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6 Medicare Planning Mistakes You Can't Afford to Make In Retirement  Thumbnail

6 Medicare Planning Mistakes You Can't Afford to Make In Retirement

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It is important to start thinking about your healthcare coverage as you approach retirement. If you are 65 or older you will likely choose Medicare for your health insurance needs. Properly planning for your Medicare coverage during retirement is crucial to ensure that you have the coverage you need to stay healthy and financially secure. In this article, we'll discuss six common Medicare mistakes. 


Medicare is a comprehensive federal health insurance program designed to provide coverage for medical costs to individuals over the age of 65, as well as some younger individuals with disabilities.


A common mistake is not enrolling for Medicare on time.

The initial enrollment period for Medicare is a seven-month window that extends three months before your 65th birthday, and continues until three months after.

If you don't enroll in Medicare during the initial enrollment period and you don’t have a qualifying exception for enrolling late, you may have to pay a late enrollment penalty when you do finally enroll. This penalty is charged as a higher monthly premium that you'll have to pay as long as you have Medicare coverage.

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Another Medicare mistake is not understanding the different parts of Medicare. As mentioned earlier, Medicare is divided into four parts: Part A, Part B, Part C, and Part D. It's important to understand the coverage and costs associated with each part of Medicare to make informed decisions about your healthcare coverage during retirement.

Part A: Hospital insurance

Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care services. Most people don't have to pay a premium for Part A coverage because they or their spouse paid Medicare taxes while working.

Part B: Medical insurance

Part B covers medical services such as doctor visits, outpatient care, and preventive services. It also covers some durable medical equipment and certain home health care services. Most people pay a premium for Part B coverage and if you don’t enroll in time then you may be penalized.

Part C: Medicare Advantage plans

Part C, also known as Medicare Advantage, is an alternative to traditional Medicare. These plans are offered by private insurance companies and must cover all the services covered by Parts A and B, as well as some additional benefits. Part C plans may also include prescription drug coverage. People who enroll in a Medicare Advantage plan generally pay a premium for this coverage in addition to their Part B premium.

Part D: Prescription drug coverage

Part D is optional coverage that provides coverage for prescription drugs. It is offered by private insurance companies and can be added to traditional Medicare or a Medicare Advantage plan. People who enroll in a Medicare Part D plan generally pay a premium for this coverage in addition to their Part A and/or Part B premiums. If you don’t enroll on time then you may be penalized.

Understanding the different parts of Medicare and how they work together can help you make informed decisions about your healthcare coverage during retirement. Failing to understand these differences could result in gaps in coverage or unexpected costs.


A third mistake when planning for Medicare is not considering supplemental insurance. While Medicare provides coverage for many health concerns, it does have some limitations. For example, it does not cover long-term care or vision and dental services. In addition, there could still be deductibles, copays, and coinsurance to pay for. 

Supplemental insurance known as Medigap can help pick up costs that aren’t paid by Medicare. Medigap is offered by private insurance companies and requires an additional monthly premium.

Another option to consider is a Medicare Advantage plan, also known as Part C. Medicare Advantage plans are also offered by private insurance companies. These plans cover what Parts A, B, and usually D cover, plus they sometimes have some additional benefits such as dental or vision coverage. Medicare Advantage plans often have lower out-of-pocket costs than traditional Medicare for people with complex medical profiles. However, Medicare Advantage plans can have limited provider networks and may not cover all the same services as traditional Medicare.

As you approach retirement, it is essential to consider supplemental insurance options to make sure your healthcare needs are adequately covered. Without the correct coverage in place, you could find yourself facing unexpected medical bills or gaps in coverage that can be difficult and expensive to fill. 

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When planning for Medicare during retirement, it is important to understand the interaction between Medicare and employer-sponsored health insurance. If you are still employed after age 65 and have employer-provided coverage, you may be wondering if you need to also enroll in Medicare. The answer depends on the size of your employer's business and the type of coverage they provide.

If you are working for a large employer (20 or more employees) and have employer-sponsored health insurance, you may not need to enroll in Medicare when you turn 65. In this case, your employer coverage will generally be considered your primary coverage. If you do sign-up, Medicare will be your secondary coverage. However, it's important to understand that your employer coverage may not cover all the same services as Medicare, so you may still want to consider enrolling in Medicare to supplement your employer coverage.

