Avoiding Common Medicare Mistakes

Medicare open enrollment is upon us.  It can be a daunting time with choices to be made.  Choosing the best Medicare options that will work best for you can be complicated. This is the first of a three-part series which will help you avoid some common Medicare mistakes.

  • That magical birthday of 65 is approaching.  Do you have to do anything or does Medicare happen automatically?  Unfortunately, you will have to enroll during what is called your initial enrollment period.  The initial enrollment period begins three months before the month in which you turn 65 until three months after.  If you fail to sign up during your initial enrollment period, there is a general enrollment period from January 1 through March 31 each year.  But, if you enroll in January, February or March, your coverage doesn’t begin until July which impacts your monthly premiums for Medicare Part B which covers doctor visits and other outpatient service. 
  • There is often confusion about the special enrollment period.  If you are 65 or older, when you no longer are working and thus don’t have health insurance coverage, or when you no longer have insurance coverage through your spouse, you need to sign up for Medicare.  There is a special enrollment period that lets you sign up without being assessed a late enrollment penalty.  This special enrollment period is only available when you are no longer covered by job-based insurance or for eight months after you no longer have job-based insurance.  (Retiree health insurance of COBRA is not considered job-based coverage.) 
  • There is often a misunderstanding about insurance coverage when you are employed when you turn 65.  Some employers can designate Medicare as your primary health coverage when you turn 65 so you need to check with your human resources department or benefit department on this item.  Just because you are employed when turning 65 does not mean you should ignore Medicare enrollment.    You need to determine whether Medicare or your job-related insurance is primary.
  • Delaying your enrollment in Part B will cost you.  Your monthly Part B premium could be 10 percent higher if you don’t have job-based insurance. 
  • For every 12 months you delay in signing up for Part D (prescription drug costs), your premiums could be 1 percent higher.  If you have job-based prescription drug coverage but lose the same, you will have a two-month special enrollment period to sign up for Part D without a penalty. 

TO BE CONTINUED NEXT WEEK.

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Kay Sowa

About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Financial Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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