Financial Red Flags and Scams to Watch Out For
Unfortunately, where there is money, there are scammers. Seniors are often targeted by criminals looking to exploit the complexities of the healthcare system. Being aware of their tactics is your best defense.
Scam 1: The “New Medicare Card” Ploy
A scammer calls you, claiming to be from Medicare. They say your Medicare card is about to expire and you need a new one. To process it, they need you to “verify” your Medicare number, Social Security number, and maybe even your bank account for “direct deposit” of your benefits.
- Red Flag: Unsolicited calls asking for your personal information.
- The Truth: Your red, white, and blue Medicare card does not expire. Medicare will almost never call you unless you have called them first and requested a call back. They will communicate official business through the mail.
- What to Do: Hang up immediately. Do not give out any information. You can report the scam call to the FTC.
Scam 2: The “Free” Medical Equipment or Genetic Test Offer
You see a TV commercial or get a call offering you a “free” back brace, knee brace, or genetic testing kit—all paid for by Medicare. All they need is your Medicare number to confirm your eligibility.
- Red Flag: Offers of “free” medical equipment without a doctor’s order.
- The Truth: Scammers use your Medicare number to bill Medicare for thousands of dollars in equipment or services you never needed or received. This is fraud, and it drives up costs for everyone.
- What to Do: Never accept medical equipment that wasn’t ordered by your doctor. Never give your Medicare number to anyone other than your trusted medical providers.
Costly Mistake: Missing Your Enrollment Deadlines
This isn’t a scam, but it’s a financial mistake with lifelong consequences. If you don’t sign up for Medicare Part B when you are first eligible (the 7-month period around your 65th birthday), you could face a late enrollment penalty. This penalty is a 10% increase in your monthly premium for every 12-month period you were eligible but didn’t enroll. This penalty is permanent and you pay it for as long as you have Part B. A similar penalty exists for not enrolling in a Part D plan when you’re first eligible if you don’t have other creditable drug coverage. Be vigilant about these deadlines to avoid paying more than you need to for the rest of your life.
To protect yourself from scams and for consumer information, consult the Consumer Financial Protection Bureau (CFPB) and the FTC.
Disclaimer: This article is for informational purposes and is not a substitute for professional financial or tax advice. Consult with a certified financial planner or tax professional for guidance on your specific situation.