If you are working for a small employer (less than 20 employees), are self-employed, or work but aren’t covered under insurance, you will generally need to enroll in Medicare when you turn 65. In this case, Medicare will be your primary coverage and any employer coverage will be your secondary coverage.

It's important to carefully consider your options and understand the rules for Medicare and employer coverage in order to determine the best coverage for your situation. 


Another mistake people make is not understanding what healthcare costs can actually be even while on Medicare.

There are various costs associated with Medicare coverage:

Premiums: This is the monthly amount you are charged for Medicare. Part B and D require a premium. The amount of the premium can change each year. It is possible you may have to pay a higher premium due to IRMAA, which stands for Income-Related Monthly Adjusted Amount.

Deductibles: This is the out-of-pocket costs you must pay before your Medicare coverage kicks in. For example, if you have a deductible of $1,000, you will have to pay the first $1,000 of your medical bills out of pocket before your Medicare coverage begins to pay.

Copayments and coinsurance: These are the out-of-pocket costs you pay when you receive medical services. For example, you may have a copayment of $20 when you visit the doctor or a coinsurance of 20% when you have a hospital stay.

Out-of-pocket maximum: The out-of-pocket maximum is the maximum amount of money that you are required to pay for approved medical expenses during a calendar year. This only applies to Medicare Advantage and Medigap policies.

Medicare supplement plan costs: You should also consider your Medicare supplement plan costs. Medicare supplement plans, also known as Medigap plans, are private insurance plans that help cover some of the out-of-pocket costs not covered by Original Medicare (Part A and Part B). These costs can include deductibles, copayments, and coinsurance. Medigap plans are sold by private insurance companies and are available to people who are enrolled in Medicare Part A and Part B.

 There are 10 standardized Medigap plans available in most states, each with a different set of benefits. The cost of a Medigap plan will depend on a variety of factors, including the specific plan you choose, your age, your location, and the insurance company you buy the plan from.

 Medigap plans have monthly premiums in addition to the premiums you pay for Medicare Part B. The premium for a Medigap plan can vary depending on the plan and the insurance company. The premiums often increase over time. Some Medigap plans also have deductibles, copayments, and coinsurance that you may have to pay out of pocket.

It's important to compare different Medigap plans to find the one that best meets your needs and budget. The plan that makes the most sense one year could be different the next.

Mistake #6: Not reviewing and updating your Medicare coverage regularly

Another mistake that is often made is never reviewing new plans after you make your initial choice in coverage. Regularly reviewing and updating your Medicare coverage is essential to ensure that it continues to meet your changing healthcare needs and provides the best value for your money.

Medicare plans can change from year to year, affecting the services, medications, and costs covered. By neglecting to review your coverage, you may miss out on new benefits, face unexpected out-of-pocket expenses, or fail to optimize your costs. Additionally, your healthcare needs and financial circumstances may evolve over time, making it crucial to assess whether your current plan aligns with your requirements. Taking advantage of the annual open enrollment period allows you to make informed decisions and explore alternative plans that better suit your needs.

Consulting Medicare resources or licensed insurance agents can provide valuable guidance during this process. Regularly reviewing and updating your Medicare coverage helps ensure that you have the most suitable and cost-effective healthcare coverage available to you.

Here are a few reasons why you should review your Medicare coverage regularly:

Your healthcare needs may change: As you get older, you may develop new health conditions and begin new medications. 

New coverage options may become available: Medicare coverage and plans change regularly. It is important to see if there is a new plan that could make more sense for your health care situation.

To review and update your Medicare coverage, you should:

Compare your current coverage to the available options: Look at the different types of coverage offered by other Medicare plans and compare them to what you have.

Consider enrolling in a Medicare Advantage plan: Medicare Advantage plans, also known as Part C, are private insurance plans that cover more than traditional Medicare.  However, these plans usually have larger monthly premiums as well.

Review your Part D prescription drug plan: Your prescription needs and what your Part D plan will cover can change from year to year You should check to see if the plan you are enrolled in is makes the most sense for your specific medications and situation.  

Review your Medicare Supplement (Medigap) policy: Make sure your Medicare Supplement (Medigap) policy provides the coverage you need.

If changes do need made, you will need to wait for an enrollment period to make the switch. 


Health care is one of the largest expenses a retiree faces. It is important to research your options carefully before deciding on a plan. By avoiding mistakes and taking the time to educate yourself about your Medicare options, you can ensure that you have the coverage you need at the best cost.

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