Medicare Mistakes Your Clients Should Avoid
Medicare is uncharted territory for most of the 10,000 seniors who come into the program each day. Lurking inside the program are pitfalls and traps, which can be costly unless steps are taken to avoid them. Knowledge and guidance are essential to having good financial and health security. Without knowing the rules, older Americans have been forced to either go for months without coverage or pay higher premiums for the rest of their lives. Prevention is the key to avoiding disaster. Help your clients avoid wrecking their coverage and wasting thousands with these top 10 medicare mistakes your clients should avoid.
1. Assuming You Don’t Qualify
Earning 40 credits through employment and payroll taxes ensures that your clients will not have to pay premiums for Part A hospital services when they join Medicare. Your clients do not need any work credits to qualify for Part B (doctor services, outpatient care, medical equipment) and Part D (prescriptions), provided that they are 65 or older, and a U. S. Citizen or a legal resident living in the U.S. at least five years. Seniors may also qualify for Part A benefits on their spouse’s work record, or they can pay premiums for them. If seniors wait to signup, until they’ve earned 40 credits, your clients may end up paying permanent late penalties.
2. Failing To Enroll in Part B On Time
It’s critical that your client sign up at the right time. If they don’t, they risk coverage delays, late penalties, and fees. Extra charges could be added to their premiums for all future years. If your clients, or your client’s spouse, have active health coverage, beyond age 65, from an employer with twenty or more workers, they can delay Part B enrollment without a penalty until the job ends. Otherwise, they need to sign up during their seven-month initial enrollment period, which includes the month they turn 65, three months before and three months after.
3. Believing You Don’t Need Medicare Part B
Part B is optional, so your clients are not obliged to enroll. But they should carefully check with their retiree plan to see how it fits in with Medicare. In many such plans, Medicare automatically becomes primary coverage and the plan pays only for a few services that Medicare doesn’t cover. In that case, if your clients fail to sign up for Part B when they’re required to, they’ll essentially have no coverage. COBRA allows them to continue on their present employer’s health care plan, for up to 18 months after their job ends, but it doesn’t allow them to delay Part B enrollment, without risking late penalties. In this situation, your client needs to sign up for Part B before the end of their initial enrollment period at age 65, or (if their job ended after that period) no later than eight months after they stopped working.
4. Thinking You Must Reach Retirement Age
For most people, the full retirement age is 66, which will gradually increase to 67 for those who were born after 1959. Seniors must sign up for Medicare at age 65 to avoid penalties unless they have health coverage from their own job or from their spouse’s current place of employment. Your clients shouldn’t wait until they retire, and are collecting Social Security benefits, to enroll in Medicare.
5. Failing to Enroll in Part D Because You Don’t Take Medication
Your clients must enroll in Part D before prescription drug needs are imminent. Some drugs cost thousands of dollars per month. Waiting to enroll could also cost additional late penalties permanently added to their Part D premiums.
6. Misunderstanding The Enrollment Period
Medicare open enrollment is Oct 15 to Dec 7 each year. It affects current members who want to change their coverage. However, if your clients are coming into Medicare for the first time, they get their own enrollment period, either around the time they turn 65, or up to eight months after extended employment, with coverage, ends for them or your spouse. If your client misses their personal deadlines, because they are waiting for open enrollment, they risk delayed coverage and permanent late penalties.
7. Picking The Wrong Part D Plan
If your clients pick a prescription drug plan, based on premium, name, or hearsay, they are taking a big risk. The best way to pick a plan is according to the specific drugs they take because Part D plans do not cover all drugs and copays vary widely.
8. Being Too Late To Buy Medigap
Medigap (Medicare Supplement) is extra coverage for most, or all, of your client’s out-of-pocket Medicare expenses, such as deductibles and copays. If they are at least 65, within six months of enrolling in Part B, they cannot be denied a Medigap plan and they cannot be charged higher premiums due to pre-existing conditions. After that time, they can do both. It’s wise to annually review their Medigap plan and pricing with an insurance professional.
9. Failing to Read Your Annual Notice
This important document comes in the mail each September if they’re enrolled in a medicare advantage plan (HMO or PPO) or a Part D drug plan. It specifies cost and coverage changes for the following year. Your client can use it to compare with other plans during open enrollment (Oct. 15 to Dec. 7) and switch plans if they want. Failing to read the notice, eliminates this opportunity.
10. Not Taking Advantage of Discounts
If your client’s income is limited, they may qualify for lower Medicare expenses (premiums, deductibles, copays, etc.). Two programs may help them. Under a Medicare Savings Program, their state pays the Part B premiums and maybe other expenses. Under the federal Extra Help program, they get low-cost Part D prescription drug coverage.
We hope these Top 10 Medicare Mistakes help your clients avoid the frustration of receiving inadequate insurance coverage.
Empower Brokerage is dedicated to helping you educate your clients on the insurance they need to get the most out of life. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions 888-539-1633.