Understanding Medicare: How to Avoid Common Mistakes

At Drexel & Co. Financial Planning, we know that quality, affordable health care is crucial for aging well. Medicare helps millions of older adults in the U.S., but it can be confusing and easy to make mistakes. Let’s simplify things and learn how to avoid common Medicare mistakes.

Why It’s Important to Stay Engaged

“Our health insurance system can be confusing for everyone,” says Dr. Carolyn McClanahan, a physician and financial planner. “It’s important to be an engaged patient to navigate the system effectively.”

Seven Common Medicare Mistakes and How to Avoid Them

Mistake 1: Not Understanding the Types of Medicare

Medicare can be complicated. There are different types, and each one covers different things. Here’s a quick guide:

• Original Medicare:
  • Part A covers hospital stays and short-term skilled nursing.
  • Part B covers doctor visits, screenings, vaccinations, and some medical equipment.
• Medicare Part D: Extra insurance for prescription drugs and some medical equipment.
• Medicare Advantage: An alternative to Original Medicare offered by private companies. It may include drug coverage and extra benefits.
• Medicare Supplement (Medigap): Extra coverage to help pay for costs not covered by Parts A and B. It’s not available if you have Medicare Advantage.

Make sure to understand these options to choose the right one for your needs.

Mistake 2: Postponing Enrollment

You can enroll in Medicare before you turn 65. Your initial enrollment period (IEP) starts three months before your 65th birthday and lasts until three months after. For example, if your birthday is in July, your IEP is from April to October. Enrolling early can help you avoid late penalties.

Mistake 3: Renewing Without Reviewing

Every year, you can change or renew your Medicare coverage during the open enrollment period from October 15 to December 7. Don’t just auto-renew your plan. Review it to ensure it still meets your needs and compare it with other plans for potential savings.

Mistake 4: Ignoring Your Circumstances

Your personal situation can affect your Medicare coverage. Consider:

• Employer-Sponsored Insurance: Know which plan pays first.
• Doctor Networks: Make sure your doctors are in your plan’s network.
• Local Providers: Ensure there are enough providers in your area.

Mistake 5: Overlooking Out-Of-Pocket Costs

Don’t just look at premiums; consider all out-of-pocket costs. Use Medicare’s plan comparison tool and talk to your financial advisor to choose a plan that fits your budget.

Mistake 6: Selecting the Wrong Drug Plan

Ensure your medications are covered by your plan. Check the formulary, prior authorization requirements, copays, and pharmacy networks.

Mistake 7: Missing Out on Financial Support

You might qualify for help with Medicare premiums through programs like Medicare Savings Programs or Extra Help. Check your eligibility online or by calling the Social Security Administration.

Need Help?

Understanding Medicare can be tough, but you don’t have to do it alone. At Drexel & Co. Financial Planning, we’re here to help you navigate your options and make informed decisions. Contact us for personalized advice and support.