The 5 biggest myths about Medicare

The 5 biggest myths about Medicare

Medicare is used by nearly 60 million Americans, but there’s still a lot of confusion about how the program works. Commonly repeated myths and misconceptions can lead to costly mistakes for older adults. To help your older adult get their essential health benefits, we share the truth behind 5 common myths about Medicare.

Myth 1. Medicare is completely free

Fact: Even though Medicare is paid for by a tax-funded trust fund, people who have Medicare insurance coverage still have to pay monthly premiums and co-pays for services and prescription drugs. Many people can qualify for free Part A premiums if they meet certain conditions. Others with low income may be eligible for the Qualified Medicare Beneficiary (QMB) program, which pays for Part A and B premiums. Most people have to pay a Part B monthly premium, except for those in the QMB program.

Aside from the monthly premiums, seniors usually have to pay a co-pay, co-insurance, or deductible.
File Individual Tax Return File joint tax return File married & separate tax return You pay each month (in 2019)
1$85,000 or less
$170,000 or less
$85,000 or less
$135.50
above $85,000 up to $107,000
above $170,000 up to $214,000
Not applicable
$189.60
above $107,000 up to $133,500
above $214,000 up to $267,000
Not applicable
$189.60
above $133,500 up to $160,000
above $267,000 up to $320,000
Not applicable
$352.20
above $160,000 and less than $500,000
above $320,000 and less than $750,000
above $85,000 and less than $415,000
$433.40
$500,000 or above
$750,000 and above
$415,000 and above
$460.50

Myth 2. Medicare covers 100% of your healthcare costs

Fact: Medicare Part A and B cover most hospital and medical expenses. Medicare Part C and D cover expenses and services not covered by Part A and B, like prescription drugs and other hospital fees.

But even with all those different parts, older adults still have to pay any doctor or facility fees that are not covered

Myth 3. A Medicare Advantage plan or Part D coverage will fill gaps in my coverage.

Fact: Medicare can be complicated. Medicare Advantage plans – sometimes known as Part C – offer optional coverage through private insurance companies. Many of these plans cover dental, vision, hearing and prescription drug costs not covered by Original Medicare. However, the plans may have limited networks to keep costs down.

Part D is optional prescription drug coverage that has myriad variables, such as premiums, copays, coverage gaps and coinsurance. You can choose which prescription drug plan best fits your needs.

Myth 4. Medicare may not cover me.

Fact: One major advantage of Medicare is that you can’t be rejected for coverage or be charged higher premiums because you’re too sick. However, if you’re a high earner, you’ll pay higher premiums for Medicare Part B and Part D. In addition, the Affordable Care Act now prohibits discrimination based on a pre-existing condition.

Myth 5. I will be notified when it’s time to sign up for Medicare.

Fact: No. Unless you are already receiving Social Security benefits, you must apply for Medicare. You will not receive any official notification on when or how to enroll.

​If you’re over 65, still working and covered by employer healthcare, you may want to delay enrollment in part B to avoid paying for coverage you don’t need. Once you stop working, you must enroll within eight months – even if you’re receiving COBRA or retiree health benefits from your employer – to avoid permanent late penalties. For example, if you miss the deadline, you’ll pay 10% more in Part B premiums for every 12 months you delay. If you are under 65 and retired, you should enroll before your 65th birthday to avoid these penalties.

For those without employer coverage, it’s a good idea to sign up when you’re first eligible for Part B. If you’re eligible for Part B when you turn 65, for example, you’ll want to enroll during your initial enrollment period, the seven-month period that starts three months before your birth month. If you sign up in the first three months, you can avoid delays in coverage. If you sign up during your birth month or later, your start date will be delayed by one to two months.

​There’s also a Medicare Open Enrollment period from October 15 to December 7 each year for Medicare Advantage or Medicare prescription drug coverage. During this time, you can:

  • ​Switch from Original Medicare to Medicare Advantage, or vice versa
  • Switch from one Medicare Advantage plan to another
  • Enroll in a Part D Prescription Drug Plan for the first time
  • Switch from one Part D plan to another
  • Drop your Part D coverage (you won’t be able to re-enroll until the next open enrollment period, and a late enrollment penalty may apply)

​​Medicare.gov recommends that you review your current coverage each fall to see if you need to make changes for the following year.