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We’ve seen most Medicare mistakes in our 10+ years of working with Medicare beneficiaries, specifically with those turning 65 and going on Medicare for the first time. Without a doubt, it is overwhelming – the amount of information that you receive by mail, phone, in person, from friends/family, etc. is absolutely paralyzing if you allow it to be. In the last 10 years and through talking with thousands of people going on Medicare, there are five Medicare mistakes that we see and that stand out. These are common, yet they are crucial in that they can significantly and negatively impact your financial and physical health.

Not enrolling in Medicare Part B and D when first eligible.

When you first turn 65 and go on Medicare, you get an “open enrollment” period during which you can/should sign up for Medicare Parts B and D. The exception to this is if you are still working and covered by some type of group plans.

This initial open enrollment period for Medicare Part B and D is a 7-month period that begins three months before the month of your 65th birthday and includes the month of your 65th birthday and the three months after the month of your 65th birthday (see below).

If you make the Medicare mistake of not signing up for a plan during this initial enrollment period, you are subject to penalties at a later time unless you can prove that you are continuously covered by some other type of coverage (i.e. a group plan). Find out more about Medicare’s late enrollment penalties.
Not understanding the difference between Medicare Supplements and Medicare Advantage.

We see this one a lot because we deal with these type of plans on an everyday basis. Put simply, Medicare Advantage plans are not Medicare Supplements – they replace Medicare, they do not supplement it. There are many other differences in these two plan types, including where you can use the plans (Medicare Advantage has networks; Medicare Supplements do not) and your out of pocket costs (Medicare Advantage typically has a system of co-pays; Medicare Supplements do not in most cases).

Where this can be particularly problematic is when someone that has some pre-existing conditions chooses a Medicare Advantage when initially eligible for Medicare. If you choose a Medicare Advantage plan initially, then want to later switch back to original Medicare with a supplement plan, you do have to “qualify medically” to do so. So, this mistake of not understanding the differences can lead to being “stuck” in an Advantage plan for the long haul.
Not understanding the standardization of Medigap (Medicare Supplement) plans.

If you have chosen to pick a Medicare Supplement (Medigap) plan, you simply must understand the plan standardization. All plans go by the Medigap coverage chart, and benefits are the same from company to company. In other words, a Plan G with company X is the exact same and works the same way as a Plan G from company Y.

Although the coverage is standardized, rates can vary considerably. So, it is highly advisable to compare Medigap plans on the basis of price and company reputation, as other factors are equivalent. Just because you pay more does not necessarily you “get” more, if it is the same “letter” plan with a different company. That’s a myth and a potentially-harmful Medicare mistake.
Picking a plan because your friend or family member has it.

Granted, this is not necessarily a mistake – maybe your friend or family member is very thorough and didn’t make any of these other four mistakes when choosing his or her plan! However, it is essential to compare and choose a plan based on your own specific needs and the plans in your area.

This is especially true if relying on friends or family members in other areas or states. Although Medigap plans are Federally-standardized and coverage is the same, premiums and availability vary considerably from one area to another. For example, cousin Bob in Florida may have a good deal through company X; however, company X in Texas may be $50/month more than other companies that have better Texas rates.
Not using the Medicare preventive care benefits.

Medicare has increased its coverage of preventive care in recent years – it now covers many more preventive services than it did in the past. This includes the “Welcome to Medicare” visit that you get when you are turning 65, as well as other preventive care services/procedures.

To be proactive with your health, you should be aware of what is covered and “use” Medicare’s covered preventive care services to your advantage.

Overall, it can be a daunting task to go on Medicare. The abundance of true and untrue information out there can be paralyzing if you allow it to be. Use your common sense and avoid these five common mistakes in order to make wise, prudent choices for your health and financial future.

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65Medicare.org is a leading, independent Medicare insurance agency for people turning 65 and going on Medicare. If you have any questions about this information, you can contact us online or call us at 877.506.3378.

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The topic of Medicare reform has been in the national discourse for what seems like decades now. Reforming Medicare, without a doubt, is something that must be done in some form in order to sustain the program moving forward to future generations. However, how that will be done is a topic that is certainly up for discussion and debate.

paul ryan medicare proposal

Recent proposals center on the idea of “premium support” model. Under this type of model, Medicare beneficiaries would receive a set, standard amount of money that they could use towards the purchase of a traditional Medicare type program or a private plan. While this idea sounds appealing, it frankly is not a significant change from what we have now – where Medicare beneficiaries have the option of staying with traditional Medicare or choosing a privatized (and subsidized) version of Medicare called a Medicare Advantage plan (What is the Difference in Medigap and Medicare Advantage?).

Most calls for Medicare reform focus on not changing the program for current beneficiaries. In fact, President Trump repeated the refrain in his campaign that he did not want to touch Medicare. It is, indeed, a highly popular program among beneficiaries – a recent study by the Kaiser Family Foundation found that approximately 75% of people on Medicare are happy with it. Changing it out from under current beneficiaries may be the “third rail” in the current political environment; however, future beneficiaries are where the current Medicare reform talk comes in.

Speaker Paul Ryan and other advocates for Medicare reform have focused their proposals on those under age 55 currently. In other words, current beneficiaries and those over age 55 would be “grandfathered in” to the current plan structure, whereas those under age 55 would fall under a new system of “premium support”.

Where these plans miss the mark is in stating that there will be no impact on those over age 55 or those already on Medicare. In reality, that’s not how health insurance works. We need to look no further than the ACA as an example – the hope was that younger beneficiaries would sign up to offset those in higher age brackets. When that didn’t happen in the numbers projected, much higher premiums resulted. The same thing would/will happen with Medicare – if younger beneficiaries are separated from older beneficiaries, actuarially, then the costs for the older group would rise more rapidly than they otherwise would. Older Medicare beneficiaries, without a doubt, cost Medicare more per person, on average (see chart below).

medicare reform - older beneficiaries cost medicare more

What many people do not realize is that Medicare premiums and cost-sharing are directly tied to average Medicare spending per person. So, increases to the growth rate of Medicare spending per person (due to having no new, younger people to offset older beneficiaries), would have a consequential direct impact on Medicare premiums, deductibles and cost-sharing for today’s Medicare beneficiaries as well as those between the ages of 55 and 65.

In addition, changes to the Medicare deductibles and medicare reform necessary to cut debt cost-sharing would also have a detrimental impact on premiums for plans like Medigap, Medicare Advantage and Medicare Part D. Overall, it is disingenuous at best, false at worst, to say that current Medicare reform proposals would not affect current Medicare beneficiaries.

There are some options for offsetting these effects. Medicare premiums, deductibles and coinsurance amounts could be set in a different manner, so that they were not automatically tied to per-person spending. That is one option. Other options include providing some sort of subsidies or support to older seniors that are staying with Medicare to offset the anticipated increases. However, both of these would likely increase the overall Federal Medicare spending and offset the desired effects of the changes in the first place.

There are no easy answers in Medicare reform. That’s why it is has been a hot, divisive, political topic for years now. Without a doubt, something must be done if we are too prolong the viability of the program. However, the effects on current Medicare beneficiaries must not be ignored when we are seriously considering proposals to “cut off” current beneficiaries from future beneficiaries.

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Five Crucial Medicare Mistakes People Make When They Turn 65

Not enrolling in Medicare Part B and D when first eligible.

Not understanding the difference between Medicare Supplements and Medicare Advantage.

Not understanding the standardization of Medigap (Medicare Supplement) plans.

Picking a plan because your friend or family member has it.

Not using the Medicare preventive care benefits.

Medicare Reform: Premium Support Proposals Would Impact Current Medicare Beneficiaries