Medicare is the nation’s largest health insurance program for adults 65 and older. It is used by over 57 million Americans, and at times there is a lot of confusion about how it all works. Misunderstanding how Medicare works can end up with you making costly mistakes.
Myth: Medicare is free
Reality: The belief that Medicare is a government benefit, therefore seniors do not have to pay anything for it because they paid taxes. This is one of the biggest misconceptions because while Medicare Part A, which covers hospital services, has no premiums (as long as you paid Medicare taxes for 40 calendar quarters), Part B does.
Part B covers doctor visits and has a premium of $134 a month for new beneficiaries. The premiums are adjusted annually and can be as much as $428 for high-income beneficiaries. The premium is usually deducted from your Social Security benefits. If you sign up for a Medicare Part C Plan, also known as Medicare Advantage, you can also have a monthly premium for that depending on your plan..
Myth: Medicare will cover all health expenses
Reality: Medicare covers different types of healthcare, typically half of all medical and skilled nursing care expenses. Medicare Part A and B cover most hospital and medical expenses. But, there are a number of services that Medicare does not cover.
Medicare does not cover prescription drugs, standard dental, vision, or hearing care. For those services, you can choose to sign up for Medicare Advantage when the time permits, or purchase supplemental health insurance plan such as a Medicare Supplement plan. Medicare also does not cover long-term care, cosmetic surgery, or acupuncture.
Myth: Medicare enrollment is automatic when you turn 65
Reality: When you become 65, you are eligible for Medicare, but that does not mean you are automatically signed up for it. The only way to be automatically enrolled is if you are already receiving Social Security benefits before you turn 65, however Medicare Supplement, Medicare Advantage, and a prescription drug plans will still be up to you to enroll in.
If you are not receiving Social Security by the age 65, you will have to remember to enroll during your Initial Enrollment Period for Medicare, which is 3 months before you turn 65, the month of your 65th birthday, and the 3 months after that.
Myth: I can enroll in Medicare anytime
Reality: If you do not enroll during your Initial Enrollment Period, there will be some restrictions as to when you can enroll, followed by a penalty. You must wait to enroll until the next enrollment period which is between October 15 and December 7.
The penalties for late enrollment will be that your monthly premium will go up by 10% for twice the number of years you could have been enrolled but weren’t. For example, if you missed the opportunity to sign up for Medicare Part A, and file for it 2 years after you were eligible, you will have to pay a higher premium for 4 years. As for Part B, the premium will go up 10% permanently for every year you missed since eligibility.
Myth: Everyone pays the same for Medicare
Reality: Medicare offers the same benefits for everyone, but not everyone pays the same price for it. How much you worked and how much your income is will determine how much your premiums and deductible will be.
If you did not earn 40 work credits over your lifetime, then Part A isn’t free. You will owe up to $411 a month for Part A. Medicare Part B depends on your gross income.
Myth: Poor health will disqualify you
Reality: You cannot be rejected from Medicare coverage for having poor health or pre-existing conditions. You will not have to pay more due to pre-existing conditions. The Affordable Care Act implemented a pre-existing clause so insurers must accept members regardless of their health.
Because Medicare is linked to Social Security, if you qualify for Social Security benefits, then you will qualify for Medicare as well. But you need to apply for coverage because as stated before, it is not automatic.
If you have questions about how Medicare works EZ.Insure can help. We hire agents who are trained specifically for medicare in your region. You will be given your own advisor who can go over all the different affordable plans and quotes with you, and even help you sign up. We offer all of this free of charge. To get started enter your zip code in the bar above, email replies@ez.insure, and call 855-220-1144.
