10 Myths about Medicare

If you are turning 65 and live in California, then you’ve probably encountered many health organizations that claim they can provide you the best coverage. We wanted to provide you a resource that helps you maneuver the most common myths and misconceptions about Medicare.

The establishment of Medicare in 1965 by President Lyndon B. Johnson forever changed the face of healthcare for older Americans. Before Medicare was enacted, 56% of Americans over age 65 did not have health insurance, according to a national study conducted at the time. Those without health insurance faced financial hardship and even medical bankruptcy in case of major medical problems.

Like many before him, President Johnson believed that everyone deserved access to healthcare. Since it was established, Medicare has helped improve the health and longevity of millions of Americans.

Despite its 50-year existence, myths and misconceptions about Medicare persist, which we aim to dispel. Let’s take a look at 10 common myths about this important program.

Myth #1: People Can Enroll in Medicare Anytime

Most people become eligible for Medicare at age 65 and have a 7-month enrollment period to sign up for Part A and/or Part B. This initial enrollment period includes the three months preceding a person’s 65th birthday, their birthday month, and the three months following their 65th birthday. Unless a person is eligible for special enrollment, they must sign up during their initial 7-month eligibility period or wait until open enrollment, which happens each year from January 1- March 31.

Myth #2: Medicare Does Not Cover Prescription Drugs

Many of us have heard stories of elderly people struggling to pay for prescription drugs that aren’t covered by Medicare or who are forced to go without their prescriptions altogether because they simply can’t afford them. It’s true that Original Medicare (Parts A and B) covers only basic drug coverage (i.e. a limited number of outpatient prescription drugs under limited conditions). This is why Medicare Part D (prescription drug coverage) was established in 2003. Part D plans are offered through private insurance companies as standalone plans, or they can be purchased as part of a Medicare Advantage (Part C) plan. It’s important to make sure you choose a plan that covers all the prescription drugs you’re taking. Consult with a Medicare expert for help choosing the right plan.

Myth #3: Medicare Covers Assisted Living and Home (Custodial) Care

Medicare does not cover home care assistance for activities of daily living, such as dressing, bathing, eating, and housekeeping (referred to as custodial care), nor does it cover care in an assisted living facility. Medicare does cover some skilled nursing facility care, nursing home care, (as long as it’s not exclusively for custodial care) and some home health care services, including intermittent skilled nursing care, physical therapy, speech-language pathology services, continued occupational services, and other services, with varying conditions and restrictions.

Myth #4: Medicare and Medicaid Are the Same Thing

While the two have similar sounding names, Medicare and Medicaid are very different programs. Medicare provides health coverage for people age 65 and over as well those with end-stage renal disease (ESRD) and other conditions, while Medicaid provides health coverage for people with low incomes and few resources. Some people are eligible for both Medicare and Medicaid, but they must apply for each program separately.

Myth #5: Medicare Supplement (Medigap) Plans Cover Everything Original Medicare Covers

Medicare supplement (Medigap) plans are designed to help cover costs like copayments, deductibles, and coinsurance amounts that aren’t covered by Original Medicare (Parts A and B) or by a Medicare Advantage plan (Part C). There are a wide range of Medigap plans to choose from that vary in cost. Consult with an expert to explain all the different parts of Medicare and how they work.

Myth #6: You Can’t Get Medicare if You’ve Never Worked

Generally, a person needs 40 Social Security Administration (SSA) work credits (equivalent to around 10 years of work) in order to qualify for Medicare Part A (hospital) with no premium. This can present an issue for homemakers who have never worked. To remedy this, Medicare allows homemakers to obtain no-charge Medicare Part A based on the work record of their spouse, as long as the person is 65 or older and their spouse is at least 62. Otherwise, a person will pay $226 a month if they have 30-39 work credits or $411 a month if they have fewer than 30 work credits (2016). Once a person has earned 40 work credits they no longer need to pay a premium for Part A. Part B (medical) and Part D (prescription drug coverage) both have separate premiums and have nothing to do with how long you’ve worked.

Myth #7: The Affordable Care Act Made Drastic Cuts to Medicare

In fact, the opposite is true. The Affordable Care Act (ACA) prohibits cuts to Medicare benefits and aims to rein in the cost of provider payments, cut down on fraud and waste, and otherwise cut down on costs by ensuring seniors get preventive services in order to avoid chronic conditions like heart disease and high blood pressure, which are expensive to treat and reduce quality of life.

Myth #8: People Living Longer Will Bankrupt Medicare

This myth has persisted for decades as modern medicine has continued to increase life expectancy. Long term care in a nursing home, assisted living, or at home (custodial) tend to be the biggest expenses that people of advancing age incur, and none of these services are covered by Medicare. Medicare does cover hospital care, skilled nursing facility and/or nursing home care (as long as it’s not custodial), hospice care, and home health care services.

Myth #9: Medicare is Free Healthcare

Despite a common misconception, Medicare is not free. Several parts of Medicare have premiums. Here is a breakdown:

  • Medicare Part A– Has no premium for those who have at least 40 work credits and/or those who qualify based on their spouse’s work record.
  • Medicare Part B–The standard premium for Part B is $121.80 a month (2016). The standard premium may increase if your individual tax return is $85,000 and above. The standard premium may also increase if you’ve filed joint tax return of $107,000 and above.
  • Medicare Part C (Medicare Advantage plans)– These plans take the place of Original Medicare (Parts A and B) and may or may not have an additional premium.
  • Medicare Part D (prescription drug coverage)– These plans are purchased through private insurance carriers and vary in cost.
  • Medicare supplements (Medigap)– These plans have an additional monthly premium that varies in cost.

Myth #10: Medicare Costs the Same Amount for Everyone

The majority of people will pay no premium for Part A and Part B costs $121.80 a month (2016). Additionally, some people will pay a premium for Part A, based off of their work history, and Medicare Part C and Part D all have variable premiums. Based on the plans and supplements chosen, the amount a person pays for Medicare coverage can vary considerably from one person to the next.

Navigating the world of Medicare can be confusing. For more information or to receive a free quote, please contact us to understand all of your coverage options and find the combination of plans that is right for you.