There are what feels like thousands of options when enrolling or changing coverage under Medicare, but it doesn’t have to be that overwhelming – at least that’s what one author says.
Getting the proper coverage is “just a series of decisions,” said Ari Parker, co-founder and lead adviser at Chapter, a company that specializes in maximizing Medicare coverage. Parker recently wrote a book, called “It’s Not That Complicated: The Three Medicare Decisions to Protect Your Health & Money” (published by Chapter), which lays out the ways to strategize coverage.
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Those decisions, which affect around hospital insurance, medical insurance and drug coverage, may be made at various stages of life – such as upon one’s 65th birthday, or thereafter if beneficiaries feel they don’t have the proper health insurance later in life. The wrong choices can cost patients thousands of dollars more every year, or keep them away from their preferred doctors and medical institutions. Parker also dives into reviewing coverage and reconfirming it every year during the annual enrollment period.
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There are independent and licensed advisers, such as the ones who work at Chapter, who can help beneficiaries make sense of the options available to them. There are also other resources as well, such as Medicare.gov, State Health Insurance Assistance Programs and the National Council on Aging’s BenefitsCheckUp.
Parker spoke with MarketWatch about making the right decisions for Medicare, the consequences of not analyzing your options and the upcoming annual enrollment period beginning on Oct. 15. This interview has been edited for clarity and length.
MarketWatch: What is the greatest myth or misconception about Medicare?
Ari Parker: There are so many, let me go through a few. The first is that Medicare is free. There’s a charge. It is not free and the charge is $170.10 (per month) for most Americans. [Editor’s note: The monthly fee is the premium for Medicare Part B, which covers medical services.] The second assumption is it covers all of your medical costs – it only covers 80%. The third misconception is that Medicare covers drug coverage. That is optional. If you don’t have it, there’s a penalty, so get prescription drug coverage or a standalone Part D plan.
MW: I know you said it’s not that complicated but there are a lot of factors to consider with Medicare – how do people make sense of it all?
Parker: Start with the 3 P’s: providers, prescriptions and preferences. Who are the doctors you’ve seen over the last few years, and who are the doctors you want to see? What’s your health history – do you have chronic conditions? Someone who doesn’t use much care may want to look into Medigap, but Medigap wouldn’t work so well if you see four to six specialists. Another is what prescriptions are you already on and what do you think you’ll need in the near future? It also matters what pharmacy people go to, which affects pricing. And finally, lifestyle preferences – what are your plans to enjoy what we call the remarkable next act? (This is another word for retirement.) Will you spend half the year in Florida and Arizona? Do you plan to visit grandchildren or travel internationally?
Also see: Are you eligible for Medicare? What to know about open enrollment
MW: What are the consequences if you’re not going through the options?
Parker: Medicare is not automatic unless you’re already taking Social Security, so the biggest risk is not having health insurance. The second is owing late enrollment penalties. These lifetime penalties are cumulative – they keep adding up and you owe them for as long as you live. The final risk is having lousy insurance. If you started Medicare and didn’t go through the three P’s, the big risk is when you need care it won’t work as you want it to.