Does it seem odd to be talking about Medicare Mistakes in January? Wasn’t open enrollment clear back in the fall? Why talk about Medicare now?
The reasons are simple. Here on the Blog, our goal is to present the most helpful and timely information we can to help you enjoy a safe, secure retirement – the kind where you can avoid being forced into institutional care, running out of money, or becoming a burden to those you love. Few things are more important to achieving those goals than staying healthier longer, and no single health-related program affects more retirees than Medicare.
Besides, during January alone, more than 300,000 baby boomers will turn 65 and become Medicare-eligible for the first time. Millions more will be able to change plans between now and March during Medicare Advantage open enrollment. In other words, there’s really no bad time to talk about Medicare.
We just came across a case in point: this helpful article from a website called Money Talks News. In the article, reporter Brandon Ballenger outlines what he calls the six “Medicare Mistakes to Avoid” if your goal is a healthier retirement. “Medicare health insurance can be confusing,” the article warns. “Beware these missteps — which can hike your costs.” Whether you’re shopping for different coverage or just planning ahead, this list is a good place to start. Also, we’ve added some great insights from Rajiv at the end of the article – so read on.
Medicare Mistakes: A Complex Program with Plenty of Pitfalls
“Retirement is supposed to be a time to enjoy the fruits from decades of labor,” Ballenger begins, “but managing your health care in your golden years can feel like a whole new job. And it’s not a simple one.”
He cites one obvious example as proof: the current official guide to Medicare, which, Ballenger says, “clocks in at more than 100 pages.” (Actually it’s 128 pages!) The sheer number of variables in costs and coverage can be daunting, even for a so-called Medicare expert.
“Unfortunately, it’s easy to make Medicare mistakes,” Ballenger warns. “At best, they can cost you extra cash. At worst, they could leave you with a gap in coverage. The following are some mistakes that people who are already enrolled in Medicare can’t afford to make with their coverage.”
Medicare Mistake #1: Relying on Friends or Insurance Agents for Advice
We all have a tendency to seek advice in the wrong places, and Medicare is a good example. “Medicare is complicated,” Ballenger writes. “It’s unfair to expect your friends to be experts, especially about the particulars of your own situation, which may be different than theirs.”
The same goes for those who are in the business of selling Medicare coverage. “Insurance agents may have the needed experience, but they aren’t unbiased,” the article adds. “You could be steered toward a plan that doesn’t work best for you.”
Fortunately, there is good, objective advice available, and one of the best sources is from programs offered to Medicare beneficiaries and their families through local State Health Insurance Assistance Program (SHIP) advisors. Here in Washington state, home to AgingOptions, that program is called SHIBA – Statewide Health Insurance Benefits Advisors, part of the Office of the Insurance Commissioner. Many senior centers offer free Medicare workshops that are worth checking out.
Medicare Mistake #2: Overlooking Some Benefits That Are Free
Getting good coverage is great, but taking advantage of that coverage can be another matter. “Certain medical services and products are free for Medicare recipients, at least in the sense that recipients do not have to pay anything extra, such as a copay or out-of-pocket fee, or meet a deductible to take advantage of these freebies,” Ballenger writes. “This is true regardless of which of the two main types of Medicare coverage you have: Original Medicare or Medicare Advantage.
He provides a link to an article in Money Talks News called “14 Things That Are Free With Medicare.” Here’s a partial list of services that generally cost you zero out of pocket:
*A “Welcome to Medicare” preventive visit
*An annual Wellness Visit
*Most vaccines
*Most cancer screenings
*Other health care screenings including HIV, diabetes, cardiovascular disease, and more
*Nutrition therapy
*Several categories of professional counseling.
Check out the article – you’ll be surprised at free benefits you never knew you had.
Medicare Mistake #3: Skipping Out on Open Enrollment
“Your plan’s coverage, costs and benefits can change from year to year,” Ballenger explains. “Fortunately, you get an opportunity during open enrollment periods to examine your options, make sure you’re still getting the best value and, if you wish, change your plan. This is true for people with Original Medicare, which is provided directly through the federal government, and those with Medicare Advantage plans, which are offered by private insurance companies approved by the government.”
People who bought separate prescription drug plans, also known as Medicare Part D plans, also get a chance to change coverage during open enrollment.
But the sad truth, as we’ve reported here on the Blog, is that barely one-third of beneficiaries take the time to check their coverage. This can lead to wasted money and unexpected surprises when the terms of your policy change without you noticing.
Open Enrollment Tools and Resources
Ballenger reminds us that the fall Medicare open enrollment period always runs from October 15 until December 7. There’s also a Medicare Advantage open enrollment period, which always runs from January 1 to March 31.
