It's that time of year again. Medicare open enrollment runs from Oct. 15, 2017, through Dec. 7, 2017, for the 2018 calendar year. If you're age 65 or over or meet one of several other Medicare eligibility criteria, now is the time to make your Medicare choices.
The process isn't complicated. However, there are some common mistakes that many Americans make. Here are five costly Medicare ones to avoid.
1. Not reevaluating your Medicare Part D plan each year
One of the most important components of Medicare is the prescription drug program, known as Medicare Part D. Even if you like your current Medicare Part D plan, it's a smart idea to take a fresh look at all your options.
First of all, the costs of each plan can change dramatically from year to year. The prescription drugs that you take could be less expensive with another Medicare Part D plan in 2018. In addition, some insurers might present more coverage hurdles to jump than others. Reevaluate your prescription medication needs against what different Medicare Part D plans offer to make sure you're getting the best deal.
2. Automatically enrolling in your spouse's Medicare Part D plan
You might think it would be simpler for you and your spouse to choose the same Medicare Part D plan. That's probably true, but it could also cost you significantly more.
Unless you and your spouse take the exact same prescription medications, there's a good chance that the plan best for you isn't the best option for your spouse. Remember that different plans can have better coverage for certain prescription drugs than others. Don't automatically enroll your spouse in your Medicare Part D plan. A little extra research could save you money.
3. Not checking Medicare Advantage plans' provider networks
Medicare Advantage plans have become increasingly popular. There are some distinct advantages to going with a Medicare Advantage plan rather than a traditional Medigap plan, although there are also some disadvantages. If you choose a Medicare Advantage plan, there's one potentially costly mistake that you don't want to make: not checking the plan's provider network.
It's quite possible that your doctor isn't in a given Medicare Advantage plan's network. If you sign up for such a plan, it means that you'll either need to change doctors (something most people don't want to do) or pay a lot more. And some Medicare Advantage plans don't cover out-of-network costs at all except for emergency services. Even if your existing Medicare Advantage plan's network includes your preferred providers, make sure there haven't been changes from 2017 to 2018.
4. Forgetting to sign up for Medicare
You'll automatically be enrolled in Medicare Part A and Part B when you turn 65 if you're already receiving Social Security benefits. But's that not the case for many Americans. If you're not currently receiving Social Security benefits, you need to sign up.
Also, many individuals who are still employed when they turn 65 opt not to obtain Medicare Part B coverage (which covers most medical services and supplies outside of hospital stays) and instead stay on their employer's health plan. If you took this path but left your job more than eight months ago, make sure that you sign up for Medicare Part B during the current open enrollment period.
5. Not watching your adjusted gross income
Medicare Part B monthly premiums vary based on your adjusted gross income. In addition, high-income beneficiaries must pay higher premiums for Medicare Part D prescription drug plans.
This is important to remember, especially when you're making withdrawals from tax-deferred retirement accounts. If you take out too much money in the same year, it could boost your adjusted gross income to a higher bracket that makes your Medicare premiums higher. If this applies to you, spreading withdrawals across multiple years could save you a lot of money on Medicare premiums.
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