The 5 Most Common Medicare Mistakes You Can Avoid.


Millions of Americans are currently enrolled in Medicare – and more than 10,000 new members sign up every day. Unfortunately, many of them fall into costly – and sometimes irreversible – pitfalls when they enroll.

The good news is the most common Medicare mistakes are easy to avoid if you know what to look for…That’s why we compiled this short list of the most common Medicare mistakes to avoid. Take a look…

List of 5 Common Medicare Mistakes

Common Medicare Mistake No. 1: Not opting for “Extra Help.”

There are billions of dollars devoted to programs to help retirees pay for their prescriptions, health insurance premiums, deductibles, and coinsurance. If your retirement income is thin, find out if you qualify for assistance.

According to the official Social Security website, “Medicare beneficiaries can qualify for Extra Help with their Medicare prescription drug plan costs. The Extra Help is estimated to be about $4,000 per year.”

Bottom Line: A little research into the “Extra Help” qualification could save some serious cash.

Common Medicare Mistake No. 2: Signing up at the wrong time.          

Signing up for your Medicare plan too soon or too late can result in serious penalties. According to, during your initial Medicare enrollment – the first time you sign up for the program – you can sign up for parts A, B,C, and D:

  • During the three months before your 65th birthday;
  • The month of your birthday; and
  • The three months following your 65th birthday.

There can be long-term, irreversible effects of not signing up properly. The penalty rates vary. For example, the penalty for Part D late enrollment is equivalent to 1% of the cost of a standard Medicare drug plan premium for every month the enrollee delays enrollment. A May 5, 2013, Forbes article outlines how that penalty can play out…

Say a standard Medicare drug plan premium costs $46.00. One percent of that is $0.35. If a new enrollee forgot to sign up for coverage until his or her 66th birthday, that comes out to $4.20 in accrued penalty fees ($0.35 x 12 = $4.20).

The amount is tacked onto the enrollee’s monthly premium for life once he or she finally does sign up.

Bottom Line: Know your enrollment window ahead of time and don’t miss it.

Common Medicare Mistake No. 3: “Guessing” at what is the right plan.          

Comparing every single plan available for you and your spouse can be very difficult and time-consuming. Sometimes the specifics of each plan are hard to understand. To the end, people grow frustrated and impatient and end up selecting a plan without thorough comparison.

But this isn’t something you should leave to guesswork. According to a June 10, 2015, article posted on the National Council of Aging’s website, someone about to select his or her plan should, at a minimum, answer the following four questions:

  • Do I have health insurance from another source?
  • Do I have any chronic conditions?
  • Which doctors and hospitals do I use?
  • Which prescriptions do I need and what pharmacies do I get them from?

Your answers will help you more quickly and accurately narrow down which Medicare plan is right for you.

Bottom Line: Don’t guess when it comes to choosing your plan.

Common Medicare Mistake No. 4:  Ignoring Part D because you don’t take any prescription drugs.

Many people think, “Why pay Part D premiums if I don’t take prescription medicine?” The answer to this question is simple: Chances are you’re not psychic, so you don’t know what the future holds.

You may fall ill or get injured. And when you do, Part D provides coverage, but only the coverage you signed up for during the enrollment period. That means if you don’t have prescription coverage, you’ll have to wait until the next open enrollment (up to a year later) to make any adjustments. A March 7, 2014, AARP article advises readers to pick a plan according to the specific medications they’re currently on. And if you aren’t on any current medications, choose a plan that meets your current needs, as well as those you think may be in your foreseeable future.

Bottom line: Always have prescription coverage.

Common Medicare Mistake No. 5: Choosing Medicare plans solely based on premium amounts.

When comparing plans, investigate and learn about all out-of-pocket costs, not just the premium amount. Such costs include deductibles, co-payments, and more.

You see, while zero or low-premium plans seem attractive, expenses can show up elsewhere come time to pay the bill – and they prove ultimately more costly than a higher-premium plan.

