your medical expenses
If you are new to Medicare, you might be surprised to learn that Original Medicare (Part A and B) is not a free service. Original Medicare only covers a portion of your medical costs. You are responsible for premiums, deductibles, coinsurance, and copayments. Many people discover that Original Medicare alone doesn’t offer enough coverage.
For example, with Original Medicare in 2020, you will typically pay:
- 20% of the total cost to see a doctor, after annual deductible of $198
- $1,408 deductible for hospital stays per benefit period
Plus, there is no limit on the amount you pay for out of pocket costs in a year, no coverage for annual hearing or eye exams, no coverage for Part D prescription drugs, and no emergency care outside of the United States.
In order to have the right amount of coverage, many people choose to enroll in a Medicare Advantage plan (Part C). Medicare Advantage plans provide coverage for services Medicare doesn’t cover and can help keep your costs lower by providing a limit on the amount you have to pay each year.
Myth #3: You are automatically enrolled in Medicare
You don’t automatically receive Original Medicare (Part A and B) once you become eligible. In order to get Original Medicare, you must enroll through the Social Security office. You can complete your enrollment online at socialsecurity.gov, by calling Social Security at 1-800-772-1213, or by visiting your local Social Security office in person.
Myth #4: You can apply for Medicare at any time
Most people become eligible for Medicare when they turn 65. But not everyone gets Medicare coverage at 65.
Retiring at 65
If you plan to retire at age 65, your chance to sign up for Medicare Part A and B runs for 7 months, which includes the 3 months before the month in which you turn 65, your birthday month, and the 3 following months.
Working past 65
Many people continue to work and receive health care coverage through their employers past the age of 65—meaning they don’t need Medicare coverage yet. In this scenario, you most likely qualify for a Medicare Special Enrollment Period. The Special Election Period allows you to defer your Medicare application until your current health care coverage through your employer expires, or you retire. At that point, you have an 8-month window to enroll in Medicare Part A and B.
There is a penalty for not signing up for Medicare at the right time
If you fail to enroll in Medicare Part A and B during your initial 7 month window, and don’t have equivalent health insurance through an employer or spouse, you can be subject to penalties in the form of increased premiums when you do enroll in Medicare.
Myth #5: If your spouse is enrolled in Medicare, you are automatically enrolled too
Unlike health insurance provided by an employer, Medicare does not allow you to receive coverage through your spouse. In order to receive Medicare Part A and B coverage, you must apply for it individually.
Myth #6: Medicare will notify me when it’s time to enroll
Medicare doesn’t tell you when it’s time to enroll. Unless you are already receiving Social Security at age 65, you’ll need to remember to sign up on your own. When you sign up depends on if you are retiring at age 65 or working past 65 and receiving health care coverage through your employer.
Myth #7: I can’t sign up for Medicare because of poor health
Original Medicare can’t reject you because you’re sick or have a pre-existing condition. You are eligible to receive Medicare Part A and B when you turn 65 or retire. There are penalties for not signing up at the right time and a possible additional cost depending on your income, but you can’t be denied Medicare coverage because of health issues. You’ll need to know when to sign up however, as you are not automatically enrolled in Medicare.
Myth #8: Medicare Advantage plans and Medicare Supplement plans are the same thing
Many people discover that relying on Original Medicare (Part A and B) doesn’t provide enough coverage. In order to have enough coverage, you may choose to enroll in a Medicare Advantage plan (Part C) or Medicare Supplement plan. These are two different types of plans.
A Medicare Advantage plan, such as an HMO plan, covers additional benefits not included with Original Medicare. Some Medicare Advantage plans include prescription drug coverage (Part D). With an HMO plan, you have an in-network primary care physician (PCP) who keeps track of all your care and refers you to specialists to help you stay healthy. This is one of the advantages of an HMO plan—having a team behind you to make sure you are getting the right care.
A Medicare Supplement plan fills in coverage gaps in Original Medicare. Generally, Medicare Supplement plans have higher monthly premiums than HMO plans, but you can see any doctor who accepts Medicare. With a Medicare Supplement plan, you need to purchase a separate prescription drug plan if you want prescription drug coverage.
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