Medicare is the most widely-used federal entitlement program, providing comprehensive health insurance for over 59.9 million individuals[1]—primarily for people aged 65 and older. Last month, we covered a few myths about Medicare. This month, we’re covering a few more.
Myth 1: Medicare Includes Prescription Drug Coverage
False. Original Medicare doesn’t automatically come with prescription drug benefits. If you have Original Medicare, you must enroll in Part D for prescription drugs with a private insurance company. That is billed separately.
Medicare Advantage plans typically cover prescription drugs as part of your complete bundle of services.
Once you decide on the Original Medicare or Medicare Advantage route, you can make an additional prescription drug coverage purchase as needed.
Myth 2: Medicare pays for medical expenses in a foreign country
False. For you world travelers, this is very important to understand. Original Medicare does not pay for medical expenses you incur when you travel to a foreign country and need care. Medicare Advantage plans may offer limited benefits. If you are a worldly traveler and plan to spend retirement overseas from time to time, many Medigap plans offer coverage for treatment and transportation. You can also purchase travel insurance to protect yourself.
Myth 3: I can enroll in Medicare or change my plans at any time
False. This is another common misconception. There are steep penalties if you don’t enroll during the proper Medicare annual enrollment period. You can enroll in a Medicare plan three months before your 65th birthday and three months later. Once that window passes, you have to wait until the annual enrollment period (October 15-December 7 every year) to change your Original Medicare plan and any supplemental insurance coverage. If you have a Medicare Advantage plan or wish to enroll in a different plan or switch back to Original Medicare, that annual enrollment period is Jan. 1-March 31 every year.
We think this covers a few of the big Medicare questions. In our experience, the most important thing to understand is that turning 65 and enrolling in Medicare does not solve all health insurance-related issues. Too many people assume Medicare means they’ll never pay a premium or a medical bill for the rest of their lives. While Medicare is a popular and important social program, it’s still wise to know the features of this major part of your retirement.
Notes:
[1] https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2019.pdf
Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice.