JOEL MEKLER: Medicare misconceptions can be costly

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“No one told me” are four words that I hear repeatedly from Medicare beneficiaries.

Arguably, Medicare has become increasingly complex. But very often people go down the wrong path because they rely too much on the advice of family members and friends. Here are five misconceptions people have about Medicare enrollment.

I’m not eligible for Medicare until I claim full Social Security benefits.

Prior to 2008, people signed up for Social Security and Medicare at age 65. This was because Security’s “full retirement age” and Medicare eligibility were the same. But just being eligible for Medicare doesn’t mean you must sign up at 65.

The “Full Retirement Age” under Social Security has been steadily rising. “Full Retirement Age,” by the way, is the age in which benefits are not reduced by early claiming reductions or hit with earnings test reductions. The “Full Retirement Age” moved in two-month increments from 65 in 2002, for people born in 1937 or earlier, to 66 in 2009, for those born from 1943 to 1954. It will stay there until 2020 and then begin moving again in two-month increments, for people born from 1955 to 1959, settling at 67 by 2027, for anyone born in 1960 or later.

The big picture here is that we no longer have two programs, where people elect benefits at the same time. We have two programs with an enormous range of different claiming patterns. This is a big deal for Medicare because it means you can’t simply assume you will need Medicare as soon as you turn 65.

You can’t be forced to get Medicare if you are actively covered by a group health plan and you work for an employer that has 20 or more employees. Medicare is usually the secondary payer in this instance and your employer group plan is primary. Most people can delay Part B in this situation until they retire. On the other hand, it is generally suggested to sign up for Part A when you turn 65. In most cases, doing so has no downside because Part A requires no premiums if you or your spouse has contributed enough payroll taxes at work. One situation, however, comes with a very good reason for delaying Part A as well as Part B until you stop work. Your employer health insurance takes the form of a high-deductible plan paired with a Health Savings Account.

I’ll be notified by Social Security when it’s time to enroll in Medicare

Clearly you don’t want to be late enrolling for Medicare, but that doesn’t mean the program will necessarily notify you that it’s time to enroll. Here’s the good news: If you are claiming Social Security benefits before 65, Social Security will automatically send your Medicare card in the mail. Your card will show that you have both Part A and Part B. If you opt out of Part B you should notify Social Security and send the card back. Note that you can still enroll in Part D as long as you have Part A or Part B.

If you aren’t receiving Social Security benefits when you turn 65, you will have to sign up for Medicare A and/or Part B during your Initial Enrollment Period. This enrollment period begins three months before your 65th birthday, includes the month that you turn 65, and ends three months later. If you fail to enroll in Part B or Part D, you could face a late enrollment penalty when you do eventually enroll in Medicare. Worse yet, this monthly penalty follows you around for the remainder of your life (for as long as you’re enrolled in Medicare).

I don’t need to enroll in Medicare because I have retiree health insurance.

The one simple rule to keep in mind if you are among those who have private retiree health insurance is that retiree plans always pay secondary to Medicare. So, once you reach age 65 you must sign up for Original Medicare (Parts A and B) during your Initial Enrollment Period.

The laws that give protections to current employees in the last example does not apply to retirees or those on COBRA.

Think carefully before dropping your retiree health benefits. You’ve earned those benefits, and if you drop them you won’t likely get them back. Retiree health plans are diverse and are specific to each employer. In many instances your retiree plan supplements Medicare just like if you enrolled in a Medigap plan. Your retiree plan may also offer dental or vision care that is not covered by Original Medicare.

I will lose my Medicare coverage if I sign up for Medicare Advantage.

This is certainly not true. People with Medicare can get their health coverage through either Original Medicare or a Medicare Advantage plan. Advantage plans must provide the same benefits offered by Original Medicare, but they may apply different rules, costs, and restrictions. Advantage plans also may offer certain benefits that Original Medicare doesn’t cover. If you sign up for Original Medicare and later decide you would like to try a Medicare Advantage Plan or vice versa- be aware that there are certain enrollment periods when you are allowed to make changes.

I must get a Medicare Part D drug plan when I enroll in Medicare.

Enrolling in a Medicare Part D drug plan is voluntary; however, if you’re late in enrolling you may pay a penalty. If you get prescription drug coverage from another source (for example, current or retiree insurance), and the drug coverage is considered creditable, you don’t have to sign up for Part D at all. However, if your employer’s drug plan is considered non-creditable, it’s best to sign up for Medicare Part D coverage as soon you are eligible. You will have 63 days to enroll in a Medicare Part D plan once you retire.

I repeatedly receive calls from people who question why they should take out a Part D plan if they are taking no drugs. No one has a crystal ball that will allow them to peer into the future. The point here is that Part D is insurance, just like homeowner’s insurance and auto insurance. Even if you are healthy now, you should enroll in a Part D plan. Pick a drug plan with the lowest premium in your area. That way, you have coverage, if or when you need it. You also don’t have to worry about incurring a Part D late enrollment penalty.

Joel Mekler is a certified senior adviser. Send him your Medicare questions at

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