In 2018, a Nationwide Retirement Institute survey found that despite nearly 86 percent of older adults being enrolled in – or planning to enroll in- Medicare, a whopping 72 percent wish they had a better understanding of Medicare coverage. The study further found the following as misconceptions that people have about Medicare1:
- 53% didn’t know that Medicare Part B isn’t free, even if you’ve worked and paid Social Security taxes for 10 years or longer
- 23% didn’t know that Medicare enrollment has a specific time period and time constraints
- 29% didn’t know that Medicare costs are not the same for everyone
Some other misconceptions include people believing that Medicare covers everything, and that Medicare and Medicaid are the same thing. Let’s look at some of these common misconceptions, or myths.
Myth #1: Medicare Part B Is Free
If only it were so! Medicare Part B is not free. You may pay premiums, deductibles, copays and coinsurance out of pocket, just like with any health insurance plan.
In fact, no part of Medicare is completely free. While with Part A, you may qualify to have no premium, you will still have a deductible, copay and coinsurance. Medicare Advantage (Part C) may offer low- to no-cost premiums, but they also will include other costs. And, if you have Part D coverage, you may have a premium for that as well.
Myth #2: You Can Enroll in Medicare Whenever You Want
False! You can enroll in Medicare if you meet certain qualifications and for a specific amount of time. There are rules for each of these enrollment periods, and if you fail to adhere to them, you could end up paying financial penalties.
Most people qualify for Medicare when they are about to turn 65, but you can also become eligible via qualified disabilities and medical conditions. For age and disability, you will have a 7-month Initial Enrollment Period.
The Medicare Initial Enrollment Period
Three months before the month of your 65th birthday is when most people become eligible to enroll in Medicare for the first time. This is the start of what’s known as your Initial Enrollment Period, and it lasts 7 months. For those enrolling via disability, you will have an Initial Enrollment Period that begins after you’ve received disability benefits for 24 months, and if this happens before you’re 65, you’ll get another one at age 65.
You can learn more about the Initial Enrollment Period here.
Special Circumstances: Medicare When Working Past 65
The only exception to the rule above is for people who work past 65 and are qualified to delay enrolling because they have creditable coverage from an employer. For this group, they can enroll in Medicare immediately after losing their employer coverage during a Special Enrollment Period. This period allows them to get Parts A and B within eight months, but they only have the first two months to enroll in Part C or Part D without penalty.
You can learn more about Medicare when working past 65 here.
Myth #3: Medicare Costs the Same for Everyone
Nope. The exact amount you will pay for Medicare depends on the specific Medicare coverage you have, the health services and items you use each year and whether or not you have financial assistance for Medicare.
Myth #4: Medicare Covers Everything
When people think “Medicare covers everything” they are referring to Medicare Part A and Part B. But the fact is, Part A is hospital insurance and only covers hospital stays and associated inpatient services. Part B is medical insurance and generally covers doctor and outpatient visits and associated services.
Medicare Parts A & B do not cover the below:
- Prescription drugs
- Dental, Vision or Hearing health care services
- Special benefits like coordinated care or transportation for doctor visits
These are just some of the things Parts A and B don’t cover. With prescription drugs you’ll have to either get a Part D stand-alone plan in addition to Parts A and B or enroll in a Medicare Advantage plan that includes prescription drug coverage. The other benefits are often only provided within Medicare Advantage plans, and each plan will vary in terms of what benefits they cover and how.
Myth #5: Medicare and Medicaid Are the Same
This is just not accurate. Both Medicare and Medicaid are government programs. Both programs help people pay for health care. But that’s where the similarities end.
Medicare is generally for people who are older or disabled. Medicaid is for people with limited income and resources. Medicare is governed by the federal government. Medicaid programs are governed by the states. The federal government sets qualifying income and resource levels, but each state decides what counts when calculating this for an individual.
People who qualify for both Medicare and Medicaid are said to be “dual eligible.” If you qualify and enroll in both programs, then the two may work together to cover most of your health care costs. Get more information about being dual eligible.