Image: Public Health Image Library, CDC.
Medicare covers tens of millions of Americans, but many are woefully ignorant about the program. With Medicare having celebrated its 50th anniversary last year, the government agency charged with oversight of the healthcare program did its best to raise awareness of what Medicare does and its most important facets. Below, we reveal five of the things that most Americans don't know about Medicare.
1. How you qualify for Medicare.
Medicare is something that many older Americans take for granted, but you actually have to qualify to receive it. Fortunately, the burden isn't too difficult for most workers to meet. As long as you have worked long enough to collect 40 credits under the program -- equivalent to a 10-year career -- then you qualify for Medicare. In addition, if you're married to someone who has qualified, then you can qualify on your spouse's work history even if you wouldn't qualify on your own.
Those who haven't collected enough credits can generally still participate in the program, but they have to pay for certain elements that others get for free. The most important example is Part A hospital insurance, which is included free of charge for most participants but for which those who don't have enough credits have to pay monthly premiums.
2. Medicare taxes used to have a wage base like Social Security.
During the current Presidential election campaign, many candidates have called for an increase in the wage base on which workers pay Social Security taxes. What many don't realize is that such measures have been in effect on the Medicare side for decades.
Prior to 1991, workers stopped paying payroll taxes for Medicare at the same salary level that applied to Social Security tax. From 1991 to 1993, however, lawmakers established higher Medicare wage bases, and from 1994 on, the Medicare wage base disappeared entirely. The net effect has been to impose Medicare taxes on high-income earners to an unlimited extent.
3. You can get penalized for not participating in Medicare when you qualify.
Many Americans have argued against provisions of the Affordable Care Act that require people to have healthcare coverage or else pay penalties. Yet similar provisions in Medicare have existed for a long time.
In particular, those who don't enroll in Medicare at their first eligible time generally have to pay higher premiums once they do join. For Part B medical coverage, your monthly premiums will rise 10% for every 12 months that you could have been on Medicare but chose not to be. In addition, a similar late-enrollment penalty for Part D prescription drug coverage takes the number of months you weren't covered and multiplies it by a factor based on the national base beneficiary premium. The result increases your monthly Part D premium.
4. You can switch your coverage options every year.
Most people choose a Medicare option and stick with it for the remainder of their lives. But every year during certain periods, you have the right to make changes to your coverage.
Various time periods cover different moves. For example, if you want to switch from traditional Medicare to a Medicare Advantage Plan, you can do so from October 15 to December 7. You can also switch among different Medicare Advantage Plans during the same period. A different date range from January 1 to February 14 allows you to switch back from Medicare Advantage to original Medicare.
Looking at different coverage options can let you adapt to your changing health. Early in retirement, it might be less costly to go with a less comprehensive option, then switching to a more complete package when your healthcare needs increase.
5. Not every doctor accepts Medicare.
Medicare has a lot of flexibility for patients, as you can generally see whatever doctor you wish. However, medical professionals aren't required to accept Medicare patients.
To find out whether your doctor takes Medicare, you can do several things. The Medicare website at Medicare.gov has information about professionals who accept patients under the program. If you have a Medicare Advantage Plan, you can contact the plan provider directly for information on coverage. Finally, contacting your chosen medical professional directly will get you the answers you need.
Medicare is a complex program, but finding the facts doesn't have to be difficult. Simple answers are available to most of your questions as long as you know where to look for them.
