Do you know the 11 most com­mon Medi­care mis­takes to avoid?

Record Observer - - Senior Satellite -

Medi­care rules can be com­pli­cated and miss­ing a dead­line can be costly. It is im­por­tant that you un­der­stand the op­tions and what mis­takes not to make.

Medi­care has four parts. Part A, re­ferred to as orig­i­nal Medi­care, fo­cuses on hospi­tal cov­er­age. Part B is med­i­cal cov­er­age. Part C (also called Medi­care Ad­van­tage) is a dif­fer­ent way of putting Parts A and B into one plan, of­fered by pri­vate com­pa­nies. Part D is pre­scrip­tion drug cov­er­age.

So, what are the 11 most com­mon Medi­care mis­takes to avoid?

1. Not re­view­ing your Part D Plan an­nu­ally

Medi­care Part D is a headache for many to keep on top of. But re­mem­ber th­ese key points:

• Open en­roll­ment runs from Oct. 15 through Dec. 7 every year.

• Dur­ing open en­roll­ment it’s es­sen­tial to re­view op­tions be­cause there might be changes to your cur­rent plan, mean­ing your cost, cov­er­age, for­mu­la­ries, or Net­work Phar­ma­cies may change.

• Make sure you check if any drugs you’re on have gone generic, as you might get a nice price re­duc­tion.

• Medi­care also helps you to com­pare plans. Check out the var­i­ous links on Medi­care. gov for more in­for­ma­tion, guid­ance and price com­par­i­son tools.

• Need help? Call your lo­cal SHIP Coun­selor or an in­surance bro­ker who spe­cial­izes in Part D Pre­scrip­tion Plans.

2. Pick­ing the same Part D plan as your spouse

Not all Part D plans are alike, and just be­cause a plan works for you it might not be the same for your spouse, who may be tak­ing dif­fer­ent pre­scrip­tions. Use the Medi­care Plan Fin­der, SHIP Coun­selor, or In­surance Bro­ker to de­ter­mine your out-of-pocket costs on each plan. Also keep in mind that some plans re­quire the use of spe­cific phar­ma­cies.

3. Go­ing out of net­work on pri­vate Medi­care Ad­van­tage plans

If us­ing pri­vate Medi­care Ad­van­tage plans, sim­i­lar to PPOs or HMOs, you’ll need to use the net­work of doc­tors and hos­pi­tals within the plan to get the low­est co­pay­ments. Be aware that if you go out of net­work, there may be no cov­er­age at all.

4. Not know­ing how to switch Medi­care Ad­van­tage plans any­time if needed

Even out­side the an­nual open en­roll­ment pe­riod, it’s pos­si­ble to switch plans for life-chang­ing events. One ex­am­ple of a life-chang­ing event is you move out of the plan’s cur­rent ser­vice area. There are other times you may switch plans. A cou­ple of ex­am­ples are you may switch to a five-star plan, from Dec. 8 through Nov. 30 of each year. Also, from Jan. 1 through Feb. 14 (An­nual Disen­roll­ment Pe­riod), you can switch from a Medi­care Ad­van­tage Plan to tra­di­tional Medi­care plus a Part D pre­scrip­tion-drug plan.

5. Not con­sid­er­ing Medi­gap within 6 months

Once en­rolled in Medi­care Part B, you have six months to buy any Medi­care sup­ple­ment plan in your area even if you have pre-ex­ist­ing con­di­tions (and at age 65, who doesn’t?). But af­ter six months, in­sur­ers can re­ject you or charge more de­pend­ing on your health. It de­pends on your in­surer’s poli­cies.

