According to a 2018 survey, the Nationwide Retirement Institute found that despite 86% of older Americans enrolled currently enrolled or planning to enroll in – Medicare, 72% say they do not fully understand how the program works and wish they had a better understanding of the Federal healthcare program. The study further found the following as misconceptions that people have about Medicare.
- 53% didn’t know that Medicare Part B isn’t free, even if you’ve worked and paid Social Security taxes for 10 years or longer
- 23% didn’t know that Medicare enrollment has a specific time period and time constraints
- 29% didn’t know that Medicare costs are not the same for everyone
There are several misconceptions about Medicare, and the more you understand about how it works, the better off you'll be during retirement. Let’s look at some of these common misconceptions.
Myth No. 1: Medicare is free
According to the survey, more than half of older Americans incorrectly believe that Medicare is free. Although Medicare will cover many of your healthcare expenses, you pay premiums, deductibles, copays, and coinsurance out of pocket, just like any other insurance plan.
Myth No. 2: You can enroll any time
The truth is, there are specific times when you can sign-up. (“When to Enroll | WellCare”) If you are enrolling in Medicare for the first time, you have three months before your 65th Birthday until three months after your birthday to sign up. This is known as your Initial Enrollment Period.
One exception to the Initial Enrollment period is for people who work past the age of 65 and are qualified to delay their enrollment because they have credible coverage from an employer. These people can enroll in Medicare immediately after losing employer coverage during a Special Enrollment Period. If this is the case, they can get Parts A and B within eight months, but they will only have the first two months to e enroll in Parc C or D without being penalized.
You will also have an opportunity to enroll during the General Enrollment Period from January 1st through March 31st, during this time you can sign up for Medicare Parts A and B.
If you fail to enroll during one of these enrollment perio9ds you will have to pay a penalty when you finally do sign up.
Myth No. 3: Medicare costs the same for everyone
The amount you will end up paying for Medicare depends on a few factors. You may be subject to a late enrollment penalty that we discussed above. You might have to pay a higher premium if you had/have a higher income for Medicare Pards B and D.
While most people don’t have to pay premiums for Medicare Part A, If you and your spouse are both 65 and have not paid Medicare taxes for the last 10 years you will likely have to pay a premium for Part A.
Myth No. 4: Medicare covers everything
Nope. With Medicare you will be subject to copays, deductibles, and co-insurance. Medicare also does not provide coverage for prescription drugs, for this you will need to purchase Part D from a private insurer. Medicare will also not cover dental, vision or hearing.
Misunderstanding how Medicare works can be an expensive mistake. By being aware of some of these common myths. Medicare is complicated and confusing don’t skip out on asking for help if you need it.