Top 6 Medicare Myths That Could Hurt Your Retirement Plan

The story of James Verone, the man who robbed a bank for access to Medicare:

The morning of June 9th, 2011 began like any other day for James Vernone.  He followed a typical routine not unlike your own. 

He showered, he shaved, he grabbed a cup of coffee while dressing and then he hailed a cab.  After that he robbed a bank.

Wait- what?  Yes, he executed a well thought- out plan but you may be surprised by his motive.  He wasn’t looking for cash—instead he wanted access to a good medical plan.

After losing his job at Coca Cola and draining his bank account, he knew he needed to find a place to live, food and access to medical care. 

At RBD he handed the teller a note demanding one dollar and said he would sit and wait for the police.  He said he didn’t want to scare anyone and he also knew the amount he asked for wouldn’t constitute grand larceny, so he wouldn’t get a long sentence.

He was 59 and just needed to get to 65 to be eligible for Medicare.

Photo from: https://nowiknow.com/the-1-health-care-plan/

Dispelling Medicare myths:

This story sheds light on just one of the many flaws with our healthcare system.  Coverage is undeniably expensive and a clear solution is still beyond our grasp.

Even if you get to the magic age of 65 to access Medicare there is much confusion around what it is and what is covered.  The following are a few of the many myths:

Myth #1 - Medicare covers all of your health expenses in retirement

Plain and simple—it doesn’t.  Parts A and B cover a lot but not all.  There are still deductibles and coinsurance payments. 

Additionally, it does not cover long-term care, dental care, eye exams for glasses, dentures or hearing aids.

Myth #2 - Medicare Enrollment is automatic

Half true

If you are already receiving social security benefits when you turn 65, have gotten disability benefits for at least 2 months or have ALS you automatically get {art A and B on the first day of the month you turn 65. 

If not, you must apply online during your initial enrollment period which is a 7-month time frame beginning 3 months before the month you turn 65.

Myth #3 - Medicare is free

Part A is free if you earned 40 SS credits during your working career. Part B is $135.50 per month adjusted annually.

Myth #4 - Everyone pays the same

High income beneficiaries must pay a higher premium—as high as $428/mo.

Myth #5 - I can cover my spouse and family as long as I am 65

Wrong!

Myth #6 - I can continue saving in my HSA

Wrong again—you can keep your HSA growing tax free and use it to cover expenses, but you can’t continue to add to it.  The year you turn 65 you can prorate the amount you contribute.

How to avoid the pitfalls of Medicare:

Don’t believe everything you read on the internet

The internet is an excellent educational resource that can teach you the basics about what Medicare is, help you understand the differences between its various parts and provide you with information on its benefits, however it should not be used to make financial decisions that will impact your life for years to come.

Treat the information that you find on the internet as an educational resource but make sure that you consult a knowledgeable professional before attempting to navigate the Medicare gauntlet.

Your situation in life determines how you should approach Medicare coverage and only a knowledgeable professional knows the ins and outs of the program well enough to ensure that you don’t make a mistake that could negatively affect your money, or more importantly, your health.

This does not mean that you need to shell out a ton of money to get actionable advice. Start by reaching out within your own network. You may be surprised to find out that your friends and family members have experience in fields that can help you better understand your coverage needs.

Examples of these professionals can be doctors, insurance agents or lawyers. A second option, one that we highly recommend, is scheduling a consultation with a financial advisor that has a track record of creating Medicare plans for clients.

A proper consultation comes at no cost and provides you with the opportunity to ask the questions that you need definitive answers to in a face to face conversation. A good advisor will be able to provide clear answers as well as give you insights into what you can do to avoid Medicare mistakes before you even see them coming.

Consult the official Medicare website

When researching Medicare online, be sure to verify any and all information that you find by fact checking it using the official Medicare website.

As legislation changes so does Medicare coverage. Many websites are unable to keep up with these changes, meaning that taking the advice of the website without verifying it at the source could potentially negatively impact you. This is a simple step that will go a long way to ensure that your Medicare strategy works as it should in retirement.

When in doubt, speak to a professional

As with most government programs, rules get complicated. Official documentation that provides the most accurate information often reads like something out of a law book because it was essentially created by lawyers.

Would you walk into court to defend yourself after reading a few pieces of law literature? That is essentially what you are doing when you make Medicare decisions without consulting a professional that is trained and certified to interpret its coverage and apply it to your unique situation.

This is where working with a professional can help guide you. Our financial advisors can help answer your questions and also help you shop for a Medicare supplement plan that best fits your needs.  Best of all ---it doesn’t cost you a penny. How often does that happen—quality assistance at no cost.  It’s so much better than robbing a bank!

Want to learn more? Contact us! 

We are here to help you build a better financial future, which includes answering your questions about Medicare. Don’t be shy, we’ve got your back!

Written by Lori Johndrow

Lori is a 35-year veteran in the financial services industry. She is both a Retirement Income Certified Professional ® and Accredited Investment Fiduciary ®. Both areas lend themselves to helping her aid people in creating lasting wealth.