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BEACON Senior News - Western Colorado

3 mistakes that can cost Medicare beneficiaries a fortune

Oct 03, 2022 03:38PM ● By Christian Worstell

Medicare is designed to help beneficiaries save money on health care. But there are three simple mistakes people can make that could end up costing them a fortune, or at least a sizeable chunk of their retirement savings. 

Whether you’re brand new to Medicare, approaching Medicare age or a seasoned vet, beware of these common pitfalls.  

Medicare Mistake #1: 

Not Enrolling on Time

Enrolling in Medicare can save you a considerable amount of money on your health care, but only if you enroll on time. 

Many people are automatically enrolled in Medicare Part A and Part B. You may be required to manually sign up for Medicare, however, depending on your circumstances. 

If you fail to enroll in Medicare Part B during your Initial Enrollment Period (a seven-month window that begins three months before you turn 65) but eventually enroll at a later date, you could be subject to a 10 percent penalty for every 12-month period that you were eligible to enroll in Part B but didn’t.  

And that’s not just a one-time fee, either. The 10 percent late enrollment penalty will be applied to your monthly Part B premium for as long as you remain enrolled in Part B.

In 2022, the standard Part B premium is $170.10 per month. So even if you are just one year late to sign up and didn’t qualify for a Medicare Special Enrollment period, you’d be on the hook for an extra $17 per month (10 percent of $170.10) added to your Part B premium. Over the course of a year, your late enrollment penalty would equal $204. 

Over the course of 10 years, you would pay more than $2,000 in late enrollment fees, and that’s without factoring in any Part B premium increases. 

You can delay Part B enrollment with no penalty if you have what Medicare considers “creditable” health insurance coverage. Insurance provided by your employer or union could count as creditable coverage, but it depends on the size of the organization. 

Confirm with your health insurance provider as well as with the federal Medicare program to confirm whether your coverage qualifies. 

And don’t forget: Medicare Part A (hospital insurance) and Part D Medicare prescription drug plans also have late-enrollment penalties of their own. 

Medicare Mistake #2: 

Forgetting the Lack of an Out-of-Pocket Spending Limit

Original Medicare (Part A and Part B) does not have an annual out-of-pocket spending limit. That means you are responsible for an uncapped amount of copayments and coinsurance for Part A and Part B coverage over the course of a year. 

With surprise high medical costs being the number one reason for personal bankruptcy in the U.S., this could be a vulnerable spot to be for the average American.

Take a discectomy for example, which is a common procedure in older adults to alleviate lower back pain. When performed at an ambulatory surgical center, a Medicare patient can expect to pay around $2,700 out-of-pocket for a discectomy in 2022. 

Fortunately, there are ways to protect yourself. 

• Medicare Advantage (Part C) plans sold by private insurance companies often come with no monthly premium (though you still pay your monthly Part B premium) and are required by law to include an annual in-network out-of-pocket maximum of no more than $7,550 in 2022 (with many plans offering far lower limits). 

• Medicare Supplement Insurance (Medigap) plans cover the costs of certain Medicare copays, coinsurance and other expenses. Having protection for those out-of-pocket costs can help save you money when you get Medicare-covered care. Certain Medicare Supplement plans also include annual out-of-pocket spending limits.

It’s important to note that Medicare Advantage plans and Medicare Supplement plans aren’t the same thing, and you can’t have each type of plan at once.

Medicare Mistake #3: 

Not Reviewing Your Plan Options Every Year 

Medicare beneficiaries have an opportunity to switch to a more affordable plan every year, but too many fail to take advantage. 

Medicare’s annual open enrollment period takes place from October 15 to December 7 each fall. You can perform a number of actions during this period, such as switching from one Medicare Advantage plan or Part D plan to another. 

Prior to the beginning of fall Medicare open enrollment, beneficiaries receive a notice from their current plan carrier that lists the details of any cost or coverage changes to their plan for the upcoming year. With the average beneficiary enjoying access to 39 different Medicare Advantage plans in 2022, it’s wise to at least spend a few minutes comparing your plan premium with the others available in your area to see if you can save by switching.  

Enroll on time. Put some out-of-pocket protection in place. Review your costs every year to see if you can save. Do these three things and your Medicare will do the very thing it’s designed to do: save you money on your health care.   

Christian Worstell is a senior Medicare and health insurance writer with He is also a licensed health insurance agent. Christian is well-known for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.  

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