Bottom Line: Study the components of each plan carefully, then decide what’s right for you

3 Medicare Enrollment Myths.

Medicare can be deeply confusing, and there are a lot of myths out there about how it works and what works best for a particular situation. Here are three myths that you need to watch out for to ensure that you don’t lose out on important coverage or get hit with big penalties.

Myth #1: I’m automatically enrolled
Unless you’re already getting Social Security or Railroad Retirement Board benefits when you turn 65, you will not be automatically enrolled in Medicare. You need to apply directly with Social Security to get on the books.

You can enroll anytime from three months before your 65th birthday month to three months after, meaning that you have a seven month period in which to choose the right plan for you. Part A is free, so it makes sense to sign up right away.

Of course, if you’re still working you might think that you don’t need Medicare Part B (which isn’t free), so there’s no point in enrolling. That brings us to myth number two:

Myth #2: I can wait to enroll
One thing you don’t want to do when it comes to Medicare is wait. Part A is free, so, again, no matter what your situation it makes sense to enroll right away.

When it comes to Part B, it generally makes sense to enroll as soon as you’re eligible, as making a mistake can be quite costly. Missing your enrollment can mean a permanent 10% annual increase in your Part B premium and a 1% monthly increase in your Part D premiums, which is probably not something you want to deal with.

What if you or your spouse are still working and have health insurance? In this case, check with your current provider to see how they work with Medicare. It might make sense to postpone — but don’t forget about signing up when you do retire. You’ll have eight months to do so.

Also, as a rule of thumb, if you work for a company with fewer than 20 people, it makes sense to sign up when you’re first eligible. That’s because smaller plans are allowed to drop you once you’re eligible for Medicare, and they might even refuse to pay Medicare-eligible claims.

If you’re retired and have health coverage, sign up anyway. This applies even if you have COBRA, a retiree health insurance plan, or veteran’s benefits. All of these plans become secondary plans once you’re signed up — and none of them exempt you from the late-enrollment penalties.

Myth #3: Once I’ve signed up, I’m done
While Parts A and B cover a fair amount, neither has out-of-pocket limits. That means that the 20% of costs you’re responsible for under A and B could add up to a lot of money should you need extensive treatment. This is the main argument for getting Medigap’s supplemental coverage or signing up for an Advantage plan.

But even here, it’s important to keep an eye out for gaps in coverage.

The Part D donut-hole is a great example. Part D provides for prescription drug coverage, but once you and the insurance company have collectively paid a certain amount on prescription drugs ($2,960 in 2015), you become responsible for significantly more of the cost — 45% of brand name drugs and 65% of generics. Once your out-of-pocket spending reaches $4,700, the donut-hole closes and you’ll pay a small amount on drugs for the rest of the year.

In other words, take the time to do your homework. Don’t just stop at Parts A and B, and remember to note the deductibles, premiums, and coverage limits in the plans you’re reviewing. Taking the time now can save you a lot of stress down the line.

Medicare Part B premiums increasing up to 30%.

When the Medicare Access and CHIP Reauthorization Act of 2015, commonly known as the “doc-fix” legislation, becomes law, some Medicare participants will pay 30% more for their Part B premiums. The legislation, which was decisively passed by the House on March 26 and the Senate on April 14 is expected to be signed by President Obama soon.

The bill replaces the current physician Medicare reimbursement schedule with payment increases for doctors for the next five years. It will be financed by higher Medicare Part B premiums for individuals whose income exceeds specified thresholds beginning in 2018.

Lower to moderate income households unaffected

Medicare Part B covers doctor and outpatient visits. Premium amounts are determined using modified adjusted gross income, or MAGI, per one’s federal income tax return two years prior to the current year. MAGI is adjusted gross income plus tax-exempt interest.

There are currently five MAGI brackets. Each of the married filing joint bracket amounts is double the corresponding single bracket amounts. Annual premiums range from $1,258.80 to $4,028.40 per person depending upon your bracket.

Individuals in the first two brackets, that is, those whose MAGI doesn’t exceed $107,000 using single filing status or $214,000 filing joint, will continue to pay the premiums they’re paying now.

