Since it’s Medicare open enrollment season, you’re likely to see lots of TV ads for private insurers’ Medicare Advantage plans and mailers to enroll in them and Medicare Part D prescription drug plans. So you might be thinking , that people 65 and older will be especially sharp about all things Medicare.
In fact, several recent studies show that most Medicare beneficiaries are quite confused about Medicare coverage and costs.
For example, in a MedicareAdvantage.com survey of 2,013 people ages 65 to 99, 65 percent of Medicare beneficiaries said the government’s health insurance program was confusing and difficult to understand. This is the third year the site has conducted such a survey, and confusion about Medicare abounds each time.
Medicare confusion: ‘surprising and alarming’
“This is both surprising and disturbing,” says Christian Worstell, who conducted the recent study. “I write about Medicare as my full-time job, and I agree it’s confusing. Imagine how confusing it is for someone who doesn’t read about it, research it, and write about it every day.”
In a Retirement Living survey of 351 beneficiaries of private insurer Medicare Advantage plans (the alternative to Original Medicare), only 44% said they fully understood their plan. One in eight had misinterpreted aspects of their plan after enrolment.
But Worstell says, “Knowledge is power when it comes to making the most of your benefits and enrolling in the right coverage that fits your needs.”
When Medicare beneficiaries or people who are about to enroll in Medicare don’t understand how it works, they can find themselves paying more for their health care than they need to and missing out on coverage they should be able to afford .
In fact, the Retirement Living survey found that 51 percent of Medicare Advantage beneficiaries said confusion led to unexpected bills for non-covered services, and 46 percent said they had higher-than-expected out-of-pocket costs.
Ari Parker, co-founder of the Medicare Advisory Service, is also surprised by how little older Americans know about Medicare.
“If they know where to go to find information, it’s not that complicated,” he says.
Medicarethere are a lot of moving parts
Others may disagree that Medicare is not that complicated. Consider:
The original Medicare law and subsequent regulations are massive. According to Parker’s own book, It’s not that complicated: Medicare’s three solutions to protect your health and money, the 1965 law creating Medicare was over 1,400 pages long, and tens of thousands of pages of rules and regulations have been added since then. Parker wrote that when President Lyndon Johnson tried to explain his new Medicare program to reporters, he messed it up so much that the White House press secretary had to have the media retract his description.
Medicare is like a train running on two tracks. One is Original Medicare, which includes Part A (hospital insurance) and Part B (doctor visits, home health care, medical equipment, and preventive services). The other is Medicare Advantage (Part C), which includes coverage that Original Medicare does not have with a limited network of doctors and hospitals. There will be 3,959 Medicare Advantage plans nationwide in 2024; the average Medicare beneficiary will have access to 43, according to the health policy research and news organization, KFF.
You need to understand all parts of Medicare—A, B, C, and D. To get Part C or Part D, you need to shop around among health insurance companies and compare costs and benefits. There will be 709 stand-alone prescription drug plans for people with Original Medicare in 2024; the average beneficiary will have a choice of nearly 60, KFF says.
Then there’s another insurance policy you can buy to pay for what Parts A and B don’t do. This is a Medicare or Medigap supplement policy and you should also shop around if you want.
In addition, Medicare has five enrollment periods: Open Enrollment from October 15 to December 7; Initial enrollment (three months before you turn 65 to three months after your birthday); the eight-month-old Special Enrollment after you lose health insurance from your employer or spouse and both periods from January 1 to March 31—Total Enrollment, if you did not sign up for Medicare Part B at the time of initial enrollment and are not eligible for special enrollment, and Enrollment in Medicare Advantageif you are in a Medicare Advantage plan and want to switch to another plan or drop it and enroll in Original Medicare.
As Worstell says, “There are a lot of moving parts; ifs, ands, and buts. There are many conditions and exceptions. “Does Medicare cover this? Well, yes, but only if the following 11 things are true.
Worstell notes that health insurance itself can be confusing, and the Medicare overlay only adds to the public’s insurance literacy problems.
What people don’t know about Medicare
So what are people eligible for or on Medicare confused or wrong about? Here are six examples:
A full 49% of Medicare beneficiaries surveyed by MedicareAdvantage.com believe that Medicare does not charge a deductible (what you pay out of pocket before coverage begins) for hospital care. That does it.
The Part A deductible will be $1,632 and the Part B deductible will be $240. Part C deductibles vary by Medicare Advantage plan. “I think you definitely want to know before you go to the hospital that you’re going to be on the hook for $1,600,” says Worstell.
2. Doctor’s fees
When current beneficiaries or people about to enroll in Medicare don’t understand how it works, they can find themselves paying more for their health care than necessary. This is called a “surcharge” and can be up to an additional 15% of the doctor’s bill.
3. Mental health benefits
More than two-thirds (71%) of them do not know that Medicare covers inpatient and psychiatric treatment. “It’s troubling to think how many people may need mental health treatment and don’t seek it because they think it won’t be covered by Medicare and they don’t want to pay for it out of pocket,” says Worstell.
4. Assistive devices
Only 29% knew that Original Medicare usually covers walkers, rollators and wheelchairs. “I think most people don’t really associate equipment and devices with insurance,” says Worstell.
5. Plan Changes
In a survey of people over 65 by The Commonwealth Fund, 54% were unsure how difficult it would be to switch from Medicare Advantage to traditional Medicare and get a Medigap policy. Another 21% didn’t know it was even an option.
6. Out-of-pocket expenses
A 2023 KFF survey found that only 34% of people over 65 knew there was a federal law (The Inflation Reduction Act of 2022) that limits out-of-pocket prescription drug costs for people with Medicare .
Learning the ins and outs of Medicare can be overwhelming and “not fun,” says Worstall. “Nobody likes to sit down and sort through all these benefits and costs,” he adds.
Where to learn about Medicare
There are quite a few places you can navigate Medicare, although beneficiaries rarely use many of them, according to research by MedicareAdvantage.com.
Some of the best Medicare resources
Medicare.gov. This is the official government site that explains how Medicare works and how to enroll in or change plans. It also features the helpful Medicare Plan Finder tool, which allows you to find and compare Medicare Advantage plans, Part D drug plans, and Medigap policies.
1-800-MEDICARE (800-633-4227). This is Medicare’s toll-free number where you can talk to a person to get answers to questions. An article on Medicareadvantage.com about this says that the fastest way to get through the phone tree of this toll-free number to get help is to say “Coverage and Benefits” or press 5 on your phone’s keypad.
Government is free Medicare & You 2024 manual. You can read it online or have a copy mailed to you. This guide is written in plain English and has a useful index.
State SHIP programs. SHIPs (full name: State Health Insurance Assistance Programs) offer free, unbiased telephone help about Medicare from state government experts.
Medicare Brokers and Agents. They sell Medicare Advantage plans, Part D prescription drug plans, and Medigap policies and are paid by insurers.
Medicare books and websites. There are three useful books Medicare for you by Diane Omdal, Get what’s yours for Medicare by Philipp Moller and It’s not that complicated by Ari Parker. Websites worth checking out are those from Chapter, which has a free Medicare solutions worksheet you can download) and Hello Medicare; both sites sell Medicare policies.