Why Medicare Confuses Most Americans
Making sense of Medicare is no easy task. Financial journalist Kimberly Lankford has written a practical guide, Medicare 101, to help Americans make smarter coverage decisions. The book breaks down the full alphabet of plan options — from Part A (hospital care) to Part B (medical and preventive services), Part C (Medicare Advantage), Part D (prescription drugs), and Medicare Supplement (Medigap). Together, these choices create a maze. Lankford’s book helps readers navigate it with confidence.
Enrollment Mistakes That Cost You Money
The Biggest Pitfall: Not Knowing You Must Enroll
Many people assume Medicare enrollment is automatic. It is not. Unless you already receive Social Security benefits, you must actively sign up.
The enrollment window opens three months before your 65th birthday. It also includes your birthday month and closes three months after. Miss this seven-month window, and you face late enrollment penalties on Part B and Part D — penalties that follow you for life.
Workers Need to Take Extra Steps
Moreover, those who are still employed face additional decisions. If your employer has fewer than 20 workers, you must sign up for both Part A and Part B. Consequently, skipping this step leads to coverage gaps. On the other hand, employees at larger companies can often keep their employer coverage as the primary plan.
Many working Americans enroll in Part A only. Since Part A carries no premium, this approach saves money short-term. However, they delay Part B enrollment until they retire. If you missed your initial window but stayed covered under an active employer or spouse’s group health plan, you can still sign up later without penalty.
How Much Does Medicare Actually Cost?
The Myth That Medicare Is Free
One of the most common misconceptions is that Medicare costs nothing. In reality, Part B premiums currently run $202.90 per month. Furthermore, not everyone pays the same rate.
High-Income Surcharges Explained
Higher earners pay more. Additionally, “income” here includes more than salary. Withdrawals from tax-deferred retirement accounts count toward the income calculation. Roth IRA conversions also factor in. Therefore, even retirees with modest wages can trigger the Income-Related Monthly Adjustment Amount (IRMAA) surcharge.
Specifically, single filers who earned more than $109,000 two years ago may owe the surcharge. Married couples filing jointly face it above $218,000.
HSA and Medicare: What to Know
Enrolling in Medicare Ends Your HSA Contributions
Once you enroll in Medicare, you can no longer contribute to a Health Savings Account (HSA). As a result, many workers who are still employed choose to delay Part A enrollment to preserve HSA eligibility. Nevertheless, you can still use your existing HSA balance tax-free for qualified medical costs. These include Medicare premiums, deductibles, copays, and coinsurance.
Contesting the IRMAA Surcharge
You Can Appeal — But You Must Act
If your income drops due to a major life event, you can contest the IRMAA surcharge by filing Form SSA-44 with the Social Security Administration. Qualifying events include retirement, reduced paid work hours, marriage, divorce, a spouse’s death, loss of income-producing property, or loss of a pension.
Importantly, no one will file this appeal on your behalf. You must initiate the process and provide supporting documentation.
Long-Term Care: Medicare’s Biggest Gap
What Medicare Does Not Cover
Many retirees are surprised to learn that neither Medicare nor Medicare Advantage covers long-term custodial care. Medicare does cover short-term skilled nursing after a hospital stay. However, ongoing assistance with daily living activities — bathing, dressing, eating — falls outside Medicare’s scope entirely. This gap represents one of the largest unplanned healthcare costs in retirement. Consequently, early planning for long-term care is essential.
International Travel and Medicare Coverage
Traveling Abroad? Plan Ahead
Standard Medicare does not cover healthcare outside the United States. Fortunately, most Medigap plans include some foreign travel emergency coverage. Some Medicare Advantage plans offer limited international benefits as well.
For frequent international travelers, a travel insurance policy covering medical evacuation is strongly recommended. Additionally, Americans living abroad should understand that Medicare will not cover their day-to-day healthcare needs overseas.
Choosing the Right Part D Plan
The $2,100 Out-of-Pocket Cap
Good news for prescription drug users: Part D now caps annual out-of-pocket costs at $2,100. This cap applies only to drugs listed on your specific plan’s formulary. Each plan maintains its own drug list, and these lists change annually.
Use the Medicare Plan Finder Tool
During open enrollment — October 15 through December 7 each year — visit Medicare.gov’s Plan Finder tool. Enter your zip code, medications, and dosages. The tool then shows exactly what each available plan charges for your specific drugs. This comparison step can save hundreds of dollars annually.
Moving States with Medicare Coverage
Original Medicare Makes Relocation Easy
Original Medicare works nationwide. Doctors and hospitals that accept Medicare are accessible across all 50 states. Therefore, relocating with original Medicare causes minimal disruption.
Medigap and Medicare Advantage Require Action
However, Medigap policyholders should notify their plan provider after moving. Meanwhile, Medicare Advantage members often need to select a brand new plan in their new state. Before choosing, research which local doctors and hospitals participate in plans available in your new area. State Health Insurance Assistance Program (SHIP) counselors provide free one-on-one guidance in every state.
Why You Should Learn Medicare Early
Medicare Knowledge Matters Before Age 65
Finally, Medicare education does not begin at 65. Millions of Americans in their 50s already help aging parents navigate Medicare decisions. Understanding the basics early reduces stress and costly mistakes later. For instance, Lankford herself now uses Medicare’s Plan Finder tool each fall to evaluate her parents’ Part D coverage. Starting this education process early gives families a clear advantage.