New income bracket

The third MAGI bracket, which is currently $107,001 up to $160,000 for single individuals, with an associated annual Part B premium of $2,517.60, will be split into two brackets with a premium of $3,272.40 for the fourth bracket per the table below. Per the table, single individuals with MAGI between $133,501 and $160,000 will pay an additional $754.80, or 30%, for their Medicare Part B premiums beginning in 2018.

An annual premium of $3,272.40 is currently paid by single individuals whose MAGI is between $160,001 and $214,000. Beginning in 2018, those who fall into this bracket will pay $4,028.40. This represents an increase of $756.00, or 23.1%. The top premium of $4,028.40 is currently paid by single and joint filing status individuals whose MAGI exceeds $214,000 and $428,000, respectively.

Medicare Part D prescription drug premiums

The new Medicare Part B income brackets will also apply to Medicare Part D prescription drug premiums beginning in 2018. Once again, single individuals with MAGI between $133,501 and $214,000 will be affected as will joint filers with MAGI between $267,001 and $428,000.

The Part D premium increases for individuals whose income falls into the foregoing ranges will vary depending upon the specific Part D plan. While the monthly amounts are less than those for Part B, the percentage increases for affected individuals will be as much as 61%.

Income brackets not adjusted for inflation

Individuals who are impacted by the income bracket changes and associated higher premiums will initially be in the minority. More people will be adversely affected each year going forward, however, since the new legislation includes no provision for income bracket inflation adjustments.

Narrower brackets that would result in significantly greater numbers of individuals paying higher Medicare Part B and D premiums are a distinct possibility in the future. Had a bipartisan committee proposal been enacted, the top end of the lowest MAGI bracket would have been reduced for single and joint filing taxpayers from $85,000 and $170,000, respectively, to a maximum of $45,000 and $90,000, respectively. The other MAGI brackets would have seen similar reductions.

Look for planning opportunities

Given the fact that Medicare Part B and D premiums are determined by one’s income, it’s important to be aware of the various income thresholds and plan accordingly. Any reduction in Medicare premiums should also result in a reduction in income tax liability since both are income driven.

Finally, given the fact that 2016 MAGI will be used to calculate 2018 premiums, it isn’t too early to start planning. This includes individuals who are turning 62 in 2015 since they will be eligible for Medicare in 2018.

What Medicare Does and Does Not Cover.


  • Introduction

    Medicare pays for many of your health-care needs and expenses—but not everything. Knowing what’s covered and what isn’t can help you plan for unexpected costs and budget for your annual health-care expenses.

  • What Does Medicare Not Cover?

    Medicare coverage doesn’t provide:

    • long-term care (also called custodial care), such as nursing home stays or stays in an assisted-living center
    • routine dental or eye care
    • dentures
    • cosmetic surgery
    • acupuncture
    • hearing aids and exams for fitting them

    What Does Part A Cover?

    Medicare Part A covers your inpatient hospital stays.

    • You pay a deductible and no co-payment for days one to 60 each benefit period.
    • You pay a co-payment for days 61 to 90 each benefit period.
    • You pay a co-payment per “lifetime reserve day” after day 90 each benefit period (up to 60 days over your lifetime).
    • You pay all costs for each day after the lifetime reserve days.

    Inpatient mental health care in a psychiatric hospital is limited to 190 days in a lifetime.

    What Does Part A Cover? Continued

    Medicare Part A will cover an inpatient stay in a skilled nursing facility—after you have stayed a minimum of three days in the hospital.

    • You pay nothing for the first 20 days each benefit period.
    • You pay a co-insurance per day for days 21 to 100 each benefit period.
    • You pay all costs for each day after day 100 in a benefit period.

    Hospice care facilities

    • You pay nothing for hospice care.
    • You pay a co-payment of up to $5 per prescription for outpatient prescription drugs for pain and symptom management.
    • •    You pay five percent of the Medicare-approved amount for inpatient respite care.

    Home health-care services

    • You pay nothing for covered home health-care services.
    • Blood transfusions
    • You pay for the first three pints of blood if the hospital treating you had to buy the blood. It’s free if the blood was donated to the hospital or to pay 20% of the Medicare-approved amount for durable medical equipment.

