Medicare confusion hurts your health and costs you money. Experts help explain what you need to know

Wrong.

In fact, several recent surveys show that most Medicare beneficiaries are quite confused about Medicare’s coverage and costs.

For example, in a MedicareAdvantage.com survey of 2,013 people aged 65 to 99, 65% of Medicare beneficiaries said the government’s health insurance program was confusing and difficult to understand. This is the third year the site conducted a similar survey and confusion about Medicare abounded each time.

Medicare confusion: ‘surprising and troubling’

“It’s equal parts surprising and troubling,” says Christian Worstell, who conducted the recent survey. “I write about Medicare as my full-time job, and I agree that it is confusing. Imagine how confusing it is for someone not reading about it, researching it and writing about it every day.”

In a Retirement Living survey of 351 beneficiaries of private insurers’ Medicare Advantage plans (the alternative to Original Medicare), only 44% say they fully understand their plan. One in eight misinterpreted aspects of their plan after enrolling.

But, Worstell says, “knowledge is power when it comes to making the most of your benefits and enrolling in the right coverage that fits your needs.”

When Medicare beneficiaries or people about to enroll in Medicare don’t understand how it works, they can wind up paying more for their health care than necessary and miss out on getting the coverage that’s available to them.

In fact, Retirement Living’s survey found that 51% of Medicare Advantage beneficiaries said their confusion led to unexpected bills for uncovered services and 46% said they had higher than expected out-of-pocket costs.

Ari Parker, co-founder of the Medicare advisory service Chapter, is also surprised how little older Americans know about Medicare.

“If they know where to turn to find information, it’s not that complicated,” he says.

Medicare‘s many moving parts

Others may disagree about Medicare not being that complicated. Consider:

The original Medicare law and subsequent rules are massive. According to Parker’s own book, It’s Not That Complicated: The Three Medicare Decisions to Protect Your Health & Money, the 1965 law creating Medicare was over 1,400 pages and tens of thousands of pages of rules and regulations have been added since then. Parker wrote that when President Lyndon Johnson tried to explain his new Medicare program to journalists, he mangled it so much that the White House Press Secretary had to get the media to retract his description.

Medicare is like a train running on two tracks. One is Original Medicare, which includes Part A (hospital insurance) and Part B (doctor’s visits, home health care, medical equipment and preventive services). The other is Medicare Advantage (Part C), which includes coverage Original Medicare doesn’t with a limited network of doctors and hospitals. There will be 3,959 Medicare Advantage plans nationwide in 2024; the average Medicare beneficiary will have access to 43, according to the health policy research and news organization, KFF.

You need to understand all of Medicare’s Parts—A, B, C and D. To get Part C or D, you need to shop among health insurers and compare costs and benefits. There will be 709 stand-alone prescription drug plans for people with Original Medicare in 2024; the average beneficiary will have a choice of nearly 60, says KFF.

Then there’s another insurance policy you can buy to help pay for what Parts A and B don’t. It’s a Medicare Supplement policy, or Medigap, and you need to shop around if you want it, too.

Plus, Medicare has five enrollment periods: Open Enrollment from Oct. 15 through Dec. 7; Initial Enrollment (three months before you turn 65 through three months after your birthday month); the eight-month Special Enrollment after you lose health insurance from your employer or your spouse’s and the two periods from Jan. 1 to March 31—General Enrollment, if you didn’t sign up for Medicare Part B during Initial Enrollment and don’t qualify for Special Enrollment and Medicare Advantage Enrollment, if you’re in a Medicare Advantage plan and want to switch to another or drop it and enroll in Original Medicare.

As Worstell says: “There’s a lot of moving parts; ifs, ands and buts. There are lot of terms and exceptions. ‘Does Medicare cover this? Well, yes, but only if the following 11 things are true.”

Worstell notes that health insurance itself can be confusing and the Medicare overlay only adds to the public’s insurance literacy problems.

What people don’t know about Medicare

So, what are people eligible for, or on, Medicare confused or wrong about? Here are six examples:

2. Doctor’s fees

When current beneficiaries or people about to enroll in Medicare don’t understand how it works, they can wind up paying more for their health care than necessary. This is called an “excess charge” and can be up to an extra 15% of the doctor’s bill.

3. Mental health benefits

More than two-thirds (71%) of them don’t know Medicare covers inpatient and mental health treatment. “It’s troubling to think how many people might need mental health treatment and are not seeking it out because they think it won’t be covered by Medicare and don’t want to have to pay for it out of pocket,” says Worstell.

4. Assisted devices

Only 29% knew that Original Medicare typically covers walkers, rollators, and wheelchairs. “I think most people don’t really associate equipment and devices with insurance,” Worstell says.

5. Plan changes

In a survey of people 65+ from The Commonwealth Fund, 54% weren’t sure how difficult it was to switch from Medicare Advantage to traditional Medicare and get a Medigap policy. Another 21% didn’t know that was even an option.

6. Out-of-pocket costs

A 2023 KFF survey found only 34% of people 65+ knew there’s a federal law (2022’s Inflation Reduction Act) that limits out-of-pocket prescription drug costs for people with Medicare.

Learning the ins and outs of Medicare can be intimidating and “it’s not fun,” Worstell says. “Nobody likes to sit down and weed through all these benefits and costs,” he adds.

Where to Learn About Medicare

There are quite a few places to bone up on Medicare, though beneficiaries rarely use many of them, according to the MedicareAdvantage.com survey.

Some of the best Medicare resources

Medicare.gov. This is the official government site that explains how Medicare works and how to enroll or switch plans. It also has the useful Medicare Plan Finder tool that lets you find and compare Medicare Advantage plans, Part D drug plans and Medigap policies.

1-800-MEDICARE (800-633–4227). It’s Medicare’s toll-free number where you can speak to a human to get questions answered. A Medicareadvantage.com article about it says the fastest way to get through this toll-free number’s phone tree to get assistance is to say “Coverage and Benefits” or press 5 on your phone keypad.

The government’s free Medicare & You 2024 handbook. You can read it online or get a copy mailed to you. This guide is written in plain English and has a useful index.

State SHIP programs. SHIPs (full name: State Health Insurance Assistance Programs) offer free, unbiased phone help about Medicare from state government experts.

Medicare brokers and agents. They sell Medicare Advantage plans, Part D prescription drug plans and Medigap policies and are paid by the insurers.

Medicare books and websites. Three useful books are Medicare for You by Diane Omdahl, Get What’s Yours for Medicare by Philip Moeller and It’s Not That Complicated by Ari Parker. Websites worth checking out are ones from Chapter, which has a free Medicare Decision Worksheet you can download) and Hello Medicare; both sites also sell Medicare policies.