More than 55 million older and disabled people depend on Medicare for their health needs. Many if not most of them will tell you, if asked, that Medicare should be an easy and affordable program but that it often is not. In doing the reporting for my new book, "Get What's Yours for Medicare: Maximize Your Coverage, Minimize Your Costs," I kept coming across recurring Medicare problems.
First up is the fact that even signing up for Medicare at the right time can be very complicated. It used to be that most people retired at age 65 and began both Medicare and Social Security when they did. But this no longer is the case. Roughly a third of people in their late 60s are still in the work force. And Social Security's full retirement age long ago moved from 65 to 66, and already is scheduled to move to 67 beginning in several years.
As it turns out, people do not need to sign up for Medicare when they turn 65 so long as they are enrolled in an active employer group health insurance plan, either because they're still working or their spouse is. In one of the many asterisks that dot the Medicare landscape, this is NOT true for workplaces having fewer than 20 employees. These small group plans automatically become what's called the secondary payer of health claims when a person turns 65, meaning that Medicare becomes the primary payer of claims, and is thus required.
So, if you mistakenly sign up for Medicare when you don't need it, you can be out thousands of dollars a year in unnecessary premiums.
On the flip side, if it turns out that you do need Medicare and you fail to sign up for it on a timely basis, you can wind up paying late-enrollment penalties for Part B of Medicare, which covers doctors and other outpatient expenses, and also Part D of Medicare, which covers prescription drugs.
These penalties can add considerable dollars to your premiums and, what's worse, they literally never go away! You will be on the hook for them for the rest of your life. What's worse, such a late enrollment might even leave you with no Medicare and thus no primary health insurance for many months.
In their desire to be fair and comprehensive, Medicare regulators have created multiple enrollment periods. Of course, they are different! Understanding these differences can be crucial to obtaining insurance coverage at the right time and avoiding lifetime penalties.