    What Does Part B Cover?

    • Doctor’s appointments, including specialists. You pay 20 percent co-insurance.
    • Outpatient care, including outpatient hospital, medical, urgent care, tests, therapies, outpatient mental health, emergency, and ambulance services. You pay 20 percent co-insurance.
    • Home health services. This is limited to medically necessary part-time care. You pay 20 to 25 percent co-insurance.
    • Durable medical equipment. You pay a 20 percent co-insurance for items like oxygen, wheelchairs, and walkers.
      Preventive and screening services. You pay 25 percent co-insurance for some screenings.

    Preventive and screening services covered by Medicare Part B

    Preventive and screening services covered by Medicare Part B

    • abdominal aortic aneurysm ultrasound
    • bone mass measurement (bone density)
    • mammograms
    • cardiovascular disease behavioral therapy
    • cervical and vaginal cancer screenings
    • colorectal cancer screenings
    • diabetes screening
    • glaucoma tests
    • hearing and balance exams
    • flu shot
    • hepatitis B shots
    • HIV screening
    • obesity screening and counseling
    • prostate cancer screenings
    • tobacco cessation therapy
    • yearly wellness visits

    Emergency Services Covered by Medicare Part B

    Medicare Part B covers ground ambulance transportation when you need to be taken to a hospital or emergency medical center. Medicare may also pay for emergency transportation in an airplane or helicopter if you need immediate and rapid transportation. You may have to pay a co-insurance payment on this service.

    Supplies Covered by Medicare Part B

    • diabetes self-management training
    • diabetes supplies
    • kidney dialysis services and supplies
    • transplants and immunosuppressive therapy




Hospital Industry Raids The Medicare Trust Fund.

Every year, millions of Americans pay federal taxes to support government programs that provide health, wellness, and other benefits to those who need it most. One would assume that safeguards are in place to ensure that our taxpayer dollars are used appropriately and efficiently. However, a recent Government Accountability Office (GAO) report states that rampant waste exists within the Medicare program. In 2014 alone, Medicare overpaid hospitals and other healthcare providers nearly $60 billion for services that were unnecessary or billed improperly. That’s billion—with a “B.”

Would you allow yourself to be overcharged for your groceries and not ask for a refund? Would you go out to dinner and pay for items on your check that you never ordered? The federal government would, and it is wasting your taxpayer dollars while doing so.

The GAO report states that Medicare has the highest level of improper payments government-wide, which should be unacceptable given the program’s important role as the healthcare safety net for the nation’s seniors and other beneficiaries. Pair that with a recent Medicare Trustee report that says Medicare will go bankrupt in the next 15 years (by 2030). Clearly, Medicare waste needs to be made a higher Congressional priority, or we can bid farewell to a program that we hoped would be there for us when we turn 65.

In 2009, Congress launched a program to provide vital oversight to Medicare, the Recovery Audit Contractor (RAC) program, which leverages the expertise of independent contractors to review post payment Medicare claims and determine if they have been billed according to Medicare policy. Since the RAC program began, these contractors have returned more than $9 billion back to the Medicare Trust Fund while reviewing less than 2% of all Medicare claims. This work to recoup dollars that have been inappropriately billed helps prolong the life of this vital healthcare program.

So, what’s the problem? Congress has benched the RACs, the only program looking out for taxpayer dollars, while Medicare hemorrhages billions due to provider complaints that they are “burdened” by Medicare oversight programs.

In fact, in an effort to game a broken system and retain as much money as possible, whether billed correctly or not, hospitals have spent tens of millions of dollars lobbying Congress to shut down the RAC program, one of the most successful oversight programs in U.S. history. Hospitals most passionately fight against review of Medicare Part A claims, which are directly paid for by taxpayer dollars.

Medicare improper billing runs across a wide spectrum—including everything from simple coding mistakes to outright fraud. For example, providers have inappropriately charged Medicare ten times what it costs to administer a single medication, have billed for care provided after a patient’s death, and also have held patients in the hospital longer than necessary in order to recoup a higher reimbursement rate.

