Turning 65 and becoming eligible for Medicare can relieve a lot of the financial pressure that comes with rising health care costs, especially in retirement.
However, there are a lot of misconceptions about Medicare that can lead to confusion, extra expenses, and penalties. It doesn’t help that you’ll likely hear different things from friends, family members, and even well-meaning neighbors.
This article will dispel the most common myths about Medicare coverage so that you can make the best decisions for your health and your budget.
Myth 1: Medicare is Free
There’s no such thing as a free lunch, and that includes Medicare. While Medicare Part A, which covers inpatient hospital care and care at a skilled nursing facility, is usually free, the other “parts” of Medicare require a monthly premium.
Further, not everyone qualifies for free Medicare, even Part A. To be eligible, at least one of these situations must apply:
- Work for ten years while paying Medicare taxes
- You have end-stage renal disease
- You are legally disabled
The latter two conditions are not dependent on age, so you can be under 65 and still qualify for Part A. Still, even though medical insurance through Medicare Part A doesn’t cost anything to have, you are still on the hook for deductibles, copays, and coinsurance.
The other three parts of Medicare do cost money, and they cover the following:
- Medicare Part B: Under Part B, Medicare pays for the bulk of outpatient care, medical services, and treatments, including doctor’s appointments, tests and x-rays, durable medical equipment, chiropractic adjustments, and home health services.
- Medicare Part C: Also called Medicare Advantage, Part C is a type of private health insurance that combines Medicare Parts A and B. Additional coverage, including health, dental, and prescription drugs, are covered with higher monthly premiums under a Medicare Advantage plan.
- Medicare Part D: If you need prescription drug coverage, you might want supplemental insurance coverage under Medicare Part D. There are multiple routes to prescription drug coverage, including Medicare Advantage plans with drug coverage or enrolling in Part D to fill the coverage gap.
Myth 2: You Can Sign up for Medicare Whenever You Want
You are not automatically enrolled in Medicare when you turn 65, and you also have a specific window with which you can apply through Social Security without penalties. The initial enrollment period begins three months before your 65th birthday month. It extends to three months after your birthday month, for a total window of seven months.
There are exceptions if you continue to work after your 65th birthday and have health coverage through your employer. Here, you will likely qualify for a special enrollment period.
The rules are slightly different for Medicare Advantage plans, which have a Medicare enrollment period during the first quarter of each calendar year. A Medigap plan (also called Medicare Supplement Plans) can be altered at any time during the year.
You are not locked into your Medicare contract for the rest of your life, fortunately. There is also an annual enrollment period (also called the Annual Election Period), where you can change your coverage to fit your needs. That period starts October 15th and ends December 7th.
Myth 3: I Can Get Medicare Through My Spouse
Unlike a health plan through an employer, spouses cannot add each other to their Medicare plans. Instead, each person has to individually enroll in a Medicare plan tailored to their needs.
Myth 4: Medicare Covers All Your Medical Expenses
When you have Medicare Parts A and B (referred to as Original Medicare), you have coverage for hospital stays and fairly comprehensive medical coverage. Still, there are gaps in Original Medicare, and it doesn’t cover the following:
- Dental benefits
- Vision care
- Prescription drugs
- Fitness
- Transportation services
For access to this coverage, many choose to enroll in Medicare Advantage plans or purchase Medigap plans, which provide extended coverage through private insurance companies and federal government subsidies.
Myth 5: It Doesn’t Matter Whether I Choose Original Medicare, Medicare Advantage, or Medigap Plans
As you’ve already learned, Original Medicare only covers Medicare Parts A and B. Original Medicare often has critical coverage gaps, including the lack of prescription drug coverage and other health care coverage and procedures.
To get additional benefits, the majority of Americans enroll in Medicare Advantage plans or Medigap plans. These two health plans also differ in cost and coverage.
At a glance:
- Medicare Advantage is an alternative to Medicare, and it often works like traditional health insurance companies where you must stay within a predetermined network of healthcare providers.
- Medigap supplements Original Medicare, and coverage extends to any doctor or facility that accepts Medicare.
- You can also add Part D coverage to your existing Medicare health plan, either by adding it to Original Medicare or enrolling in a Medicare Advantage Plan that provides prescription coverage.
This summary only scratches the surface of the differences. We delve into the details in our article: Medicare Explained.
Myth 6: Medicare Coverage Costs the Same for Everyone
Medicare costs vary depending on several factors, including:
- Your specific Medicare plan (including whether you choose a Medicare Advantage plan or a Medicare supplement plan)
- Your annual income
- The services you need each year
- Your overall health
- Whether you enroll in a Medicare program on time
Myth 7: There’s No Difference Between Medicare and Medicaid
While both Medicare and Medicaid are government programs, they have distinctive differences. While Medicare has age restrictions (and other limitations), Medicaid is available to people of all ages below a specific income level.
It is possible to be dual eligible for both Medicare and Medicaid programs if you are over 65 with limited income or meet other eligibility requirements.
Conclusion
Understanding the basics of Medicare coverage can go a long way toward ensuring you get the coverage you need at a price that doesn’t leave you financially vulnerable. Choosing a Medicare agent is an important step in your Medicare journey.