12 Big Mistakes People Make With Medicare

Medicare plays a significant role in providing health care coverage for retirees and eligible individuals across the country. However, understanding how the program works—and making the right choices—can be complicated. With so many enrollment windows, rules, and coverage options, mistakes happen far too often.

These errors can be expensive, whether it’s paying higher premiums, facing penalties, or missing coverage you need. Deciding on a Medicare plan goes beyond picking coverage—it’s about aligning your choices with your long-term finances and healthcare needs.

This post explores 12 common mistakes people make when signing up for Medicare or managing their benefits. By avoiding these pitfalls, you can save money, protect your coverage, and make decisions that align with your long-term goals.

Mistake #1: Missing the Initial Enrollment Period

Failing to register for Medicare during the Initial Enrollment Period can lead to lasting problems, including higher costs and gaps in your coverage. This enrollment window starts three months before your 65th birthday, continues through your birth month, and ends three months after. Missing this seven-month timeframe may result in delays and late fees that remain with you for the duration of your coverage.

Putting off Part A enrollment can result in a lifetime penalty. Your monthly premium could rise by 10% for each year you delay, and you’ll pay the higher rate for double the time you waited. For Part B, postponing enrollment leads to a penalty that adds 10% to your monthly premium for each year you wait after becoming eligible.¹

Please Note: For those receiving Social Security benefits at least 4 months before Medicare eligibility (i.e. age 65), you’ll automatically be enrolled in Part A and Part B. That said, planning ahead and being aware of your enrollment period can save you from unnecessary expenses or gaps in coverage.²

Mistake #2: Overlooking Special Enrollment Periods

Not taking advantage of a special enrollment period when eligible can result in penalties or a lapse in your Medicare benefits. These periods allow you to join or change your Medicare plan outside the regular windows under specific circumstances. Acting quickly during these situations can help you avoid financial setbacks.

Here are some common situations you should be aware of:

Retirement or Job Loss: When leaving employer-based health insurance, you typically have eight months to enroll in Medicare.³ Keep in mind that COBRA and retiree health plans don’t qualify as active coverage for Medicare purposes. Depending on them alone without signing up for Medicare could result in penalties.

Relocation or Service Area Changes: If you move to a location where your current plan doesn’t apply, you can sign up for a new plan during a special enrollment period. Address updates and plan changes should happen quickly to fill any potential gaps in coverage.

Medicare-Medicaid Transition: If you lose Medicaid eligibility, adjustments to your Medicare plan or a new enrollment may be necessary. Without the right actions during this transition, your access to health care could be affected.

Please Note: The above list is not exhaustive of the circumstances that can warrant a special enrollment period. For more details on situations that may specifically apply to you or a loved one visit the Medicare special enrollment periods page here.

Mistake #3: Ignoring Medicare Part D Enrollment

Skipping Medicare Part D can lead to unnecessary costs, even for individuals who currently don’t use prescription medications. Designed to help with prescription drug plans, Part D is an important component of Medicare that many people delay signing up for—often at their financial peril.

It’s very important to remember that the penalty for delaying your Medicare Part D plan enrollment is typically permanent. For each month without creditable coverage, 1% of the national base premium is added to your monthly premium, meaning costs rise the longer you wait.⁴ For instance, a one-year delay would result in an extra 12% tacked onto the national base premium for as long as you’re enrolled.

Even if you don’t currently need prescriptions, enrolling during your eligibility period protects against unexpected costs later. If you already have creditable drug coverage, like an employer plan, confirm that it meets Medicare standards. Otherwise, you might still face a penalty when eventually joining Part D.

Please Note: If you believe your Part D late enrollment penalty was applied incorrectly, you can file an appeal. Submit a form with proof of prior creditable coverage within 60 days to begin the process. To avoid losing your plan, you’ll need to pay the penalty while Medicare reviews your case. Appeals are typically processed within 90 days, and if approved, your premiums will be adjusted, and any overpayments refunded.⁴

Mistake #4: Delaying Supplemental Coverage (Medigap) Enrollment

Waiting to purchase a Medigap plan can leave you with fewer options and higher expenses. These plans cover out-of-pocket costs that Medicare doesn’t pick, like deductibles, coinsurance, and other medical bills. Timing is a key factor when it comes to choosing a Medigap plan.

The best time to purchase a Medigap plan is during its six-month open enrollment period, which begins once you’re 65 and enrolled in Part B. Insurers are required to provide coverage during this time, regardless of health conditions. Missing this window could mean higher premiums or even denial of coverage.⁵

Without a Medigap plan, you’re responsible for costs that Original Medicare doesn’t cover. These could include extended hospital stays or ongoing treatment needs, which can add up quickly. Medigap offers a financial safety net by reducing out-of-pocket exposure. Moreover, taking advantage of the initial enrollment window gives you access to better pricing and simpler approval, helping you avoid unnecessary stress and financial strain later.

Mistake #5: Failing to Compare Original Medicare and Medicare Advantage

Without a proper comparison of Original Medicare and Medicare Advantage plans, you may find yourself with unexpected costs or inadequate coverage. Both programs offer substantial benefits, but they work differently, and understanding those differences is key to making the right choice. Consider the following:

Coverage Differences: Original Medicare includes Part A (hospital care) and Part B (medical services), but it doesn’t cover everything. You might need a Medicare supplemental plan to help with expenses like coinsurance and deductibles. Medicare Advantage plans, however, offer a comprehensive alternative that bundles hospital stays, doctor visits, and prescription medications into a single plan, with some even providing additional perks like dental or vision care.