Guest post written by Kristin Walter

Ms. Walter is spokesperson for the Council for Medicare Integrity, a non-profit organization.

What Is Medicare?


Medicare is a federal health insurance program that covers millions of Americans. In general, you are eligible for Medicare if you are 65 or older, or you are younger than 65 and meet criteria for certain disabilities, or have End-Stage Renal Disease (ESRD).

The Medicare basics have four main components:

Medicare Part A helps pay for inpatient hospital care, skilled nursing care, some home-health services, and hospice care.

Medicare Part B helps pay for physician services, outpatient hospital care, and other medical services not covered by Part A. Together, Parts A and B are known as Original Medicare.

Medicare Part C, usually known as Medicare Advantage, is offered by private health care organizations.  These plans cover all services under Parts A and B and usually offer additional benefits.

Medicare Part D helps pay for outpatient prescription drugs and is available through private health care organizations such as Kaiser Permanente. Part C plans often include Medicare Part D coverage.

About Medigap (Medicare Supplement) Coverage.

What is Medigap?

Original Medicare Part A and Part B has a variety of deductibles, co-payments, and other out-of-pocket costs. Medicare Supplement insurance plans, also known as Medigap plans, can pay for those out-of-pocket costs which can simplify your healthcare expenses. These insurance plans work alongside Medicare Part A and Part B.

Types of Medigap Plans

You must be enrolled in Medicare Parts A and B in order to purchase a Medigap plan. In 47 states, there are 10 standard designs of Medicare Supplement Insurance. They cover different levels of out-of-pocket costs within Original Medicare Parts A & B. Using the links below, you can see what is covered by each of the 10 Medicare Supplement plan types.

Medicare Advantage

What is Medicare Advantage

The Medicare Advantage program was created by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) which was passed in 2004. The program was designed to bring more affordable healthcare and prescription drug coverage to Medicare beneficiaries, expand health options and preventive care services and improve health access for those living in rural areas. Medicare Advantage plans replaced “Medicare + Choice” plans, an alternative to Original fee-for-service Medicare, and that is why Medicare Advantage plans are also known as Medicare Part C. An important aspect of Medicare Advantage plans is a mandatory maximum out-of-pocket amount for all Original Medicare services. After a beneficiary reaches the maximum out-of-pocket limit in a given coverage year, the plan must cover 100% of your remaining Original Medicare-covered costs for the remainder of the year. The mandatory maximum out-of-pocket limit for 2014 Medicare Advantage plans is $6,700 or less.

A Medicare Advantage Plan is a Medicare health insurance policy offered by a private insurance company. Medicare reimburses the insurance companies a fixed monthly amount for each member according to factors such as Medicare Advantage risk scores. Medicare enrollees often decide to receive healthcare coverage through a Medicare Advantage plan because many of these Medicare Part C plans can include more benefits (such as vision, dental, hearing, and health/wellness plans) than Original Medicare and most Medicare Advantage Plans provide prescription drug coverage.1 Medicare Advantage beneficiaries may have to pay a monthly premium for their additional benefits and most Medicare Advantage plans require copays for services. Some copays are lower than what a beneficiary would have to pay if they were enrolled in Original Medicare but copays for certain services can cost more.

Turning 65? Don’t Miss Open Enrollment Period for Medigap Insurance.

Turning 65? Don’t Miss Open Enrollment Period for Medigap Insurance

Medicare plans aren’t intended to cover every medical expense – there are still copayment, coinsurance, and deductible payments to be made. Can you afford them yourself, or should you get Medigap insurance?What is ‘Medigap insurance’?

Medigap insurance is simple: You pay a modest premium each month. In exchange, you take much of the pain out of any possible deductibles or copayments.  While Medigap is standardized under federal law, these policies are private health insurance plans that cover expenses you may still have even after Medicare has paid its portion of your medical bills. This may includes copayments, coinsurance, deductibles, physician fees, lab fees, the cost of durable medical equipment, and sometimes more.

