For whatever reason, many people do not understand Medicare. Of those who think they do, a large number have been fooled into believing myths. With so many Medicare myths circulating, it is often times difficult to differentiate between what is right and what is wrong.
Below are several Medicare myths that you need to be aware of:
You can only get out what you put in. Believe it or not, many believe that there is an account somewhere with all the money that they paid into Medicare, from their paychecks, over the years. Medicare is based on a “pay as you go system” in which current workers are paying for those who have retired. In other words, everybody takes their turn working and paying taxes towards Medicare. Then upon becoming eligible, these same people have access to the system while others work.
- Medicare Trust Funds are safe, and there will always be plenty of money to sustain the program. Did you know that the estimated cost of Medicare is approximately $491 billion for 2011? This equals roughly 19 percent of estimated federal spending.
As more and more baby boomers continue to retire, the cost of Medicare is going to double – at the very least. By the year 2025, the United States Census Bureau is estimating that the over 65 population will increase by close to 80 percent. Simply put, this means that more people are going to be eligible for Medicare.
Upon retirement I am automatically eligible for Medicare. Remember this: retirement and the Medicare program are not related to one another. Unless you have a disability that allows you to receive Medicare benefits, you are ineligible until you are 65 years old. This holds true no matter what age you decide to retire.
- Medicare will take care of all my medical expenses. This is perhaps the most common myth. Medicare Part A is responsible for covering your room and board should you end up in the hospital or other type of medical facility. That being said, it does not cover medical services.
Medicare Part B is responsible for covering services such as doctor visits and procedures. With this, you will have to pay a deductible as well as 20 percent of incurred fees.
- I will be automatically enrolled in the Medicare program upon turning 65. This is part fact and part myth, and depends largely on your work history. You are automatically enrolled in Medicare Part A if you have worked at least 40 quarters. Those who began to receive social security payments at 62 will receive automatic enrollment for Part B.
If you have not worked 40 quarters and/or do not receive social security benefits, you will need to contact your local social security department to enroll.