There is a lot to understand and many options to consider when it comes to . Even with over 60 million Americans enrolled, there’s still a lot of confusion about how the program works. Common misconceptions surrounding Medicare can end up being costly, so we’ve put together some truth behind some of the most common myths.
Key Takeaways
Coverage Has Limits: Medicare isn't zero-cost, sign-up isn't always automatic, and Original Medicare leaves gaps like long-term custodial care, routine vision, and dental.
Rules Are Evolving: New 2027 Medicaid work requirements may affect coverage for under-65 dual-eligible beneficiaries, making it essential to review your plan annually.
Myth: Medicare and Medicaid are the same thing
While the names sound similar, Medicare and Medicaid are two different programs. Medicare—a federal health insurance program—pays for a variety of health care expenses and services. Depending on your coverage, this could include hospitalizations, physician visits, prescription drugs, preventive services, skilled nursing facility, home health care, hospice care, and more. Originally created for people 65 and older, Medicare also covers those under the age of 65 who have a long-term disability.
Medicaid is a state and federal program that provides health coverage for eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities, regardless of age.1 In some cases, individuals can be eligible for both Medicaid and Medicare, known as , with both programs working together to provide health coverage at a lower cost.
The 2027 Medicaid Work Requirements for Under-65 Dual-Eligibles
The 2027 Rule: By January 1, 2027, 42 states are federally mandated to enforce Medicaid work rules for expansion adults ages 19 to 64. This requirement puts younger dual-eligible beneficiaries (under age 65 with disabilities) who receive Medicaid through state expansion at risk of losing coverage if they do not document 80 monthly hours of qualifying activity or secure a medical exemption.
Early Rollout States: Three states are enforcing these work and reporting requirements ahead of the federal deadline:
Next Steps: If you are a younger dual-eligible beneficiary living in an early rollout state or relying on Medicaid expansion, it is vital to speak with a licensed SelectQuote agent. Our agents can help confirm your exemption status or adjust your coverage to ensure your Dual-Eligible Special Needs Plan (D-SNP) benefits and medical care remain fully intact.
Myth: Medicare covers all of my expenses
Original Medicare has two parts—Part A (hospital insurance) and Part B (medical insurance). Unfortunately, Parts A and B don’t cover everything. In fact, Medicare only pays about 80% of your Medicare-approved services once you hit your Part B deductible. The other 20% is up to you. Most dental care, hearing services, and prescription drugs aren’t covered by Medicare, and additional insurance may be needed. Luckily, there are several options to fill the gaps in your Medicare coverage.
Myth: My prescriptions are covered by Medicare
Original Medicare doesn’t cover all of your prescription drug costs, but Medicare Prescription Drug Plans—also known as —can help cover the cost of both brand-name and generic prescription medications. A Medicare Part D plan can be purchased as a standalone plan, to supplement Original Medicare, or to accompany a .
Another way to get prescription drug coverage is with a —also known as . Medicare Advantage Prescription Drug Plans give you the option to get your Medicare health and prescription drug benefits covered under a single plan.
How will 2027 Medicare Part D changes affect my prescription costs?
The Inflation Reduction Act established a historic $2,100 out-of-pocket maximum on covered prescription drugs for the 2026 plan year. For the 2027 plan year, this annual out-of-pocket cap increases to $2,400 per the.
This cap provides significant financial protection for beneficiaries taking high-cost brand-name or specialty medications. Once your total out-of-pocket spending on covered drugs reaches $2,400 in 2027, you enter the catastrophic coverage phase and pay $0 for your covered Part D formulary prescriptions for the remainder of that calendar year.
Myth: When it comes to Original Medicare, everyone pays the same amount
Premiums, deductibles, coinsurance, and copayments are what make up your out-of-pocket costs under Medicare. The deductibles and coinsurance under Part A and Part B are typically similar for everyone, while premiums for both Part A and Part B vary from person-to-person.