There are ten types of Medigap policies available; all have standardized minimum benefits and use the same letter names (with the exception of Massachusetts, Minnesota, and Wisconsin, which each have their own system). This makes it easier to compare rates offered for the same policy by different companies, and to know what policy to shop for if you move to another state. When considering Medigap insurance plans, your first step is to find out what is available in your state.

The good news is that any standardized Medigap policy is guaranteed renewable, which means that coverage cannot be canceled for any reason other than failure to pay the premium. You cannot be dropped because you are sick.

Am I eligible?

Anyone age 65 or older and enrolled in Medicare Part B can purchase Medigap. However, you may not need a Medigap policy if you:

  • Are already enrolled in a Medicare Advantage Plan (Part C). In fact, it is illegal for anyone to sell you a Medigap policy if you are already in a Part C Plan, unless your Part C coverage will end before the Medigap insurance begins.
  • Are covered by Medicaid. Except for certain circumstances, it is illegal for an insurance company to sell you a Medigap policy if you receive Medicaid.
  • Have other health insurance, such as coverage from employer/union group health, TRICARE, or VA benefits.

If you are eligible for and in need of Medigap coverage, it is very important to understand the advantages of the open enrollment period.

What is the open enrollment period? Why is it so important?

The open enrollment period for Medigap insurance is a one-time only six-month period that begins the first day of the month in which you are 65 years of age AND enrolled in Medicare Part B. During open enrollment, you have the right to purchase any Medigap plan that’s available in your state without the risk of refusal and without paying extra for any pre-existing conditions. (Depending upon your previous coverage, however, there may be a waiting period for coverage related to a pre-existing condition).

If you are 65 and already have employer-provided group health insurance, you may wish to wait to enroll in Medicare Part B. When your employer coverage ends, you can enroll in Part B without a late enrollment penalty, and then your Medigap open enrollment period will begin when you need it.

What if I don’t need Medigap now, but need it later?

In addition to the open enrollment period, there are certain other situations under which you have the right to guaranteed Medigap coverage regardless of any pre-existing conditions, at the same price for which it would be offered to anyone else. These rights are called “guaranteed issue rights” or “Medigap protections” and they occur in the following circumstances:

  1. Your other health care coverage changes or is lost.
  2. You’ve had a Medicare Advantage Plan (Medicare Plan C) for less than a year and want to switch (or, in some cases, switch back) to Original Medicare with a Medigap plan.
  3. The carrier of your current Medigap insurance ceases to exist, or has misled you or otherwise broken the rules.

If any of these situations occur, you have 63 days to exercise your guaranteed issue rights to secure Medigap insurance. Click here for detailed information about situations, rights, and deadlines.

It is important that you be able to prove your previous coverage and the date it changed or ceased; keep all letters of notification, claim denials, or similar documents, and the envelopes in which they arrived.

How much does it cost?

Each insurance company sets its own premium, or price, for the policies it offers, and there are a number of ways in which they may choose to do so. When comparing premiums from different companies, it is important to consider the method used in pricing – be sure to ask for this information before buying.

Issue-age-rated, or “entry-age-rated” policies have premiums determined in part by the age at which you first purchase the policy. A premium may increase due to inflation or other issues, but will not increase based on age.

Attained-age-rated premiums increase with age in addition to inflation or other external issues. These premiums are quite low at first, but can ultimately be the most expensive.

Community-rated, or “no-age rated” policies’ premiums may fluctuate due to inflation or other issues, but are not based upon your age.

Other factors influencing price include discounts that the carrier may offer; for multiple policies, paying yearly, and so on.

So should I get Medigap?

As with any insurance, its value lies in both peace of mind and in potential financial savings – in this case, the known cost of premiums versus the unknowable cost of medical bills after Medicare. Take the time to carefully consider your immediate and likely future needs, and weigh that against your peace of mind and financial capabilities. Medigap doesn’t make sense for everyone – and it should be carefully considered in light of your own individual situation. You should also compare it to the various Medicare Advantage programs available in your area. Your agent is an expert in the various plans available and the advantages and disadvantages of each one.

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