Retirement can become more expensive with Medicare mistakes.
There are many benefits to leaving the workforce for retirement.
You have more freedom for hobbies, friends, family, and travel.
Retirement also comes with new responsibilities and decisions.
According to a recent Money Talk News article titled “5 Medicare Mistakes to Avoid for a Healthy Retirement,” navigating Medicare can be particularly daunting for many new retirees.
This is not surprising considering that the length of the official guide to Medicare is itself about 120 pages.
Knowing and applying the rules and guidelines to your specific circumstances is challenging with the shear volume of information.
Although Medicare mistakes are understandable, they are also costly.
If you are almost 65 and have not yet enrolled in Medicare, consider the common missteps made by others.
Not taking advantage of the “freebies.”
Most people like the word “free,” right?
The word is especially appealing when you are on a fixed income during your retirement years.
Medicare recipients are often eligible for some medical services and products with no charges attached to them.
Missing your annual chance to switch plans.
Like traditional health insurance, open enrollment is the time when you can evaluate and update your Medicare coverage.
Start researching the available plans and their costs for the coming year to avoid making costly Medicare mistakes.
For example, some medical providers may no longer accept your current plan.
Evaluate whether your hospital, doctor, and pharmacies of choice are available on the plan you want.
Good resources to use during open enrollment include the Medicare Plan Finder from the government, the current “Medicare & You” handbook, the Evidence of Coverage document, and the Plan Annual Notice of Change document.
Losing in-network access.
Choose health care providers who are covered in your Medicare plan.
Seeing a physician outside of your network can be a costly Medicare mistake and result in your insurance provider denying payment for a bill or in higher co-payments.
Losing Medigap coverage.
You can get a Medigap policy to supplement your Original Medicare plan.
These supplemental policies from private insurers can provide payment for costs not fully covered by an Original Medicare plan.
A Medigap policy is not an option if you have Medicare Advantage plan.
Carefully consider making a change to a Medicare Advantage plan if you have a Medigap policy.
You are only guaranteed coverage by a Medigap plan during your initial Medigap enrollment period when you are first eligible to sign up for Medicare.
This means the insurance companies cannot deny covering you due to pre-existing conditions.
By switching to a Medicare Advantage plan, you may be prohibited from certain Medigap plans or pay much more for coverage should you choose to switch back.
A tax penalty for HSA contributions.
There are rules against making contributions to your health savings account (HSA) while you are on Medicare.
You must stop making contributions the month prior to when your Medicare Part A coverage begins.
This can be as early as six months prior to applying for Social Security or Medicare.
Take action early to ensure you do not make costly Medicare mistakes during retirement.
Reference: Money Talk News (June 7, 2021) “5 Medicare Mistakes to Avoid for a Healthy Retirement”