Medicare Mistakes Can Be Expensive — and Some Are Permanent

Medicare gives eligible Americans access to essential health coverage, but the system has its complexities. Missteps at the wrong time can lead to lifelong premium penalties, gaps in coverage, or unexpected bills. Here are seven of the most common Medicare mistakes — and what you can do to avoid or correct them.

Mistake #1: Missing Your Initial Enrollment Period

Your Initial Enrollment Period (IEP) is the 7-month window surrounding your 65th birthday. Missing this window without qualifying for a Special Enrollment Period means you'll wait until the General Enrollment Period (January 1 – March 31) to sign up — and you could face a permanent late enrollment penalty on your Part B premium.

Fix: Mark your calendar 3 months before your 65th birthday and initiate enrollment early. If you are still working with employer coverage, verify whether you qualify for a delayed Special Enrollment Period.

Mistake #2: Assuming Medicare Is Free

Many people are caught off guard by Medicare costs. While most people pay $0 for Part A, Part B has a monthly premium, and there are deductibles, copays, and coinsurance on top of that. Without supplemental coverage, there's no out-of-pocket maximum.

Fix: Budget for Medicare costs before you retire. Research Medigap plans or Medicare Advantage options that include an out-of-pocket maximum to protect against large unexpected bills.

Mistake #3: Not Enrolling in Part D Because You "Don't Take Many Drugs"

Skipping Part D because you're currently healthy seems reasonable — but if you go 63+ days without creditable drug coverage and later need to enroll, you'll face a permanent Part D late penalty.

Fix: Enroll in at least a low-cost Part D plan when you first become eligible, even if you take few or no prescriptions. It protects you from penalties if your health needs change.

Mistake #4: Not Comparing Plans During Annual Enrollment

Once you're enrolled, it's easy to let your plan auto-renew each year without reviewing it. But plan formularies, premiums, and benefits can change — sometimes dramatically. The plan that served you well last year may cost significantly more this year for the same drugs.

Fix: Every fall, during the Annual Enrollment Period (October 15 – December 7), use Medicare's Plan Finder to review and compare your current plan against alternatives. Look at total estimated costs, not just the premium.

Mistake #5: Choosing a Medicare Advantage Plan Without Checking the Network

Medicare Advantage plans can offer great value, but many use restricted provider networks. Enrolling in a plan where your preferred doctors or local hospital is out-of-network can lead to significantly higher costs — or no coverage at all for certain services.

Fix: Before choosing an Advantage plan, verify that your primary care doctor, specialists, and preferred hospital are all in-network. Call them directly to confirm — directories are not always up to date.

Mistake #6: Misunderstanding the Medicare Savings Program Eligibility

Many low-income Medicare beneficiaries are unaware of or don't apply for Medicare Savings Programs that can help pay premiums, deductibles, and cost-sharing. Millions of eligible individuals miss out on this assistance every year.

Fix: Contact your state Medicaid office, call 1-800-MEDICARE, or visit benefitscheckup.org to see what programs you may qualify for based on your income and resources.

Mistake #7: Dropping Employer Coverage Too Early (or Too Late)

If you or your spouse is still working, the timing of dropping employer group health coverage matters enormously. Dropping it before you're enrolled in Medicare creates a gap in coverage. But some people also delay Medicare unnecessarily when their employer coverage isn't as comprehensive as Medicare would be.

Fix: Before making any changes to employer coverage, speak with your HR department and a Medicare counselor. Determine which coverage is primary and how the two interact. Your State Health Insurance Assistance Program (SHIP) offers free, unbiased counseling.

Quick-Reference Checklist

  1. Know your Initial Enrollment Period dates
  2. Budget for premiums, deductibles, and cost-sharing
  3. Enroll in Part D even if you're healthy
  4. Review your plan every year during Open Enrollment
  5. Verify your doctors are in-network before choosing Advantage
  6. Explore savings programs you may qualify for
  7. Coordinate employer coverage carefully before switching

Avoiding these mistakes can save you hundreds or even thousands of dollars annually, and ensure you have the coverage you need when you need it most. When in doubt, seek guidance from your local SHIP counselor — it's a free resource available in every state.