10 Myths About Medicare
- The Truth Behind Medicare MythsAbout 60 million Americans rely on Medicare to cover their healthcare costs. If you will be one of them soon, you may have heard some things about how the program works. It can be confusing and understanding it can take some research. Unfortunately, a lot of inaccurate information is out there, and getting your initial Medicare enrollment wrong can cost you. Here is the truth about Medicare myths and facts so you can protect your retirement finances and plan your future healthcare spending.
- Myth 1: Medicare is free healthcare.The truth behind this myth is yes and no. Part A—hospital insurance—is free for many people. You will get Part A for free if you paid Medicare payroll taxes for 10 years. Other people will either pay the full monthly premium or a discounted monthly premium, depending on their Medicare payroll tax history. All other parts of Medicare come with a monthly premium. This includes Part B—medical insurance; Part D—prescription drug coverage; and Medigap—Medicare supplemental insurance. Part C—Medicare Advantage—plans may also charge an additional monthly premium
- Myth 2: Medicare costs the same for everyone.Again, the truth here is yes and no. Out-of-pocket costs under Medicare include premiums, deductibles, coinsurance and copayments—or copays. Your premium for Part A depends on your Medical payroll tax status (see previous slide). Your premium for Part B depends on your income. There is a standard Part B premium everyone pays. The higher your income, the more you will pay above the standard premium. The deductibles and coinsurance for Part A and Part B are the same for everyone. The out-of-pocket costs for Part D, Medigap, and Medicare Advantage depend on the plan you choose. However, people with higher incomes will pay higher premiums for Part D.
- Myth 3: Medicare covers everything, including long-term care.Many people assume Medicare coverage is like their regular health insurance—it covers just about everything. The truth is Medicare covers most basic healthcare needs. It covers hospital stays, lab tests, doctor visits, same-day surgery, and preventive services. It also covers durable medical equipment, some home health services, short-term skilled nursing care, and hospice. It doesn’t cover long-term care. And people are often surprised to find out it doesn’t cover most dental care, vision care, hearing services, prescription drugs, or care outside of the United States. You need additional insurance to cover these needs.
- Myth 4: Medicare costs and coverage won’t change.The truth is every year Medicare evaluates the cost of care and makes adjustments. Often, the cost of premiums and deductibles goes up. But sometimes, they go down. For example, the agency predicts the average Medicare Advantage premium will decrease by 14% in 2020. Coverage can also change from year to year, especially for Medicare Advantage and Part D plans. Medicare and your current plan, if you have extra coverage, will send notices each year about your cost and coverage. Open Enrollment is the time to review this information and make changes if necessary.
- Myth 5: Medicare coverage is automatic when you turn 65.This is another myth where the truth is yes and no. Enrollment in Parts A and B is automatic if you’re already getting Social Security or Railroad Retirement Board (RRB) benefits. You don’t need to do anything. You’ll get a ‘Welcome to Medicare’ packet three months before your 65th birthday. However, if you aren’t getting these benefits at least four months before you turn 65, you have to actively enroll at that time. Enrollment in Part D, Medigap, and Medicare Advantage plans is voluntary.
- Myth 6: I can enroll in Medicare whenever I want.Many people assume Open Enrollment is the time to sign up for Medicare. Or they can enroll whenever they want. In fact, your seven-month initial Medical enrollment period (IEP) is the time to do it. Your IEP encompasses your birthday month and the three months before and after it. It almost always makes sense to enroll in Part A. If you’re still working, you may not need to sign up for Part B right away. Otherwise, if you fail to enroll in Part B during your IEP, you’ll pay a lifetime penalty when you do sign up. And the longer you wait, the higher the penalty will be. The same is true with Part D.
- Myth 7: I can’t qualify for Medicare because I have poor health.Medicare coverage is a function of Social Security benefits, not your health. Medicare can’t deny coverage due to a pre-existing condition. It can’t raise your rates due to poor health either. It is the same with Medicare Advantage plans too. However, Medigap coverage gets tricky. You can buy a Medigap plan regardless of your health status if you sign up during your Medigap open enrollment period. If you miss signing up during this time and want to buy Medigap later, insurance companies can reject your application. If they accept you, they may charge you more.
- Myth 8: I can’t get Medicare because I never worked or didn’t work long enough.The truth is you can get Medicare if you are 65 years or older and a U.S. citizen or legal permanent resident. Your work record determines your cost for Part A. To get Part A premium-free, you must have paid Medicare payroll taxes for 10 years or 40 yearly quarters. People who paid this tax for 30-39 yearly quarters will pay a discounted premium. People who paid the tax for less than 30 yearly quarters will pay the full premium. So, what about a non-working spouse? You can qualify for Part A premiums under your spouse’s work record when you turn 65, if your spouse is at least 62 years old.
- Myth 9: Medicare only covers people 65 years and older.Most people associate Medicare with health coverage for senior citizens. However, certain younger people qualify for Medicare benefits. This includes people who have been receiving Social Security disability benefits or certain RRB disability benefits for 24 months. People with ALS (amyotrophic lateral sclerosis) or ESRD (end-stage renal disease) can also qualify.
- Myth 10: Medicare and Medicaid are basically the same.It’s easy to confuse Medicare and Medicaid. They are both government healthcare programs. Medicare falls under the Federal Government. Medicaid is a joint program between the Federal Government and the states. It provides free or low-cost healthcare for low-income individuals, families, pregnant women, and people with disabilities. To complicate matters, it’s possible to qualify for both Medicare and Medicaid. This is dual eligibility. It expands your coverage to include things like long-term care. It also covers most of your healthcare costs.
10 Myths About Medicare | Myths & Facts About Medicare Enrollment