Avoid Medicare Mistakes: A Comprehensive Guide for New & Existing Beneficiaries

Once you turn 65, having the ability to get Medicare can provide significant relief. By getting Medicare coverage, you can get the essential insurance coverage you need for medical and hospital services. Unfortunately, Medicare can be surprisingly complicated.

According to the Centers for Medicare and Medicaid Services, there are 61.2 million Medicare beneficiaries in the U.S. If you already have Medicare or you’ll soon be joining that number, it’s important to understand how Medicare and the open enrollment period work so you can avoid making one of these common (and sometimes very costly) mistakes.

Ignoring the open enrollment period

After your initial enrollment when you turn 65, you need to know when each Medicare open enrollment period occurs. Every year, the Medicare open enrollment period runs from October 15 through December 7.

During open enrollment, you can make changes to your insurance coverage and/or enroll in a new Medicare plan. It’s a good idea to use this time to review your plan and other available options. Coverages and pricing can change from year to year, so it pays to compare different plans to see whether there’s a better option for you.

Compare top-rated medicare plans (It's simple to do - just fill out the form to be connected with a licensed agent who can walk you through custom Medicare Advantage options.)

Not understanding your out-of-pocket costs

One of the most costly retirement mistakes people make with Medicare is that they assume it’s completely free. But although Medicare will likely cover a substantial portion of your health care costs, you’ll still be responsible for some charges.

Many people make the mistake of shopping for insurance only by comparing premiums. But that could cost you a lot in out-of-pocket expenses. Sometimes a more expensive premium can actually result in net savings over the course of the year.

Each plan will have different costs based on the following factors:

• Premium: Your premium is how much you pay each month for your coverage. You have to pay your premium even if you don’t use any health services that month.
• Deductible: Your deductible is what you have to pay for health services before your insurance starts paying. Generally, the lower the deductible, the higher your premium will be.
• Copayment: After you reach your deductible, the copayment is a fixed amount you pay every time you visit a doctor or have a procedure done, such as $20 per visit.
• Coinsurance: Rather than a copayment, some plans use coinsurance. After you reach your deductible, you’ll pay a percentage every time you visit a doctor or have a procedure done, such as 20% of the office visit cost.

You can use the Medicare Out-of-Pocket Estimator to see how your coverage choices affect your costs.