4 Medicare Misconceptions
Excellent article excerpted from today's WSJournal:
Four Medicare Misconceptions
WSJournal FEBRUARY 20, 2011
The federal Medicare program is popular among older Americans, but that doesn't mean it's easy to navigate. It's easy to get confused, because the age to collect full Social Security benefits is moving up to age 67, but for Medicare eligibility is still 65.
Here are four common Medicare misconceptions:
1. Medicare works like private health insurance. With Medicare, if you're a high earner, you'll pay a premium surcharge for Medicare Part B, which covers doctors' visits and outpatient services, and Part D, which covers prescription-drug costs.
2. Medicare provides free or cheap health care. Under the new health-care law, as of this year beneficiaries can get annual wellness check-ups at no charge. For the first time, they also are eligible for free recommended preventive screenings, such as colonoscopies and mammograms. But that's where the freebies end.
Traditional Medicare involves a matrix of premiums, copays, coinsurance and deductibles. For instance, you'll have to meet a deductible -- $1,132 for 2011 -- before Part A coverage kicks in for hospital stays of up to 60 days. Most purchase a Medigap supplemental insurance plan to help cover out-of-pocket costs.
If you're a high earner (more than $85,000 if you're single, or $170,000 for a married couple filing jointly) you�ll pay a surcharge on Parts B and D over the monthly premium.
3. Medicare covers everything. Traditional Medicare doesn't cover routine dental care, eyeglasses, hearing aids or custodial long-term care. It generally won't cover health care you receive while traveling outside the U.S.
Medicare Advantage plans offered privately can offer additional benefits, but they typically come with more restrictive doctor and hospital networks. If you're healthy it might work out, but you might end up paying a lot more if you've got some chronic-care needs.
4. You can sign up for Medicare at any time. If you or your spouse are still working and getting employer coverage, it may make sense to delay signing up for Medicare to avoid paying premiums on coverage they don't yet need.
But incorrectly putting it off can cost you 10% of the Part B premium for every 12 months you delay enrollment. What's more, there may be a waiting period, during which you will be uninsured.
A job loss often triggers confusion. Take an older spouse who has been counting on his younger wife's employer health-insurance plan for his primary coverage. If the wife is laid off, he needs to sign up for Part B coverage right away to avoid a penalty. If she goes on Cobra, which extends employer group coverage to the departing worker for up to 18 months, he will have a special enrollment period of eight months to enroll in Part B without incurring a penalty.
As soon as regular employer insurance ends, the person with Medicare who had been relying upon employer coverage should immediately enroll in Medicare B.
If you're unsure when you should sign up for Medicare, ask your human-resources department or call the Social Security Administration. You also can contact your state health insurance assistance program (www.shiptalk.org), call Medicare (1-800-Medicare) or the Medicare Rights Center hotline (1-800-333-4114).