Five Potential Pitfalls in Medicare Coverage

The annual Medicare open-enrollment period has begun, and there’s plenty of room for mistakes when choosing among hundreds of policies.

Consumers could end up paying too much for a plan that doesn’t cover what they need, according to the National Council on Aging. The nonprofit advocacy group in Washington offers guidance on its MyMedicareMatters website and has created a list of the five biggest mistakes people make when enrolling:

1. Missing the date. The initial enrollment period is based on your 65th birthday. If you or your spouse is still working on your 65th birthday and you have qualifying company health insurance, you can delay enrolling in Medicare Part B, which covers outpatient services and medical supplies, without penalty. Once you stop working and/or the company insurance ends, you have a special eight-month enrollment period in which to sign up for Part B. But if you miss the window, you pay a penalty on future Part B premiums.

2. Believing Medicare supplement plans and Medicare Advantage are the same thing. Original Medicare is a government fee-for-service program that people typically supplement with a private Medicare supplement policy (as well as a Medicare Part D policy for prescription drugs). The supplement policy can cover out-of-pocket costs and doesn’t require authorization to see specialists. By contrast, a Medicare Advantage plan is private insurance that takes the place of original Medicare and works more like group insurance. It can cover programs original Medicare doesn’t cover, such as vision or wellness visits, but can limit your choice of doctors and hospitals.

3. Getting overwhelmed and winging it. With so many different plans to choose among, some people toss up their arms and just guess at enrollment.

4. Not applying for Extra Help. There are billions of dollars available to help people with modest retirement incomes pay for prescriptions, premiums, deductibles and coinsurance.

5. Failing to re-evaluate your coverage every year. Doctors and medications covered one year might not be covered the next year. Confirm cost, copays, covered providers and drug coverage to make sure your plan stays on track.