Gary Smith, Medicare Insurance Agent

The Medicare Mistake Millions Make - and How Local Agents Fix It

March 26, 2025

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Is Medicare fraud an issue I should be worried about?

Answer: Yes, it’s definitely something to be aware of. Medicare fraud is a real problem, costing Americans a lot of money each year.

Scammers know that Medicare is a huge opportunity to take advantage of vulnerable people, so be cautious. The government estimates that Medicare loses tens of billions of dollars each year to fraud, error, and abuse. In 2022 alone, the Department of Justice reported recovering over $1.7 billion in healthcare fraud cases. Seniors are often the main targets because scammers know you rely on your benefits.

What does that fraud look like? Sometimes it involves billing for care you never received. Other times, it’s charging for expensive equipment, like a power wheelchair, when you only received a cane. In some cases, it’s straight-up identity theft—using your Medicare number to file fake claims.

The good news is that most fraud can be caught early if you pay attention. Always check your Medicare Summary Notice or Explanation of Benefits. If you see a doctor visit, test, or piece of equipment you didn’t get, that’s a red flag. And remember—Medicare will never call out of the blue asking for your number or show up at your door.

So yes, it’s worth watching for. But if you treat it like checking your credit card bill—just a quick review—you’ll be ahead of most scammers.

What Medicare penalties are most common?

Answer: Here’s a clear breakdown of the most common Medicare penalties people run into:

1. Late Enrollment Penalty for Part B (Medical Insurance)

When it happens: If you don’t sign up for Part B when you’re first eligible and don’t have other “creditable” coverage (like group insurance through a job).

The penalty: Your Part B monthly premium goes up 10% for each full 12-month period you were eligible but didn’t enroll.

Duration: You pay this higher premium for as long as you have Part B.

2. Late Enrollment Penalty for Part D (Prescription Drug Coverage)

When it happens: If you go 63 days or more without Part D coverage (or other creditable drug coverage).

The penalty: Your Part D premium increases by 1% of the “national base beneficiary premium” for each month you didn’t have coverage. (This amount can change each year.)

Duration: You pay the penalty for as long as you have Part D.

3. Medicare Advantage (Part C) Late Enrollment Issues

No direct “penalty,” but if you miss your enrollment periods, you may have to wait until the Annual Enrollment Period (Oct 15–Dec 7) to join a plan.

During that wait, you may be left without the coverage you want.

✅ In short:

Part B Penalty = 10% higher premium for every year late.

Part D Penalty = 1% higher premium for every month late.

Part C (Advantage) = Not a penalty, but missed timing can leave gaps in coverage.

I've heard that once you're on Medicare, you might not need life insurance as much. Is that true?

Answer: It's not 100% true that you won't need life insurance once you're on Medicare. Medicare covers a lot of healthcare costs, like hospital stays and doctor visits, but it doesn't replace the financial protection life insurance offers for your loved ones, such as covering debts, funeral expenses, or providing income after you're gone.

What do you enjoy most about working with Medicare clients?

Answer: There’s nothing quite like the feeling of helping someone who’s confused and overwhelmed by the Medicare enrollment process. Easing their stress and guiding them to the right plan is truly rewarding.