The Medicare Mistakes Costing You Thousands (How to Avoid Overpaying)

The Most Common Medicare Overpayment Mistakes

1. Sticking with an Overpriced Medicare Supplement Plan

Medicare Supplement (Medigap) plans offer standardized benefits, but different insurance carriers charge different prices for the exact same coverage. For example, Company A might offer Plan G for $200 per month, while Company B offers the same Plan G for only $150 per month. The benefits are identical, but the cost difference is significant.

Many people overpay for their Medigap plans simply because they don’t compare rates regularly. The good news? You can switch to a lower-cost provider and lock in savings. If you’re unsure how to compare plans, reach out to us for assistance.

2. Choosing the Wrong Medicare Advantage Plan

Not all Medicare Advantage plans are created equal. Some plans may not cover your specific medications, while others come with high out-of-pocket costs. If you’re on an Advantage plan that doesn’t suit your healthcare needs, you could be overpaying unnecessarily.

Every year, new Medicare Advantage plans become available, and existing plans change. That’s why reviewing your plan annually is essential to ensure you have the best coverage for your situation. If you need help evaluating your options, give us a call.

3. Enrolling in the Wrong Part D Prescription Drug Plan

Medicare beneficiaries often make the mistake of not reviewing their Part D prescription drug plan during the Annual Enrollment Period. If you don’t compare your options each year, you could wake up in January with a premium that has increased by $100 or more.

Part D plans change yearly—formularies, premiums, and coverage details can shift. The best way to ensure you’re not overpaying is to shop for a plan that covers your specific medications at the lowest possible cost.

4. Ignoring Medicare Savings Programs

Medicare offers savings programs designed to help lower-income beneficiaries reduce their healthcare costs. These programs can assist with:

• Part D prescription co-payments
• Part B premiums
• Other out-of-pocket costs

Unfortunately, many eligible individuals don’t take advantage of these programs simply because they’re unaware they exist. If you think you might qualify, check out the Medicare Savings Program and see how much you could save.

5. Paying Higher Part B and Part D Premiums Due to IRMAA

The Income-Related Monthly Adjustment Amount (IRMAA) is an additional charge that increases Medicare Part B and Part D premiums for higher-income earners. The government reviews your income from two years prior to determine if you must pay IRMAA.

If you recently sold an asset, received a large financial windfall, or had a temporary increase in income, you might be subject to IRMAA. However, there are ways to reduce your Medicare costs by working with a tax professional and employing strategies such as:

• Delaying Social Security benefits
• Tax-loss harvesting
• Spreading out income from asset sales over multiple years

6. Failing to Shop for a Better Medicare Plan Annually

Many Medicare beneficiaries stick with the same plan for years without reviewing their options. However, Medicare plans change annually, and what worked last year might not be the best choice this year.

• Medicare Supplement (Medigap) Plans: You can shop for a lower premium anytime, subject to health underwriting unless you live in a state with special rules.
• Medicare Advantage Plans: You can switch plans during the Annual Enrollment Period (October 15 – December 7) or the Medicare Advantage Open Enrollment Period (January 1 – March 31).
• Part D Drug Plans: These can only be changed during the Annual Enrollment Period (October 15 – December 7).

Real-Life Examples of Medicare Savings

At our agency, we recently helped a client who was paying $400 per month for a Plan F. After reviewing their options, we switched them to a Plan G at just $150 per month—saving them $250 per month!

Another client didn’t realize they were eligible for the Medicare Savings Program. After applying, they qualified for assistance, reducing their monthly Medicare costs significantly.

How to Reduce Your Medicare Costs

If you want to lower your Medicare expenses, here’s what you need to do:

1. Shop Your Medicare Plan Every Year
   • Compare Medicare Supplement and Medicare Advantage plans to find the best deal.
   • Review Part D plans annually to ensure your prescriptions are covered at the lowest cost.
2. Work With a Tax Professional
   • Plan your income strategically to avoid IRMAA charges.
   • Consider tax-saving strategies like delaying Social Security or spreading out large financial transactions.
3. Check for Medicare Savings Programs
   • If you’re on a limited income, explore government programs that can help reduce your out-of-pocket costs.
4. Get Professional Medicare Assistance
   • Medicare can be confusing, but you don’t have to navigate it alone. Our team can help you find the best coverage at the lowest cost.

Final Thoughts

Overpaying for Medicare coverage is an expensive mistake—but it’s one you can avoid. By shopping your plan annually, exploring Medicare Savings Programs, and implementing smart tax strategies, you can keep more money in your pocket.

If you’d like free, personalized Medicare guidance, give us a call at 800-208-4974 or book an appointment with us. We’ll help you compare plans, reduce costs, and ensure you have the best coverage for your needs.

Don’t forget to download our free Medicare 101 Guide for more tips on saving money and avoiding costly mistakes!

Stay informed, save money, and make the most of your Medicare coverage. Thanks for reading, and we’ll see you in the next post!