Top 5 Mistakes to Avoid when Signing up for Medicare

You’re approaching retirement and the only big hurdle left until the finish line is signing up for Medicare. For some, this can be a big hurdle, but it doesn’t have to be. Read on the learn about 5 Common mistakes to Avoid When Signing up for Medicare to ensure a smooth transition into health care after retirement.

1. Not knowing when to do what

Medicare is not an easy thing to navigate on your own. In our experience the number 1 mistake people should avoid making is not knowing when to do what. Missing important deadlines and not signing up in time can cause lapses in coverage and cost you lifetime penalties. So let’s break it down:

Retiring at age 65: If you’re going to be retiring at age 65 you have a 7 month window to sign up. The 3 months before and after your birthday and the month of. So if you’re born in July you have from April-November to sign up

Retiring past age 65: If you’re going to be working past 65 then most people will enroll in Part A when they turn 65 and delay enrollment in Part B because of the monthly premium. You’ll want to start the Part B sign-up process 3 months before your date of retirement. This affords you enough time to deal with paperwork processing, Social Security and finding the additional coverage that best fits your needs.

Annual Enrollment Period: Each year from October 15th-December 7th is an important time of year. Medicare Advantage and Part D (Prescription) plans can change from year and it’s important to review your plan each year during this time to ensure you’ll have acceptable coverage for your specific needs.

Finding Additional Coverage: Original Medicare (Part A + B) doesn’t cover all of your costs. In fact, if you were to have a bad year medically and only have coverage through original Medicare you could be on the hook for a lot of money. That’s where additional coverage from either a supplemental + Part D or Advantage plan comes in. You’ll want to enroll in these plans and have the effective date be the same as your Part B start date.

First of the Month: It’s important to note that Medicare always starts on the 1st of the month. If you’re retiring and losing group coverage on July 16th, you’ll want your Part B and any additional coverage to start on July 1st to avoid a lapse in coverage for the last two weeks of July.

2. Enrolling in the wrong plan

A mistake we’ve often come across is when people signed up for the first plan they were presented or signed up simply because a friend had the same plan. While this may work out if you have minimal health needs, every person is different and it’s important to weigh all your options to decide which is best for your needs in retirement. We recommend plans based on your lifestyle, health needs, budget and retirement plans.

A Medicare Supplement plan would typically work best for individuals who are unhealthy and who visit the doctor frequently, live in multiple parts of the country or want to minimize unexpected medical bills. It’s important to note that you’ll need a standalone Part D plan if you choose a Supplemental plan to avoid a Part D penalty, even if you take zero medications. While Supplemental plans will typically cover more health care costs, they come with a higher monthly premium than an advantage plan.

A Medicare Advantage plan typically works best for individuals who are reasonably healthy, would rather pay more out of pocket (co-pays/deductibles) than pay more in premiums and who don’t travel often. Another benefit of Advantage plans is that they may include additional coverage such as Dental/Vision or ancillary benefits like discounted gym memberships. These plans also bundle your prescription drug coverage into one so make sure you’re medications will be covered under whichever plan you choose.

These are just general guidelines we use to help people decide which plan will work best for them. Again, every person’s needs are different so consider what’s important to you and base your decision on that.

3. Not reviewing your MAPD or PDP plan each year

As mentioned earlier, the Annual Enrollment Period is every year from October 15th -December 7th. Changes to Medicare Advantage plans and Part D plans are released to the public during this time. One of the biggest and sometimes costliest mistakes people make is letting their plan renew without reviewing the changes it may have undergone. If you are enrolled in an Advantage or Part D Plan then make sure you review your Annual Notice of Change that you will receive in the mail every September. Doctor’s getting dropped from your network and prescriptions being taken off the formulary are just a couple of possible changes that could happen to your plan. It’s important to review your plan every year during this time to ensure the services and medications you need will be covered. If it so happens that your plan has changed dramatically it’s during this period that you can switch to a new plan, no questions asked. However, if you want to switch from a Medicare Advantage plan to a Supplemental Plan you may face Medical Underwriting depending on the state you live in.

4. Enrolling in COBRA or Retiree plan and not Part B

Another mistake to avoid is signing up for COBRA or a Retiree Plan and not signing up for Part B. Even though you may have Medical coverage from a Retiree Plan offered through your employer or through COBRA, Medicare doesn’t consider these “creditable coverage.” If you’re using these as your primary form of insurance past age 65 and not enrolled in Part B you will face a penalty. So going back to knowing when to do what, make sure if you are going to be on a group retiree plan or COBRA you will need your Part B active as well in order to avoid the lapse in coverage penalty.

5. Not filing your MAGI to avoid surcharges

If you’re making more than $85,000/year filing single or $170,000 filing joint, you will unfortunately have to pay a surcharge on your Part B premium. Medicare typically looks back two years to determine your Part B premium. However, if a life changing event such as retirement, death or loss of an income producing property is going to bring your income under these thresholds then you can file for what’s called a “Medicare Adjusted Gross Income”. The form you will need to fill out is called an SSA-44 form. You will need to provide proof of loss, like a letter from your employer or death certificate, but once doing so your Part B premium will be adjusted down to the “normal” premium of $134/month.

Signing up for Medicare is a confusing process and the lack of clear and concise information available doesn’t make it any easier to navigate. Hopefully these 5 Mistakes to Avoid will help guide you in the right direction and make the transition to Medicare an easy one.

About Doctor’s Choice:

Doctor’s Choice is the premier service advocate for Medicare, making healthcare transitions easy for employers and their employees. Founded by a Brown University-trained Physician, they deliver best-in-class service to seniors before, during and after their transition to Medicare. Offering coverage across the country and tech-enabled personalized guidance through their Turbo Medicare Roadmap, Doctor’s Choice provides concierge-level service and healthcare advocacy to our members for life. For more insights on retirement trends and employer strategies for an aging workforce, follow Doctor’s Choiceon LinkedIn @DoctorsChoice, Twitter @DoctorsChoiceU, and Facebook @DoctorsChoiceUSA.