“During the open enrollment periods that apply to you, it’s a good idea to look at the various plans available locally, see what their premiums will be in the next plan year and learn your share of costs,” he advises. “You should also confirm that your favorite pharmacies, hospitals and medical providers still will accept your plan in the next plan year.”
In preparation for open enrollment, Ballenger suggests you gather the following resources:
*Medicare.gov — particularly the Medicare Plan Finder feature
*The latest annual “Medicare & You” handbook
*Evidence of Coverage document
*Plan Annual Notice of Change document
*(For those with Part D plans) “How to Save Hundreds of Dollars on Medicare Drug Costs”
Medicare Mistake #4: Not Confirming That Your Doc is In-Network
When choosing a plan, you may think you’ve found just the right one. But you may have overlooked one major problem: your doctor or other provider might not be part of your coverage network.
“Not all health care providers accept all Medicare coverage,” Ballenger writes. Medicare Advantage plans, in particular, are known for often limiting enrollees to a set network of certain doctors. If you go to a health care provider who isn’t in your plan network, you could face higher copayments or your insurer might refuse to pay any of the bill.”
This can happen even when you don’t expect it. “If your current plan’s network changes, with your doctor no longer part of the network, you could get surprised by higher costs,” Ballenger adds, “even if you had been seeing that doctor for years.”
The solution is a simple two-part check. During open enrollment, check with your insurer – covered providers are usually listed on the company’s website. Then, just to confirm, ask your health care providers if they expect to continue to be in-network with your preferred company during the next plan year. Unless you want to change doctors, if the answer is no, consider switching plans.
Medicare Mistake #5: Losing Out on Medigap Coverage
Medigap policies are supplemental policy sold by private insurers to those on regular Medicare. They’re designed to cover some of the costs that original Medicare doesn’t fully cover. But because Medigap plans (also called Medicare supplement plans) are so important, there are some rules you need to know.
“If you have a Medicare Advantage plan,” Ballenger explains, “you can’t buy a Medigap policy. So, if you decide to switch to a Medicare Advantage plan from having Original Medicare with a Medigap plan, you will drop the Medigap plan.” The problem is, once you give up a Medigap plan – or decide not to buy one during your initial eligibility period – it could be costly if not impossible to get that coverage back.
“Only during your initial Medigap enrollment period — when you first became eligible to sign up for Medicare — are you guaranteed coverage by Medigap plans in your area,” Ballenger writes. “Then and only then are insurance companies forbidden from denying you coverage or charging you more money because of pre-existing conditions.” Afterward, in most states, the door opens for insurers to ask about your health status. This can cost you higher premiums, or even trigger a denial of coverage.
There are some states where Medigap coverage rules are more lenient, so make sure you confirm the regulations that apply where you live.
Medicare Mistake #6: Contributing to an HSA After Becoming Medicare-Eligible
This mistake might seem only to apply to a few, but the Money Talks News article includes it. If you’ve been contributing to a health savings account (HSA), you’re not allowed to keep doing it while on Medicare. If you do, you risk a tax penalty.
As the Medicare Handbook explains, “You aren’t eligible to make contributions to an HSA after you have Medicare. To avoid a tax penalty, you should make your last HSA contribution the month before your Part A coverage begins.” That can be as early as six months before you apply for Medicare or Social Security, so make sure you check the tax regulations and adjust HSA contributions accordingly.
Rajiv’s Take: Choose Your Providers First
While Rajiv says these may be helpful points, he also believes choosing an insurance policy first is a classic case of putting the cart before the horse.
Rajiv asks, “Why tell people to find the policy first and then look for a doctor? The point of a policy,” he answers, “is to give you access to providers of your choice. That way you can have your health addressed the way you want it, not the way the system wants to deliver. Choosing a policy first is the wrong starting place.”
Instead, there are a few priorities which Rajiv suggests ought to guide your Medicare coverage decisions. “When you’re over 65, you want a geriatrician as your primary care physician,” he states. “You want a plan that will have no deductibles or co-payments, which means no bills to review or mess with. You want a plan that means you will never be out of network but can select any doctor you wish to see – not find yourself restricted to the ones the insurance company has on its roster.”
In other words, keep the main thing the main thing. “This means that you shop for providers first,” Rajiv emphasizes, “and then look for the policy by asking the providers which policies they like to work with most.”
Breaking News: Rajiv’s New Book is Here!
We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public. As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.
You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.
Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.
Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.
Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!
(originally reported at www.moneytalksnews.com)