Dispelling Original Medicare Myths

Even if you’re an expert in health insurance, there are probably some things that may surprise you about Medicare.  For everyone else, there are plenty of buzzwords and deadlines to learn before they become eligible as well as common misconceptions about the Medicare system that could be misleading or confusing when making a Medicare selection. Check out these Medicare myths and learn the truth!

Myth #1: Original Medicare and Medicaid are the same thing

Medicare is a distinctly different government program. When you turn 65 or have a qualifying disability or end-stage renal disease, you become eligible for Medicare, a federal health insurance program. Medicaid, on the other hand, focuses on providing health coverage and financial assistance for medical expenses to those who qualify based on need and income. Medicare is administered by the federal government.  Medicaid is jointly administered by the federal and state governments. Medicaid rules can vary by state.

Though these programs are separate, some people may be dually eligible for both.

Myth #2: All Medicare is completely free and covers everything

Though many people have been paying taxes toward Medicare their entire working lives, it won’t cover every single healthcare cost that a person could incur during their lifetime. While most people don’t pay a premium for Medicare Part A, Part B does require a monthly premium starting at $170.10 (2022), 20% coinsurance and $233 annual deductible (2022). In addition, both Medicare Part A and Part B have out-of-pocket expenses — and there’s no annual out-of-pocket limit for either.

Myth #3: If you enroll in Medicare Advantage, you don’t need to enroll in either part of Original Medicare

In order to enroll in a Medicare Advantage plan, you must first enroll in Medicare Part A and Part B. Most people don’t pay a premium for Part A, but even if you have a Medicare Advantage plan, you must continue to pay your Part B premium. If you wait too long to enroll in Part B and decide you want it later, you may have to pay a late enrollment penalty.

It’s important to remember that once you sign up for a Medicare Advantage plan, you will be receiving your Medicare benefits through your plan — not Medicare Part A or Part B. Each Medicare Advantage plan has its own rules, provider networks, cost-sharing structures, and benefits that you should familiarize yourself with before making a purchasing decision.

Myth #4: Medicare is only available to people 65 and older, and only to people born in the US

These aren’t completely true. Most enrollees in Medicare are 65 and older, however, Medicare is also available to people who have certain disabilities including ALS and End-Stage Renal Disease (permanent kidney failure).

Medicare is available to US citizens and permanent legal residents who have resided stateside for at least five years.

Myth #5: Medicare and SSDI overlap

Sort of but not really. Social security disability insurance covers people unable to work due to a medical condition anticipated to last at least one year or result in death. People using SSDI become eligible for Medicare once they’ve been on it for at least 24 months. One exception is ALS/Lou Gehrig’s disease. Medicare eligibility for ALS patients begins as soon as their SSDI benefits begin.

Myth #6: You can’t go to an out-of-network provider while on Original Medicare

Mostly untrue but partially true in some instances. Original Medicare doesn’t have provider networks — a beneficiary may see any provider who accepts Medicare. However, it’s advantageous to see a Medicare provider who “accepts assignment.” These providers agree to charge no more than the Medicare-approved amount for their services. Beneficiaries actually can receive medical care from “non-participating providers,” this means that they do accept Medicare patients but reserve the right to upcharge for healthcare services by up to 15%. Opt-out providers on the other hand, do not accept Medicare patients at all.

If you have a Medicare Advantage plan, it likely has provider networks. It’s important to understand what providers are in your plan’s network as well the rules and restrictions.

Myth #7: People with health problems can't receive coverage

A person cannot be rejected by Original Medicare or a Medicare Advantage for any pre-existing health conditions. Those eligible for Medicare with end-stage renal disease (ESRD) generally cannot enroll in a Medicare Advantage plan. However, they can sign up for Original Medicare or may be able to enroll in a Medicare Advantage Special Needs Plan designed for ESRD patients.

Myth #8: Original Medicare covers everything, I don’t need to consider any private plans

Not exactly. While Original Medicare does cover a wide range of hospital and medical services, there are some out-of-pocket costs that could add up that it doesn’t cover. These costs include deductibles, copays and coinsurance. Medicare Supplement Insurance, a form of private insurance also referred to as “Medigap,” was created to help pay for some of the out-of-pocket costs that exist within Original Medicare. These include deductibles, copayments, and coinsurance. You can find a full list of standardized Medigap benefits here.

If you aren’t interested in a Medicare Supplement plan, you can also consider a Medicare Advantage plan. These plans are a private alternative to Medicare Part A and Part B and may provide additional benefits that Original Medicare doesn’t cover. They also include an annual out-of-pocket limit. You cannot have a Medicare Supplement plan and a Medicare Advantage plan at the same time.

So, what surprised you and what did you already know?

In the world of Medicare, there is a lot of information to take in as you embark on making decisions about what options are best for you. If you find yourself asking questions, a licensed insurance agent can be a knowledgeable and reliable resource to assist you in getting the right answers or making selections that work for your life.