20 Things Seniors Don't Know About Medicare

Medicare coverage and regulations are complex. On top of that, new Medicare supplements (Medigap) have been introduced over time and coverages have changed. Nothing in the world of insurance is ever permanent, so even annual Medicare premiums change each year.

Some older adults wrongly think Medicare is free – and it’s not. Plus you have a wide range of coverage options, some of which will fit your lifestyle while others won’t. Besides all that, it is a good idea to understand how Medicare works and what’s covered before you buy into a plan or plans.

If you find yourself pulling out your hair trying to grasp the most important information you need to know to make the best healthcare decisions, it may make sense to go over a list of things you don’t know about Medicare. Here’s what you need to know.

1. Different Types of Medicare

Most seniors don’t realize that Medicare has different parts and that they pay for some of them. The most common Medicare bundle is Part A (hospital), Part B (services) and Medicare Part D (prescription drugs coverage). Most people don’t know that there is a Part C (Medicare Advantage or MA) plan that combines Parts A, B and D and may even offer dental and vision services.

2. Medicare Isn’t Free

Medicare has costs, but you don’t get a bill for Medicare because the monthly premiums are subtracted from the social security check you receive each month. Part B of Original Medicare has a premium, which goes up a small amount each year. For 2024, Part B out-of-pocket costs $174.70.

3. There a Fine for Signing Up Late

You are not automatically enrolled in Medicare at age 65. Unless you’re receiving social security payments at age 65 you will need to sign up for medicare or else you’ll see an increase of 10% for each full 12-month period that you failed to enroll despite eligibility.

You're eligible to apply for Medicare three months before your 65th birthday.

4. Medicare Part C May Be More Cost Effective

Dental, vision and hearing needs only become greater as you age. Some Medicare Part C plans cover optometrists, hearing aids and even dental work. These coverages could save you hundreds of dollars a year.

5. Medicare Part C Plans Have Varying Premiums

When you shop around for Medicare Part C plans, it’s important to note how much the premiums are and how much coverage is included. For instance, if there’s a small premium but you get dental, vision, hearing and gym discounts, you may save money over the course of a year. There are some $0 a month Medicare Advantage plans, but make sure they offer what you need.

6. There Are Coverage Limits for Medicare

If you are hospitalized, Medicare Part A will cover 100% after you reach the deductible amount, but only for a limited time. After 60 days, you share the cost, and after 90 days, you are responsible for 100% of the charges.

7. You Have 60 Lifetime Reserve Days

What this means is that if you’re in the hospital longer than 60 days, you can use your reserve days to avoid paying out of pocket. These reserve days do not renew so use them wisely!

8. There's a Copay for Part B

Yep, when you get medical services, you’re responsible for 20% of the bill. That’s all on top of the $174.70 premium (Your exact amount may differ based on when you enrolled or if you’re still working.).

9. Preventative Services Are Free

Your usual screenings, like mammograms and prostate checks, are all free of charge. You should not get billed by any third-party vendors.

10. Networks for Medicare Advantage Plans

Not all doctors who take Medicare take each kind of Medicare Advantage plan, so make sure to ask your service provider which plans they take before you shop around. Some Part C plans only cover certain regions as well, so ask questions if you plan to travel outside of your coverage zone regularly.

11. Your Prescription Medications Aren’t Always Covered

You’re either buying a Part D plan (medigap) or you’re buying a Medicare Advantage (Part C) plan that includes drug coverage. Both of these types of drug coverage vary according to the insurance company’s list of covered medications, called a formulary. When you’re shopping around for plans, ask for that formulary to make sure your drugs or their generic versions are covered.

12. The Medicare Donut Hole

The Medicare donut hole is when prescription and generic drugs have reduced coverage in Plan D. When you reach the initial coverage limit of $5,030 and after spending $8,000 out of pocket, you are in the donut hole. After that you have catastrophic coverage and pay nothing for drugs for the rest of the year. The donut hole used to be much worse, until 2020 when it leveled off at 25% of covered Part D drugs.

13. Medigap May Cover Travel

Did you know that some C, D, E, F, G, H, I, J, M, and N Plans cover you while you travel? Only certain C, D, G, M, and N plans cover travel abroad. There is a catch though. Treatment must occur 60 days after travel or sooner, and there is a $250 deductible that you’re responsible to pay out of pocket. The plans only cover 80% of medical costs, and there is a lifetime maximum coverage of $50,000.

14. You Can Switch Medicare Plans Each Year

Whether it’s to switch from Medicare to Medicare Advantage or if you want to buy Medigap and switch back to Original Medicare, use SmartFinancial to get the best plan at the right price, maybe even at a $0 deductible. You can always keep the plan but switch companies if you don’t like the customer service. You can also compare prices on Medicare plans to see if you’re paying too much.

Open enrollment begins October 15th and ends Dec 7th.

15. You Have to Switch to Medicare if You Have an ACA Plan

Because Affordable Care Act (ACA) plans are subsidized, you’re required to switch to Medicare at age 65.

16. You Don’t Have To Get Medicare at Age 65

If you have an employer-sponsored health plan that is comprehensive, you don’t have to enroll in Medicare at age 65 (though you do pay more for each year you defer), unless your employer requires you to enroll in Medicare and use the work-sponsored health insurance plan as secondary coverage.

17. You Must Enroll in Medicare Through Social Security

Even private Medicare Advantage plans are regulated by the federal government, to be in compliance with Medicare requirements.

18. Medicaid May Help

If you have a hard time paying your Medicare out-of-pocket expenses, Medicaid may help you cover some expenses. It’s worthwhile to apply.

19. Medicare Doesn’t Cover Dependents

Each Medicare beneficiary has their own plan that covers only their services and treatments. If your spouse paid Medicare taxes, they can qualify on their own.

20. Medicare Does Not Cover Assisted Living

Medicare covers acute care in most cases only. In some instances, if the Medicare recipient is homebound, Medicare pays for some nursing and skilled care needs, but not for custodial care, as long as the attending physician signs off the case as medically necessary. Nursing home care is covered for acute conditions only for 100 days or less.