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Don't make this costly mistake - when signing up for Medicare

Darryl Rosen • Aug 31, 2022

Don't waste your valuable time reversing a bad decision

Medicare open enrollment begins in October (which is right around the corner) so this morning I’d like to share one of the biggest mistakes people make during this critical period in the hopes that you don’t do this!

If you consume any media between now and October 17th (TV, Radio, INTERnet) you will be barraged with ads.

The biggest mistake is that most people start the process by picking a Medicare plan based on the barrage of ads they receive in the mail, see on television or hear on the radio, particularly amid the advertising blitz during fall open enrollment, which runs from Oct. 17 through Dec. 7 each year. 

The process should be started by asking your doctors which type of Medicare they accept.

Regardless of which type of Medicare coverage you choose, you must first enroll in both premium-free Medicare Part A, which covers hospitalization, and Part B, which covers doctors’ fees and outpatient services for a monthly premium. The standard Part B premium is currently $170.10 per month in 2022, but higher-income beneficiaries pay more.

[For this post I am assuming you are not covered by an employer’s plan - that is a subject for another day!]

Medicare only pays for 80% of allowable costs. To cover the remaining 20% of costs, you can buy a Medigap policy that pays for the deductibles and co-insurance of original Medicare, as well as a Part D prescription drug plan.

Or you can choose to bundle your coverage with a Medicare Advantage plan, which often comes with lower monthly costs, but charges per-visit co-pays. If you enroll in a Medicare Advantage plan, also known as Medicare Part C, you can’t buy a Medigap policy. 

Advantage plans usually include extra benefits, such as dental, vision and prescription drug coverage, but require you to use network providers that sometimes want prior approval for specialty care.

Many people are swayed by the lower monthly costs and extra benefits offered by Medicare Advantage plans and figure that if they don’t like the network restrictions, they can always switch to original Medicare later. But that can be difficult.  

When you first enroll in Medicare, there’s a six-month widow during which you can buy any Medigap plan you want. After that, you would be subject to medical underwriting and could be denied Medigap coverage, meaning you would have to stick with an Advantage plan.

Lots of details. Lots of decisions. Do your research to make the right Medicare decision the first time — or speak to someone who can guide you. I have resources so message me and I can suggest someone. 

Making a good decision will bolster the sustainability of your retirement income plan.

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