To ensure you have proper coverage in retirement, verify any of your assumptions before retirement. Here are some of the most common misconceptions about Medicare:
Myth: Medicare will cover all of my medical expenses.
Reality: Medicare covers roughly half of all medical and skilled nursing care expenses for an average Medicare enrollee. Some of the items and services Medicare does not cover include the following:
- Long-term care
- Routine dental care
- Cosmetic surgery
- Hearing aids
- Exams for fitting hearing aids
Myth: Medicare coverage is free.
Reality: You may pay monthly Medicare premiums along with deductibles, coinsurance, and co-payments for typical medical services. For 2015, minimum costs are as follows:
- Part A: Typically, there is no premium charge for Part A. The annual deductible is $1,260.For those who do purchase Part A, the monthly premium can be up to $407. In addition to the annual deductible, Part A charges for hospital inpatient care are:
- Days 1-60: $0 coinsurance per day of each benefit period.
- Days 61-90: $315 coinsurance per day of each benefit period.
- Days 91 and beyond: $630 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime).
- Beyond lifetime reserve days: all costs.
- Part B: The premium varies by income, and can range from $104.90 to $335.70 per month, the annual deductible is $147, and there typically is a 20 percent co-pay.
- Part C plans: The Medicare Advantage plans charge additional premiums, and co-pays vary.
- Part D plans: The Prescription Drug Coverage plans charge additional premiums, based on your income and plan chosen, the deductible can be up to $310, and co-pays vary.
Learn more about Medicare Basics.
Myth: Having poor health means I will not qualify to join Medicare.
Reality: Medicare coverage is linked to Social Security coverage. If you qualify for Social Security retirement or disability benefits, then you will qualify for Medicare benefits (typically no earlier than age 65). If you do not qualify for Medicare coverage, you can purchase coverage by paying the required premiums for each Medicare Part you want. Note that even if you have qualified for Medicare, you still need to actually apply for coverage, because enrollment is not automatic. Be sure to understand your particular enrollment deadlines—if you miss one, you may incur a late penalty.
Myth: Once I am enrolled in Medicare, my coverage and costs will not change.
Reality: Medicare coverage and costs may change each year. Even if your plan’s cost and coverage stay the same, your health or finances may change. Review your plan each year to make sure it still will meet your needs.
Myth: I can enroll in Medicare at any time.
Reality: For your first-time enrollment, usually it is wise to enroll at age 65, especially if you are not working or do not have employer insurance. Generally you have a seven-month window around your 65th birthday (three months before and four months after) to enroll.
But if you are working and older than 65, then you can enroll within up to eight months of quitting your job. This assumes you work for a company with at least 20 full-time workers and you get health insurance from your company. If for some reason you miss your initial enrollment window, you may pay a late penalty of 10 percent of your premiums. Note that you also may be eligible to enroll because of past work history (at another employer), or you may be eligible because your spouse is eligible.
For existing Medicare beneficiaries, there is an annual open enrollment period of about seven weeks in the fall (the dates may change). During open enrollment, you can explore any new health and/or drug plans that may fit your health-care needs.