6. Not opt­ing for Medi­care when you turn 65 (most of the time)

For­ever young, so who needs Medi­care? Well, you’re smart to take ad­van­tage of what the gov­ern­ment is giv­ing you, of­ten for free. If you are get­ting So­cial Se­cu­rity al­ready when you turn 65, you will au­to­mat­i­cally be en­rolled in Medi­care Part A and Part B. But if you aren’t re­ceiv­ing So­cial Se­cu­rity ben­e­fits, you will have to act on your own to sign up. You will have a seven-month pe­riod to sign up for Medi­care, which runs from three months be­fore the month you turn 65, the month you turn 65 and three months af­ter. There are rea­sons to de­lay: for ex­am­ple, you or your spouse have a full-time job and al­ready get health care cov­er­age as a part of your em­ploy­ment ben­e­fits.

7. Not sign­ing up for Part B if you have re­tiree or CO­BRA cov­er­age

Again, there are many tricky steps in the Medi­care signup game. Un­less you or your spouse are re­ceiv­ing in­surance through a cur­rent em­ployer (who has 20 or more em­ploy­ees), Medi­care is con­sid­ered your main health in­surance cov­er­age. Re­tiree cov­er­age, CO­BRA or sev­er­ance ben­e­fits are NOT pri­mary, and if you don’t sign up for Medi­care, you might have gaps in cov­er­age. You may also be sub­ject to a Part B En­roll­ment Penalty and have to pay more for your Part B Pre­mium. So pay at­ten­tion.

8. Miss­ing the Part B en­roll­ment dead­line af­ter leav­ing your job

If you still have in­surance through a job when you turn 65, that’s fine. Nor­mally, you do not need to sign up for Part B but check with your Hu­man Re­sources Depart­ment to see how your plan works with Medi­care. How­ever, within eight months of leav­ing your job, you need to sign up for Part B or you might have to wait for the next en­roll­ment pe­riod, mean­ing a gap in cov­er­age. Then there is also the pos­si­bil­ity of a 10 per­cent life­time late-en­roll­ment penalty.

9. Ig­nor­ing in­come thresh­olds

The Stan­dard Part B Pre­mium amount is $121.80 (or higher de­pend­ing on your in­come). How­ever, most peo­ple who get So­cial Se­cu­rity ben­e­fits will con­tinue to pay the same Part B Pre­mium amount as they paid in 2015. The Na­tional Av­er­age Part D Pre­mium is $34.10. Th­ese amounts go higher de­pend­ing on your ad­justed gross in­come. So if you are bring­ing in more than $85,000, you should check the In­come Re­lated

Medi­care Ad­just­ment Amount for Part B and the In­come Re­lated Monthly Ad­just­ment Amount (IRMAA) for Part D. Be mind­ful when you are with­draw­ing from tax-de­ferred ac­counts that you don’t go over the in­come thresh­old if pos­si­ble.

10. Not fight­ing sur­charge changes for the year you re­tire

The So­cial Se­cu­rity Ad­min­is­tra­tion uses your tax re­turns from the most re­cent two years to de­ter­mine if you are sub­ject to an in­come sur­charge (see above), that is, you are mak­ing more than $85,000 a year. But you can protest it if you prove life-chang­ing events, such as di­vorce, death of a spouse or re­tire­ment.

11. Not mind­ing your HSA con­tri­bu­tions

You can’t con­trib­ute to HSAs if you are get­ting Medi­care, but if you or your spouse have health in­surance through a job (with 20 or more em­ploy­ees) and haven’t ap­plied for Medi­care or So­cial Se­cu­rity ben­e­fits, you still can con­tinue to add to your HSA. That said, be care­ful about con­tri­bu­tions in the year you leave your job and sign up for Medi­care, as your HSA must be pro­rated by num­ber of months on Medi­care.

Mike Zim­mer is Pres­i­dent of Bay State In­surance Agency Ltd in Cen­tre­ville. Zim­mer is avail­able to an­swer your ques­tions or speak to your groups re­gard­ing Medi­care, Medi­care Ad­van­tage, Medi­care Sup­ple­ments and Medi­care Part D (Pre­scrip­tion Plans). He may be reached at 410-758-1680.


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