How to avoid mistakes when switching Medicare

Modifying your Medicare plan may appear to be a wise decision—and it frequently is. Whether your goal is to reduce expenses, enhance coverage, or gain access to new healthcare providers, changing Medicare plans can provide valuable opportunities. However, it’s important to note that Medicare is governed by numerous regulations, deadlines, and intricate details. A single misstep can result in significant complications or even substantial financial burdens.

To assist you in avoiding the most prevalent errors, we’ve compiled this straightforward, easy-to-understand guide highlighting the major mistakes individuals make when altering their Medicare plans—and how you can avoid them. Let’s dive in!

Mistake #1: Missing the Right Enrollment Period

Timing is crucial. One of the most frequent errors related to Medicare is attempting to change plans outside the designated enrollment periods. The primary times when you can modify your Medicare plan include:

  • Initial Enrollment Period (IEP): This occurs when you first become eligible, typically around your 65th birthday. You have a 7-month window to enroll in Medicare Part A and B, a Part D prescription drug plan, and even Medicare Advantage or Medigap.
  • Open Enrollment Period (October 15 – December 7): During this timeframe, you can transition from Original Medicare to a Medicare Advantage plan (or vice versa) and make adjustments to your Part D plan.
  • Medicare Advantage Open Enrollment Period (January 1 – March 31): If you are already enrolled in a Medicare Advantage plan, you can switch to a different Advantage plan or revert to Original Medicare.
  • Special Enrollment Periods (SEPs): You may be eligible for one if you experience a change of residence, lose coverage, or undergo a significant life event (more details on this will follow).

Helpful tip: Always verify which enrollment period is relevant to your circumstances before making any changes. If you believe you may qualify for a Special Enrollment Period (SEP), consulting a licensed Medicare specialist can help confirm your eligibility.

Mistake #2: Assuming Medicare Covers Everything

Many individuals are often taken aback to discover that Original Medicare Parts A and B do not provide comprehensive coverage. In reality, several essential healthcare services—such as dental care, hearing aids, vision examinations, and prescription medications—are excluded.

To address these coverage gaps, you may need to consider additional options, including:

  • A Part D plan for prescription drug coverage
  • A Medigap (Medicare Supplement) plan to assist with copayments, deductibles, and coinsurance
  • A Medicare Advantage plan, which typically offers bundled coverage

It is crucial not to make assumptions. Instead, inquire about specifics, examine the details of your plan, and ensure that the coverage aligns with your actual healthcare needs—particularly concerning chronic conditions or planned procedures.

Mistake #3: Not Enrolling When You First Become Eligible

Some individuals postpone their Medicare enrollment, believing they do not require it yet—especially if they are still employed at age 65. However, unless your employer’s coverage is deemed “creditable coverage,” this delay can have negative consequences.

Failing to enroll in Part B or a Part D plan at the appropriate time may lead to:

  • A Part B premium penalty: a 10% increase for each 12-month delay
  • A late enrollment penalty for Part D: added to your monthly premium if you lack creditable prescription coverage

If you are approaching 65, it is advisable to consult a Medicare advisor regarding your enrollment options, even if you are still covered by your employer.

Mistake #4: Dropping or Skipping Prescription Drug Coverage (Part D)

Some individuals may think, “I’m healthy—I don’t need a prescription drug plan.” However, Medicare has a different perspective. Unless you have creditable coverage from another source, opting out of a Part D plan could result in a penalty later on—even if you never require medication.

Moreover, if your health status changes unexpectedly (which can happen), not having a prescription drug plan may lead to exorbitant out-of-pocket expenses for necessary medications. Even if you currently don’t take any medications, enrolling in an affordable Part D plan can safeguard you against future costs and penalties.

Mistake #5: Ignoring Medigap and Health Condition Restrictions

Many individuals don’t realize that Medigap plans (Medicare Supplement plans) may refuse coverage or impose higher premiums if applications are not submitted during the Open Enrollment Period or if guaranteed issue rights are not applicable.

What are guaranteed issue rights? These rights provide safeguards that enable you to obtain a Medigap plan without facing denial of coverage or increased premiums. This is even if you have a pre-existing medical condition. Such rights come into effect under certain circumstances, including:

  • Loss of other health insurance (such as employer-sponsored coverage)
  • Transitioning from a Medicare Advantage plan back to Original Medicare
  • Relocating to a new area where your existing plan does not provide coverage

Failing to apply for Medigap coverage when you qualify for guaranteed issue rights may result in higher premiums or denial of coverage in the future, particularly if you have existing health issues.

Therefore, understanding the timing associated with Medigap plans is essential. It is important to be aware of when these rights are applicable to prevent incurring additional costs over time.

Mistake #6: Only Focusing on Monthly Premiums

While low premiums may seem appealing, they do not provide a complete picture. A frequent error in Medicare selection is opting for the least expensive plan without considering the overall cost of care. Before making a decision, carefully evaluate:

  • Deductibles
  • Copayments and coinsurance
  • Out-of-pocket maximums
  • Provider networks
  • Prescription drug coverage

In some cases, a higher premium may result in lower total costs, particularly if you require regular medical attention. Assess your current and anticipated health needs, and consider all expenses, not just the monthly premium.

Mistake #7: Switching Without Understanding the New Plan

It can be tempting to switch Medicare plans based on advertisements or recommendations from friends. However, what is suitable for someone else may not be appropriate for you. Frequently, individuals transition to a new Medicare Advantage plan only to discover:

  • Their healthcare providers are not in-network
  • Their medications are not included in the coverage
  • A referral is necessary to see a specialist
  • They must utilize a specific hospital or clinic

Always examine the Summary of Benefits, verify the provider directory, and ensure your medications are covered before making any changes.

Mistake #8: Assuming You’re Automatically Enrolled

Receiving Social Security benefits does not guarantee automatic enrollment in all Medicare parts. Here’s how the process works:

  • If you are receiving Social Security at least four months prior to turning 65, you will be automatically enrolled in Medicare Part A and Part B.
  • However, you must enroll separately in a Part D plan, Medicare Advantage, or Medigap based on your individual requirements.

It is important not to assume that enrollment is automatic. Consider creating a checklist or consulting with an advisor to ensure comprehensive coverage.

Talk to a Medicare Specialist Before You Make a Change

Navigating Medicare can be complex, and the implications for your health and finances are significant. Before making any changes to your Medicare plan—whether switching, dropping, or enrolling—why not seek personalized advice? Assistance from a Medicare specialist can guide you through the intricacies of enrollment periods, available plans, and coverage selections.

At Medicare Insurance AZ, we are dedicated to helping you make well-informed choices that align with your specific requirements. Whether you are transitioning between plans, enrolling for the first time, or simply assessing your options, our knowledgeable experts will offer you clear and concise guidance.

Avoid the risk of costly errors—schedule a free consultation today with a licensed Medicare agent who is well-versed in the details of Medicare in Arizona. We will ensure that you receive the necessary coverage without any unexpected issues!
Reach out to us now to discover how we can support you!