After you retire and no longer have medical insurance through your employer, you should sign up for Medicare. Medicare can cover the majority of your health care costs after you turn 65 years old. However, Medicare’s rules can be confusing to understand. If you don’t choose the correct options for coverage, you could end up with expensive out of pocket costs. If you want to prevent making Medicare mistakes, continue reading.
1. Allowing Medicare Part D to Stay on Autopilot
Open enrollment for Medicare part D and Medicare Advantage plans take place from October 15th to December 7th each year. This is the best time to review all your potential options. The cost and the amount of coverage can change year to year. Premiums can increase, your out of pocket costs for medications can increase, or require you to use a different pharmacy for your medications. It’s important to take advantage of open enrollment to see what plans will work best for you for the coming year.
2. Going Out of Network
If you decide to have a private Medicare Advantage plan, you should stick to the medical providers that are in the plan’s network to get you the lowest co-payments. Some plans won’t cover any out of network providers, unless it was an emergency. By going out of network purposely, you can set yourself up for expensive out of pocket costs. Be sure to check your list of in network providers to prevent going out of network.
3. Not Picking Out The Best Medigap Plan for You
If you purchase a Medicare supplement plan to cover anything that is not covered under your other Medicare insurance within six months of enrolling in Medicare Part B, you can get a plan in your area, even if you have a pre-existing medical condition. If you try to switch plans after six months, insurers in most states can reject you or even charge you more because of your pre-existing condition. You need to pick a plan carefully that will cover the providers and medication you need.
4. Forgetting to Sign Up for Medicare at 65
If you are already getting Social Security benefits, you are automatically enrolled in Medicare Part A and B when you turn 65 years old. However, if you are not receiving Social Security, you need to sign up for Medicare yourself. You only have a seven month window to sign up for Medicare; 3 months before you turn 65 to three months after your 65th birthday. You can easily sign up online, so be sure you don’t miss the window.
5. Making Financial Changes that Can Affect Your Premiums
Many people pay for the standard premium for Medicare Part B, but if you are a high income earner, you will have to pay more than the $170.10 per month. For 2022, if a single earner has an adjusted gross income of $91,000 or more and married joint filers earn more than $182,000, the premium can range from $230.10 to $578.30 per month. You could also face a high income surcharge for Medicare Part D prescription coverage, adding $12.40 to $77.90 per month in 2022. If you sit near the income cutoff, you need to be careful to not go over the threshold. Consider spreading Roth IRA conversions over several years and making large withdrawals from Roth accounts instead of tax-deferred accounts.
If you need assistance with setting up medicare and making the right decisions for your Medicare coverage, contact me for more information at (402) 454-7204 or email me at jason@fp-wealth.com.
Sources:
https://www.aarp.org/health/medicare-insurance/info-2019/common-medicare-mistakes.html