For 2026, the standard monthly Medicare Part B premium is $202.90. However, higher earners pay more due to the income-related monthly adjustment amount (IRMAA). Social Security evaluates your tax return from two years prior—meaning 2024 income for 2026 premiums—and applies a monthly surcharge if your modified adjusted gross income exceeds $109,000 for individual filers or $218,000 for joint filers. Furthermore, out-of-pocket costs like the annual Part B deductible ($283 in 2026) and 20% coinsurance expenses will differ depending on how often you seek medical care.
Myth: Medicare and Medicare Advantage plans are the same
—also known as Medicare Part C—provide an alternative to Original Medicare. These plans are offered by private health insurance companies and are approved by Medicare. Medicare Advantage plans are legally required to offer at least the same benefits as Original Medicare but often also include additional coverage, such as routine vision or dental benefits, prescription drugs or health wellness programs.
Myth: If I have Medicare, I have long-term care insurance
One of the most persistent—and expensive—misconceptions about Medicare is that it doubles as long-term care insurance. While Medicare covers basic healthcare needs, hospitalizations, doctor visits, and short-term rehabilitation, it does not pay for long-term custodial care.
Medicare Part A can cover medically necessary skilled nursing facility care on a temporary basis following a qualifying three-day inpatient hospital stay—up to 100 days per benefit period for medical recovery or rehabilitation. However, Original Medicare and Medicare Advantage plans do not cover long-term custodial care, which includes ongoing assistance with everyday activities of daily living (ADLs) such as bathing, dressing, eating, or moving around, whether in an assisted living facility or nursing home.
For indefinite, non-skilled nursing home stays or in-home personal assistance, beneficiaries must rely on long-term care insurance, private out-of-pocket savings, or Medicaid (if they meet their state's financial eligibility requirements).
Myth: My Medicare coverage is automatic
The only exception to this myth is that if you are already receiving Social Security benefits, then you’ll automatically be enrolled in Medicare Part A and Part B when you turn 65. If you aren’t receiving benefits, though, then you will have to sign up for Part A and Part B, in addition to any other coverage you might want or need. Enrollment in Part D, Medigap, and Medicare Advantage plans is voluntary.
Myth: I can enroll in Medicare whenever I want
While Medicare enrollment is a milestone event, you cannot simply sign up at any time without facing strict timelines or financial consequences. Most people become eligible for Medicare when they turn 65, launching a specific window known as your initial enrollment period (IEP). Your IEP is a seven-month window that includes the three months before the month you turn 65, the month you turn 65, and the three months after.
If you miss this initial window and do not qualify for a special enrollment period (SEP)—such as maintaining creditable coverage through active group employment—you face permanent late enrollment penalties for both Part B and Part D:
Part B Late Enrollment Penalty: For every full 12-month period you were eligible for Part B but didn't sign up, your monthly premium increases by 10% based on the standard Part B premium. This surcharge accumulates each year you delay and is added to your premium for as long as you have Medicare.
Part D Late Enrollment Penalty: If you go 63 consecutive days or more without creditable prescription drug coverage after your IEP ends, you face a Part D penalty. The fee is calculated by multiplying 1% of the national base beneficiary premium by the number of uncovered months. This fee is rounded and permanently added to your monthly prescription plan costs.
Waiting to enroll without qualifying employer coverage not only exposes you to lifetime monthly fees, but it can also restrict you to enrolling only during specific election periods, leaving you temporarily uninsured.
Myth: Medicare is going to disappear
Like virtually all federal programs, Medicare is subject to change. The fact of the matter is that no one knows for certain if, when, or how Medicare will continue to evolve. Medicare evaluates the costs of care and makes adjustments every year, so it’s important to reevaluate your specific coverage, premiums, and deductibles each year to make sure it’s still working for you.
How SelectQuote Can Help You Navigate the Facts
At SelectQuote, we can help you better understand the ins and outs of Medicare and ensure you’re getting all of the available Medicare benefits you deserve. In just minutes, we can compare all the Medicare options available to you. There’s no obligation to enroll.
1. https://www.medicaid.gov/medicaid/index.html
