Once you reach the age of 65, Medicare covers the majority of your health care costs. But Medicare rules can be difficult to understand, and the associated mistakes can be costly. If you fail to choose wisely, you may end up paying higher premiums and incurring huge out-of-pocket expenses. Moreover, if you miss important deadlines, you may have a void in your coverage, miss out on tax benefits, and be required to pay a penalty for the rest of your life. Here are 10 Medicare mistakes married couples should avoid making.
Medicare Part D Plan
- Keeping Medicare Part D on Autopilot Mode: The Open Enrollment Period for Medicare Advantage and Medicare Part D plans is between October 15 and December 7 each year. This window is the ideal time to review the Medicare options you have. The coverage and costs may vary each year. Several plans increase premiums, enhance the share of costs, apply new restrictions to your medicine coverage, or require you to visit specific pharmacies for the best rates. If you have new medications or your existing medicines have turned generic, a different plan can be a better option for you.
- Purchasing the Same Medicare Part D as Your Spouse: There is no spouse-specific discount on your Medicare Part D prescription plan, and most people do not consume the same as their spouse. Remember that one plan offers coverage for you, while another may be more appropriate to meet your spouse’s medication needs.
- Going out of Network in the MA Plan: If you are having your coverage via Medicare Advantage (MA) from a private insurer or a reputable insurance provider like Texas Medicare Solutions, you may require using the network of physicians and hospitals under the plan to ensure the lowest co-payments. Note that some plans do not consider out-of-network providers at all, except in emergency situations. Hence, it is important to make sure your hospitals, doctors, and other health service providers remain covered under your plan year after year. You can switch MA plans during the Open Enrollment Period after comparing out-of-pocket expenses for your health status and under different plans in your region.
- Not Switching the MA Plans (If Needed) in the Middle of the Year: Besides the Open Enrollment Period, you can switch to a different MA plan between January 1 and March 31 every year. In the event of some specific life changes, such as shifting to a new address that doesn’t fall within your existing plan’s service area, you can switch plans outside of the Open Enrollment Period. Also, if you have an MA plan in your region with a five-star rating, you can switch to that plan at any time in the year.
- Not Choosing the Right Medicare Supplement (Medigap) Plan: If you buy a Medicare supplement in Texas within the initial six months of having Medicare Part B, you can choose any plan in your region, even with a preexisting health condition. However, if you attempt to switch plans after the said period, insurance companies in most states may deny you altogether or charge you more. Having said that, some states allow you to switch to a different plan, irrespective of your health status, and a few insurance companies even allow you to switch to any of their other plans without a medical exam.
- Forgetting to Sign Up to Medicare at the Age of 65 Years: If you are already obtaining Social Security benefits, you will automatically get enrolled in Medicare Part A and Medicare Part B once you turn 65. However, if you are not getting these benefits, you will need to sign up for Original Medicare. Online sign-up is possible for those who are at least 64 years and 9 months old—three months before your birth month to three months after your birth month. You can also delay signing up for Medicare Part B if you (or your spouse) are covered by your present employer.
- Not Signing Up for Medicare Part B When You Have COBRA/Retiree Coverage: Once you attain the age of 65, your primary health insurance is Medicare, and any other type of coverage is largely considered secondary, unless you (or your spouse) have insurance coverage via your present employer with a workforce of 20 or more individuals. Remember that your coverage must be with your present employer, and any other employer-related coverage like COBRA coverage, retiree coverage, and severance benefits is not regarded as your primary coverage once you turn 65. This means that if you fail to sign up for Original Medicare, you may have voids in your policy coverage, and you may be subjected to a lifelong late-enrollment penalty of 10% of your present Part B annual premium every year.
- Missing the Deadline to Enroll in Medicare Part B after Leaving the Job: If you are having your health care coverage via your employer with a workforce of 20 or more people, you do not require signing up for Original Medicare at the age of 65. You may choose to keep your coverage through your employer to avoid paying Medicare Part B premiums. However, you will need to sign up within eight months after leaving your job, or you may need to wait for the next open enrollment period to begin.
- Making Financial Choices that Could Raise Your Medicare Premiums: Most Americans pay the standard premium for Medicare Part B (which was $148.50 per month in 2021). However, if you fall into the group of high-earners, you may need to pay more Part B premiums. Additionally, you will have to pay a high-income surcharge for your Part D prescription coverage. If you lie close to the income threshold, be mindful of your financial activities that may raise your adjusted gross income and subject you to a high-income surcharge, like a Roth IRA rollover or withdrawing large amounts from your tax-deferred retirement accounts.
- Not Contesting the High-Income Surcharge for the Year of Retirement: Note that your Part D and Part B premiums will be higher if your income crosses a specific threshold. The U.S. Social Security Administration considers your latest tax returns to determine if you are subject to the surcharge. Thankfully, you can have the surcharge decreased in case your income has dipped since then due to some specific life-changing events like divorce, retirement, marriage, the death of your spouse, or reduced work hours. In such a situation, you can ask the Social Security Administration to use your more recent income instead.
