This may be a simple review for many, and I have covered these topics in more detail on different blogs, newsletters and social media posts. However, here is a brief summary of some important Medicare tidbits! These are some good reminders and maybe just a pulse check on your knowledge of basic Medicare coverage, costs and pitfalls. Let’s dive right in!
1. Medicare Is Not Free
I have often heard people say ‘My Medicare plan is great! I pay nothing’. If you hear a Medicare Beneficiary say that, sorry to spoil it, but they are wrong. Sometimes they just are not paying attention. Medicare Part A usually has no premium, but Medicare Part B has a monthly premium every beneficiary pays to the Social Security Administration. If you draw SS income, then it is automatically withheld from your SS income check, like a tax. If you are on Medicare Part B, but do not yet draw SS income, then SSA will send you a paper invoice in the mail.
2. Not Everyone is Auto Enrolled
When you decide to use your Medicare benefits (i.e. you do not have an active employer group health plan), most will have to actually apply for Medicare Part A and B through Social Security. It is not automatic when you turn 65 unless you draw SS income benefits. It truly is automatic for those folks. But many people are deciding to delay drawing SS income until their Full Retirement Age and thus are not automatically enrolled. In this case, you would need to apply online through your My SSA Account or go in person to your local SSA Field Office.
3. There Can Be Penalties for Late Enrollment
Don’t panic on this one as you approach 65. As long as you are covered on a creditable plan (i.e. an active employer group health plan), then you can delay Medicare enrollment with no penalties. However, if you don’t have other creditable coverage, then you can incur late enrollment penalties if you do not sign up for your Medicare Part B and Part D prescription drug plan. Those penalties will accumulate with every month and year you are not enrolled. And they last forever, so check in with your local agent to be sure you are okay.
4. Medicare Does Not Cover Everything
Original Medicare only covers necessary medical care and treatments at 80%. You will want additional plans to address the 20% left on the table. Additionally, Medicare does not cover dental, vision, hearing or any treatments considered cosmetic or non-traditional. Original Medicare also does not cover prescription drugs. You would need a stand alone prescription drug plan through an insurance company or an advantage plan with drug coverage.
5. Medicare Does Not Cover LTC
Medicare covers short term rehabilitation in a nursing facility, rehab center or at home, however, long term care is not covered. If a Medicare Beneficiary needs extended care in a nursing facility, or even long term caregiving assistance at home to remain in the home, they would need to pay privately, have long term care insurance or apply for State Medicaid or Medicaid Waiver. This is becoming an extremely big issue that can ruin hard working people’s retirement savings and finances. Estate Planning is essential early on. Ask for a referral! There are some wonderful experts out there to help plan!
6. Income Can Affect Premiums
There is a standard Part B premium that everyone pays SSA for Medicare, however, high income earners often have to pay more. There is a surcharge for several thresholds or levels above a standard income. The surcharge is for Part B and Part D. This comes as a surprise to many. In addition, your Part B premium can change year over year not only due to an across the board increase, but also if you have an income boost or decrease. Situations can be retirement (i.e. loss of income), sale of a rental property or business, inheritance, etc. (i.e. income boost).
7. Medicare is Not ‘Set It and Forget It’
Once you enroll in Medicare Part A and B, choose your supplemental benefits and start using your benefits, do not fall into the trap of thinking you don’t ever need to change your plan or have it reviewed. Drug plan formularies, especially, change drastically from year to year. Prices increase and benefits change as well. Sometimes, plans even leave the market completely. Beneficiaries are notified via mail of these changes; however, it is easy to see how it can be lost or thrown out. It is very important to have your plans reviewed each year by an expert. We do recommend local Independent Brokers. (Wink, wink…)
8. Medicare is Not International
Foreign countries do not recognize American insurance nor bill it. They don’t have to. If you are traveling internationally and need emergency care, you will have to pay cash up front. Most hospitals in other countries take credit cards. You will then get paperwork to bring back to the US to submit to your plans for reimbursement. Both Medigap plans and Advantage Plans have some international coverage for emergencies. However, we do recommend additional travel insurance every time you leave the country.
Please know there are situations and circumstances that can affect or alter these basic rules, so always check in with your trusted local professional on your Medicare journey and health needs! Let CDI know if you would like help!
CDI is here to help you manage your healthcare costs and find the best options for your unique situation. We can meet in person or virtually. Reach out if you would like more information. Email carrie@cdi-cares.com or check out www.cdi-cares.com for a contact page and other helpful blogs.