Medicare is government-administered healthcare for seniors age 65 and older, and certain adults with disabilities. An estimated 44 million Americans are on Medicare today, and that’s expected to rise to 79 million by year 2030.
Medicare is a great program that provides seamless healthcare to our most vulnerable population: the elderly and disabled. But like all government programs, Medicare is a labyrinth bureaucracy with many different rules and guidelines. And like all government programs, myths and misunderstandings abound.
Here’s the truth about the top Medicare myths:
Myth #1: Medicare is free
Seniors are often surprised when they find out Medicare is far from free. This is a misunderstanding that stems from the different parts of Medicare. In short, Medicare Part A covers inpatient expenses such as hospital stays, and Part B covers outpatient expenses, such as procedures and medical equipment. Part A Medicare has no premium as long as you’ve worked approximately ten years in your lifetime. However, Part B has a premium that every Medicare member must pay. In 2018, the standard premium is $134. Some lower income seniors may pay slightly less, while affluent seniors will pay significantly more, up to $428.60. Because most seniors pay their Medicare Part B premiums through their Social Security benefits, they may not realize they’re actually paying for Medicare coverage.
Medicare Part D is optional prescription drug coverage through Medicare, but it’s a good idea for seniors to take out a Part D policy. Part D plans have a low monthly premium as well.
Premiums are not the only health expenses Medicare beneficiaries face. Both Part A and Part B have deductibles—a set amount of money you must pay before Medicare starts to pay. In addition, each service in Part B, and some Part A expenses, have a co-payment that you pay after Medicare pays their share. And Medicare has no out-of-pocket maximum like most private insurance plans do, so you’re always on the hook for cost sharing.
Myth #2: Medicare is going bankrupt
Many people, particularly Generation X and millenials, believe Medicare is going bankrupt and won’t be there for them when they reach retirement age. This is false; Medicare is doing okay. The Social Security Administration and Medicare Board of Trustees recently threw the media into a frenzy when they reported that Medicare Part A’s trust fund will burn through its spare cash by 2026. Should this happen, Medicare Part A will become a budget-neutral program. “Budget-neutral” means the payroll tax that funds Medicare will continue to do so, but there are no reserves to fall back on. Hospitals and doctors may take reduced Medicare payments at that time, resulting in some providers possibly dropping their Medicare patients.
While Congress still needs to take care of Medicare’s dwindling trust fund, it does not mean that Medicare is going broke. It will still be around to offer medical coverage to your children, grandchildren, and great-grandchildren.
Myth #3: Medicare covers assisted living, home care, and long-term care.
Many seniors assume Medicare will pay for their golden years in a retirement home. This couldn’t be farther from the truth, especially when it comes to custodial care. Custodial care refers to any long-term care that doesn’t require skilled nursing care. Put simply, long-term custodial care is just too expensive for Medicare, an essentially affordable insurance program. Medicare covers 100 days of skilled nursing and rehab care after a three-day hospital stay. It will also cover some home health services, as well as hospice care.
Medicare does not cover assisted living facilities at all; it has the same status as a private home. Fortunately, many assisted living communities—chief among them Bridgeway Senior Living—can be a more affordable option than trying to maintain your own home.
Myth #4: Medicare covers all your health expenses
In addition to long-term care, another common myth is that Medicare covers all types of procedures and medical care. There are actually a number of services Medicare doesn’t offer. For example, it won’t cover standard dental, vision, or hearing care. You’ll have to pay for dentures, eyeglasses, and hearing aids out of your own pocket.
Myth #5: You can’t get Medicare if you’ve never worked.
As I mentioned above, Medicare Part A is free if you’ve worked around 10 years. The actual work requirement is 40 quarters in your lifetime. If you’ve never worked, you can still get Medicare through your spouses’s work record. There are conditions to this rule, as with everything Medicare. Your working spouse will need to be at least 62 years old, and you will need to be 65 or older.
Myth #6: You are automatically enrolled in Medicare at age 65.
Automatic Medicare enrollment at age 65 is true for some people. If you’re already getting your Social Security benefits when you turn 65, or if you’ve received disability benefits for at least 24 months, your Medicare Part A and B benefits will start on the first day of the month you turn 65.
Everyone else needs to sign up for Medicare. You can do this online at the Social Security Administration’s website. Make sure to sign up during your initial enrollment period—the seven-month time frame beginning three months before the month in which you turn 65—in order to avoid costly penalties. Plus, if you miss your initial enrollment period, you’ll have to wait until the next open enrollment, which runs between October 15th and December 7th every year.
Remember, Medicare won’t necessarily inform you when it’s time to enroll. As mentioned, if you’re already on Social Security by your 65th birthday, you’ll be enrolled automatically. If you’re not receiving Social Security benefits, keep track of your birthday and don’t miss your initial enrollment period.
I hope this has shed some light on all the confusing information swirling around Medicare. What myths did you believe about Medicare until you learned the truth?