3 Medicare Mistakes to Avoid

Are you planning for retirement or nearing your 65th birthday? As you get closer to being eligible for Medicare, it’s easy to feel overwhelmed by the number of deadlines, enrollment periods, and options out there—luckily, you have an advisor in your corner who can make it simple. Knowing these common Medicare mistakes can help you do things right when your initial enrollment period comes.

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Mistake 1: Missing Your Initial Enrollment Period 

Your initial enrollment period (IEP) is the seven-month window that surrounds your 65th birthday. It begins three months before your birth month, includes your birth month, and ends three months later. For example, say your birthday is July 10. Your IEP would begin in April and run through October. This period is the first time most people are eligible to enroll in Medicare.

Missing your initial enrollment period can have financial consequences, some of which stay with you forever. For instance, if you don’t enroll in Medicare Part B when you’re eligible, your premium will go up by 10 percent for every 12 months that you miss. This premium increase is permanent—so the longer you wait, the more you pay.

Similarly, Medicare Part D charges a fee for each month that you are eligible but not enrolled or covered by creditable coverage. That fee is calculated as one percent of the year’s national base beneficiary premium, which changes each year. In 2022, this fee amounts to 34 cents for every month you didn't enroll in Medicare Part D when you were initially eligible.

If you are covered by employer health benefits, you may be able to delay Medicare enrollment until your employment or coverage ends without the risk of late fees or penalties. Mark important deadlines or speak with an advisor to make sure you understand what the next steps are for your situation; that way you can avoid fees and penalties.

Mistake 2: Enrolling in Social Security Too Early

Avoid assuming you must begin taking your Social Security payments when you enroll in Medicare. While you can begin receiving Social Security benefits when you turn 62, you permanently lose a percentage of your benefits coverage for every six months that you enroll prior to your full retirement age. For those turning 65 in 2022, the full retirement age is 66 and six months.

Even if you’re enrolling in Medicare during your initial enrollment period, it may be in your best interest to wait to enroll in Social Security until you reach full retirement age. If you’re in a position to wait longer—until the age of 70, for example—you can earn even more benefits. For each month that you delay accepting benefits between full retirement age and age 70, Social Security benefits will increase by ⅔ of a percentage point; this totals eight percentage points per year. However, delayed retirement credits stop accruing when you turn 70.

While there’s no benefit to waiting beyond age 70, it can be worth your while to put off Social Security until that point. Consider your circumstances and whether delaying Social Security is right for you.

Mistake 3: Assuming Your Spouse’s Health Coverage Is Right for You

The transition to Medicare is significant, particularly for couples where one spouse’s employer group benefits insure both individuals. Unlike employer coverage, you cannot have dependents on a Medicare plan. Each individual person needs to enroll in the proper plan for their needs. Avoid assuming you will be covered by your spouse’s plan when they enroll in Medicare.

Being on the same plan as your spouse may seem like a simpler way to enroll in Medicare. Yet it could result in improper coverage for your own health care needs. If you have different prescriptions, doctors, or health concerns, you need to find coverage that allows you to care for yourself properly, regardless of your spouse’s benefits. As you shop for a plan, be sure to check preferred pharmacies if you and your spouse like to have your medications filled at the same place. The easiest way to verify this is to let our advisors do the research for you.

Local Advisors with Trusted Advice

Approaching your Medicare eligibility and initial enrollment period can be an exciting time. As you prepare to navigate the world of Medicare, our advisors are here to support you. Whether you have questions about these Medicare mistakes, how to enroll in Medicare, or how to find the right coverage for your needs, contact our Dayton- and Cincinnati-based advisors for guidance. Email advice@retiremed.com or call 855.981.8611 to get started!