Network Restrictions: Many Advantage plans limit you to a specific network of doctors and hospitals. Seeking care outside this network often means higher bills or no coverage. Original Medicare gives you more freedom, allowing visits to any provider that accepts Medicare, which can be a significant advantage for those who prefer flexibility.

Cost Considerations: While Advantage plans typically have lower premiums, they may involve more out-of-pocket payments through copays and maximum limits. Original Medicare, when combined with a Medigap plan, offers more predictable costs, although premiums can be higher.

Additional Benefits: Perks like gym memberships or hearing aid coverage are common with some Advantage plans. However, it’s important to focus on whether the plan meets your medical needs, rather than basing your decision solely on these extras.

Mistake #6: Overlooking Provider and Hospital Networks

Failing to check whether your preferred doctors and hospitals are covered by your plan can result in unexpectedly high medical expenses. This issue is particularly relevant for Medicare Advantage plans, which often depend on specific networks. Even with Original Medicare, some providers may not accept Medicare, so confirming participation is a good idea.

One common mistake is assuming your provider’s status hasn’t changed from the previous year. Networks can shift annually, so verifying coverage during the open enrollment period is a smart step. This period gives you the opportunity to make changes or switch plans if needed.

You should also confirm that all professionals involved in your medical care are in-network. For instance, while your primary physician or surgeon might be covered, the anesthesiologist or lab testing provider might not be. These unexpected gaps in coverage can lead to higher out-of-pocket costs.

Regularly going over your plan’s network helps you avoid costly surprises and prevents interruptions in care. Staying informed about your provider options ensures smoother access to the care you need.

Mistake #7: Ignoring Annual Plan Reviews

Failing to review your Medicare plan each year can lead to unexpected costs or lost coverage. Plans regularly adjust their premiums, copayments, and provider networks, and ignoring these updates could mean paying more or receiving fewer benefits than before.

Changes to drug formularies, which determine the medications a plan covers, are also common. A medication you take now may no longer be covered or could be placed in a more expensive tier. Open enrollment gives you the opportunity to reassess your current plan and switch to a more suitable option if needed.

Your insurer provides an Annual Notice of Change (ANOC) document to highlight updates to your plan. Skipping this review may result in missed opportunities to adjust your coverage to fit your current healthcare needs. Reviewing and comparing options annually can help you avoid surprises.

Mistake #8: Assuming Medicare Covers Long-Term Care

Many assume that Medicare will cover long-term care, but this is incorrect. While Medicare provides coverage for short-term skilled nursing or rehabilitation following a hospital stay, it does not pay for custodial care like assistance with dressing, bathing, or eating.

Medicare only pays for skilled nursing care under specific circumstances, such as short-term recovery after sickness or surgery. Even then, coverage is capped at 100 days and comes with strict eligibility rules.⁶

Long-term care insurance can help pay for extended care needs, such as nursing homes, assisted living, or in-home care. Without this coverage, families often rely on savings or Medicaid, which has stringent financial qualifications. Understanding the limits of Medicare coverage allows you to explore other options for managing long-term care expenses.

Mistake #9: Underestimating Out-of-Pocket Costs

The costs tied to Medicare can go well beyond monthly premiums, catching many people by surprise. Deductibles, copayments, and coinsurance often make up a significant portion of medical expenses, depending on the services you use and the coverage you select. Accounting for these potential costs is a key part of managing your healthcare budget.

Here are some important costs to keep in mind:

Premiums: Both Part B and Part D require a monthly payment. Additional premiums apply if you choose a Medicare supplemental plan or Medicare Advantage plan. High earners may also encounter an Income Related Monthly Adjustment Amount (IRMAA), which raises premiums for Parts B and D.

Deductibles and Copayments: Depending on your coverage, you could owe a deductible for hospital stays under Part A or copayments for outpatient care under Part B. The amount will vary depending on the plan.

Coinsurance Fees: Original Medicare typically covers 80% of approved costs, leaving you responsible for the other 20% (Medicare.gov). Without supplemental insurance, this remaining portion can quickly add up.⁷

Budgeting for Costs: Taking time to estimate your yearly medical expenses can give you a better understanding of how these costs may affect your budget. Many tools and professionals are available to help you navigate this process.

Mistake #10: Mismanaging Coverage Coordination with Employer Insurance

If you have employer-sponsored health coverage, coordinating it with Medicare can be complicated. Misunderstanding how these plans interact could lead to gaps in coverage or unanticipated expenses.

The relationship between your employer’s insurance and Medicare depends largely on the size of the company. For companies with 20 or more employees, your employer’s plan is usually primary, while Medicare serves as secondary coverage.⁸

For smaller companies, Medicare typically becomes primary once you are eligible, meaning you’ll need to enroll in Medicare to avoid paying significant out-of-pocket costs.

If you’re retiring, it’s important to know how your employer coverage will end and when Medicare begins. If you lose employer-sponsored health insurance, you have a special enrollment period that lasts up to eight months and allows you to sign up for Part B without incurring penalties. Missing this opportunity could result in late enrollment fees.

Mistake #11: Neglecting High-Income Surcharge Impacts

For those with higher incomes, