Millions of senior citizens depend on Medicare to pay for their healthcare services during retirement. But if you're not careful, you could make wrong moves that cause you to miss out on important benefits, or leave you paying more for them. Here are a few major Medicare mistakes to steer clear of in the coming year.
1. Enrolling late
Medicare eligibility begins at age 65, but you actually get a seven-month window to enroll initially. That window begins three months prior to the month of your 65th birthday, and ends three months after it. If you don't sign up for Medicare on time, you not only risk going without coverage, but you also risk paying more for Part B coverage throughout retirement.
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Though Medicare Part A, which covers hospital care, is free for the vast majority of enrollees, those who want Part B -- which covers "medically-necessary services" such as doctors' visits, tests, and outpatient care -- must pay a monthly premium. But if you decide to skip Part B for a while to save some money, you could wind up costing yourself a lot more.
Specifically, for every full 12-month period that you're eligible for coverage but don't take it, your monthly premiums when you do enroll will rise by 10%, and you'll pay those higher premiums for life. As such, the financially wise course of action is to sign up for Medicare Part B during your initial enrollment period.
Keep in mind that the rules are slightly different if you're covered by a group health plan through a job (yours or your spouse's) when you reach 65. In that case, you don't have to sign up during the aforementioned seven-month enrollment period. Rather, you'll get a special enrollment period that will kick in once you separate from your employer or lose your group health coverage -- whichever happens first.
2. Not changing your Advantage plan while you have the opportunity
Some seniors choose a Medicare Advantage plan -- aka, Part C -- as an alternative to original Medicare. There are plenty of good reasons to get an Advantage plan -- many offer coverage for more services than original Medicare, and depending on circumstances, your out-of-pocket costs could be lower.
But of course, there's always a trade-off for lower prices, and in this case, it's that Advantage plans put some restrictions on which doctors and hospitals you can visit, and they may require you to get preapproval for some services.
Because they are privately administered, not all Advantage plans are created equal, so if you find yourself unhappy with the one you've chosen -- say, because it limits you to too narrow a network of providers -- it pays to switch. But you don't need to wait until Medicare's annual open enrollment period, which begins in October, to change your Advantage plan. There's a relatively new Medicare Advantage open enrollment period that runs from Jan. 1 through March 31. During this time, you can swap one Advantage plan for another, or even drop Advantage completely and switch to original Medicare. Be sure to explore your options early on in the year; otherwise, you may have to wait quite a while to change your plan.
3. Ignoring Medicare's free preventive care services
Though there are plenty of costs you'll have no choice but to cover once you're signed up for Medicare, the program does offer a number of free preventive health services for enrollees. And if you don't capitalize on them, you'll not only potentially put your health at risk, but also possibly create a scenario where you'll be stuck paying for expensive diagnostic services or treatments out of pocket.
Medicare's free preventive care services run the gamut from annual wellness visits to depression screenings to alcohol and obesity counseling. They also include diagnostic services like mammograms, and yearly flu shots.
If you're a senior, you probably can't afford to spend more money than necessary on healthcare. Avoid these Medicare mistakes, and you won't have to.
