The Top 6 Mistakes Seniors Make When It Comes to Medicare Enrollment

Sign Up Now, Save Money Later

Premiums, deductibles, copayments and coinsurance. These are expected costs when it comes to any health insurance plan. Medicare is no different.

What many people do not anticipate are the added fees that come with Medicare, especially when you sign up too late. Medicare Parts A, B, and D each has its own set of late penalties. The cost to you could range anywhere from hundreds to thousands of dollars over your lifetime. There are many other costly mistakes people make when signing up for Medicare.

1
You Assume Medicare Enrollment is Automatic

automatic enrollment
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If you are already receiving a Social Security check when you turn 65 years old, whether it's for retirement or disability benefits, you will be automatically enrolled in Medicare Parts A and B. If you are not yet receiving Social Security benefits, you must enroll for all Medicare parts on your own.

In either case, don't forget to sign up for Part D if you want prescription drug coverage. This will never be automatic.

When the retirement age was 65 years old, Social Security and Medicare benefits went hand in hand. This all changed in 1983 with a set of amendments that gradually increased the age you could collect full Social Security benefits. Now anyone born before 1937 is eligible at 65 years old, and anyone born after 1960 is eligible at 67 years old. Many people fall somewhere in between, meaning their Medicare and Social Security benefits will be out of sync.

2
You Do Not Sign Up for Medicare When You Turn 65

65 years old
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There are two ways to become eligible for Medicare. The first is by having a qualifying disability, the other is by age. The majority of Americans become eligible for Medicare when they turn 65 years old.

You can sign up three months before and up to three months after your 65th birthday. When you include your birth month, this gives you a full seven months to sign up for the program.

Miss this ​Initial Enrollment Period and you may be on the hook for late penalties for Medicare Parts A, B, and D. These penalties could cost you hundreds to thousands of dollars as long as you are on Medicare. 

3
You Do Not Sign Up for Medicare Because You Are Still Working

employer-sponsored health plan and Medicare still working
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Some people believe they do not have to sign up for Medicare until they retire and no longer have access to an employer-sponsored health plan. After all, no one wants to pay for more than one health plan.

The choice can be easy for some people but certainly not for everyone. It all depends on the size of the company that hires you.

If the company you work for employs less than 20 full-time workers, Medicare will require you to sign up during the Initial Enrollment Period based on your 65th birthday. This means you will be with late penalties if you wait for retirement to sign up.

If you work for a company that employs more than 20 full-time workers over the year, Medicare allows you to delay your Initial Enrollment Period. Instead, you can sign up during a Special Enrollment Period that begins the day you leave your job or lose your employer-sponsored health plan coverage, whichever comes first, and lasts for eight months. Sign up later than this, and you will be forced to pay those late penalties.

4
You Do Not Sign Up When You Are Overseas

Medicare overseas foreign country
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If you live overseas, defined as living out of the country for 30 or more consecutive days, and you actively receive Social Security benefits, you may be automatically enrolled in Medicare Part A when you turn 65. You are responsible to sign up for Parts B or D on your own. Part B enrollment is not automatic like it is when you live in the United States.

You may not be able to collect Social Security benefits in all countries.

If you live in one of these excluded countries, you will have to enroll yourself in Part A too to avoid late penalties since your enrollment will not be automatic.

Interestingly, you may not be able to use your Medicare benefits outside of the country. You have to look at the pros and cons of paying premiums when you live outside of the country vs. paying penalties when you sign up at a later time. Which will cost you more over time?

5
You Do Not Sign Up Because You Are a Veteran

veterans choice program and medicare
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The Veterans Health Administration (VA) offers health benefits to those who served in the U.S. military. Free care is provided to qualifying veterans at designated VA hospitals, clinics, and residential facilities.

Unfortunately, health care at the VA has had its share of controversies over the years, the biggest of which has been access and long waiting times for appointments at VA facilities.

Thankfully, in 2014, President Obama enacted the Veterans Access, Choice, and Accountability Act that allowed veterans to access care outside of those facilities, and in 2017, President Trump added $2.1 billion in funding to the program.

While the VA is aiming to expand care options, there may be times when you do not have access to a VA approved center. Medicare may provide extra coverage to get you the care you need.

6
You Do Not Sign Up When You Are Incarcerated

incarceration prison jail Medicare
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Healthcare you receive during incarceration is paid for by the penal system, not by Medicare. This does not mean you should skip signing up for Medicare when you become eligible.

If you receive Social Security benefits and turn 65 years old while you are incarcerated, you will be automatically enrolled in Medicare but timing is everything. Social Security suspends your benefits after 30 days of imprisonment.

It could be that you are not automatically enrolled if you have been behind bars too long. This means you will have to enroll yourself or face late penalties once you are released.

Sources:

Do I Still Need Medicare Parts A and B If I Receive My Health Care from VA? U.S. Department of Veterans Affairs website. https://iris.custhelp.com/app/answers/detail/a_id/553. Updated March 15, 2013.

Payments Outside the United States. Social Security Administration website. https://www.ssa.gov/international/payments_outsideUS.html.

Retirement Planner: Full Retirement Age. Social Security Administration website. https://www.ssa.gov/planners/retire/retirechart.html.

Veterans Choice Program.U.S. Department of Veterans Affairs website. https://www.va.gov/opa/choiceact/. Updated August 14, 2017.

A Word from Verywell

Medicare is not free. Premiums, deductibles, copayments and coinsurance are part of most any health plan. Late penalties, however, can be avoided. Do not let health care cost you more than necessary. Avoid these common mistakes and save money.

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