Most seniors plan to enroll in Medicare once they retire. However, a majority of soon-to-be retirees don’t completely understand Medicare and how it works. Misunderstandings surrounding Medicare and Medicare Advantage plans could lead you to spend more money than you need to or miss out on benefits that are important to you.
Although many people think they understand Medicare, there are a lot of questions that people tend to get wrong. Here are some of the most commonly misunderstood answers surrounding this crucial healthcare program.
1. Does Medicare cover everything I need?
Most people are used to employer-sponsored benefit plans, which typically include a wide range of benefits, including dental and vision coverage. Therefore, many mistakenly believe that these types of benefits will automatically be available once they transition to Medicare. Unfortunately, this isn’t the case.
The standard Medicare plan—Original Medicare, which encompasses Medicare Part A and Part B—does not include coverage for things like routine dental and vision services. If you enroll in Original Medicare thinking these services are covered, you might be facing an expensive bill after a routine visit!
Seniors who need this kind of coverage may find it by enrolling in a Medicare Advantage program. These plans typically expand on the benefits included in Original Medicare and are offered by private insurance companies. Not all Medicare Advantage plans will have the same benefits, though, so it’s important to do research to find the right plan for your needs.
2. Can I enroll in Medicare immediately after retirement?
Many people associate retirement with Medicare enrollment. However, this is only true if you retire after you turn 65 years old. Medicare is only available to seniors upon their 65th birthday (in addition to some younger people who are already receiving Social Security benefits). If you retire before you turn 65, you’ll need to find an alternative form of healthcare until you’re eligible for Medicare enrollment.
Medicare isn’t necessarily automatic after you turn 65, either. If you’re already receiving Social Security benefits, you’ll automatically be enrolled in Original Medicare during your Initial Enrollment Period (IEP) around your birthday. If you aren’t taking Social Security, you’ll need to make the conscious choice to enroll at this time, or else you may face penalties.
If you want to enroll in Medicare Advantage, Medigap or Medicare Prescription Drug coverage (Medicare Part D), note that these aren’t automatic, either. You’ll need to voluntarily enroll in your plans of choice during the IEP (Initial Enrollment Period).
3. Is my Medicare plan permanent?
A lot of seniors stress about choosing a Medicare plan when they turn 65 because they mistakenly believe that they are stuck with that plan for the rest of their lives. This is not true! No Medicare plans are permanent.
If you enroll in Original Medicare to start but want to switch to a Medicare Advantage plan later on, you’ll have an opportunity to do so during the Annual Enrollment Period. The reverse is also true—you can switch from a Medicare Advantage plan back to Original Medicare or switch between Medicare Advantage plans at this time. If you aren’t happy with your Medicare coverage, or your medical needs have changed over the years, you have the option to choose the plan that’s best for you year after year.
The only caveat to this has to do with Medigap plans. You can technically buy a Medigap plan at any time. However, you only retain “guaranteed issue rights” at certain times after you sign up for Medicare. These guaranteed issue rights ensure that a Medigap insurer cannot decline coverage or charge you a higher premium based on your medical history. If you purchase a Medigap plan during the six months following your Medicare Part B enrollment, you retain these rights. If you try to purchase Medigap outside of this period, you may be denied coverage or charged a much higher rate. Therefore, it’s beneficial to purchase the Medigap plan you think you’ll need later as soon as possible.
4. Does Medicare cover long-term or nursing home care?
Because Medicare is a healthcare program targeted for seniors, many people are surprised to learn that Medicare plans do not cover most long-term care or nursing home services. Although a large percentage of seniors require some level of long-term or custodial care as they age, these services are not included in Original Medicare or most Medicare Advantage plans.
Most Medicare plans will cover short stays in a skilled nursing facility or nursing home if you are recovering from an illness or injury and the care you receive is “rehabilitative”. Unfortunately, if you require custodial care—assistance with daily activities like bathing and dressing—these services will not be covered long-term, regardless of whether they’re administered at home or in a nursing home facility.
Seniors who anticipate needing long-term care when they get older are usually advised to save for this type of care separately or purchase long term care coverage.
5. Does Medicare have an out-of-pocket maximum?
Most traditional insurance plans have an out-of-pocket maximum for the year—the maximum amount of money you’ll spend for healthcare before your insurance plan covers the rest or provides you “catastrophic” coverage. However, Original Medicare does not have this same structure.
If you are enrolled in original Medicare, Medicare Part A and Part B only, there is no limit to how much you can spend out of pocket per year. Your Medicare benefits will continue to cover the same percentage they always have, even if you spend thousands of dollars in a calendar year. This can come as a shock to many seniors who may be facing extraordinary healthcare costs.
Medicare Advantage plans work differently. These plans do have out-of-pocket maximums, which are set by the federal government every year. The actual out-of-pocket maximum you’ll pay will depend on the Medicare Advantage plan you choose. Some plans stick to the set maximum, while others have a much lower maximum than the federal limit.
For this reason, it’s very important to keep out-of-pocket costs in mind when choosing between Original Medicare and Medicare Advantage plans.
Don’t go into Medicare unprepared
Medicare is an intimidating concept for many seniors. The program is often misunderstood, and making these mistakes could result in coverage gaps, limited benefits or higher healthcare costs. This is why it’s crucial for all seniors to do research on Medicare before selecting a Medicare plan. Even after you choose a plan for the year, continue to look into options to prepare for a potential change next year.
If you need assistance learning about your Medicare plan options, the SeniorCare Benefits team is here to help. Our agents are available to answer your Medicare questions, explore the benefits you’re eligible for and help you make an informed decision. We also represent a range of plans that can expand your coverage. Call us today at 1-888-230-0269 so one our agents can assist you.