Turning 65 in the U.S. means finally being able to rely on Medicare covering most of your health expenses. But before you join the 67 million Americans enrolled in Medicare, it's important to understand what's covered and what's not.
Navigating the rules around Medicare can feel overwhelming -- especially when mistakes can end up costing you dearly. You could easily overlook important deadlines and end up with gaps in your coverage, higher out-of-pocket costs, or even miss out on advantageous tax breaks.
And when you're living on a fixed income, the last thing you want to do is leave money on the table. Here are five costly Medicare mistakes and how to avoid them.
Forgetting to enroll for Medicare coverage could mean you'll need to pay a penalty, limit your coverage options, or even have to wait until the next enrollment period.
If you're already receiving Social Security benefits for at least four months when you turn 65, you'll automatically be enrolled for Medicare Part A -- but you will need to sign up for Part B and other coverage yourself. Otherwise, you'll need to enroll for your plan during the initial enrollment period -- just like you did when you were shopping for health insurance on the Marketplace.
However, you should still have another chance during the general enrollment period to sign up. The late penalty could be as high as 10% of your monthly premium, depending on which plan you failed to sign up for.
Medicare does, however, also offer a special enrollment period if you're still covered under a qualifying employer health care plan or within eight months after the coverage ends.
Not looking over whether your current doctor and preferred providers are covered under the plan you choose could end up costing you thousands of dollars in out-of-pocket costs. The same goes with not understanding what medications are covered in your original Medicare and Part D plan.
Before signing up for a plan, ask to see the plan's current formulary, which is a list of the medications a plan covers. And be sure to confirm if your doctor and providers are covered under a potential plan.
Or, if you've already signed up for a plan, call ahead and confirm what's in the network, such as the surgeon and other specialists like radiologists.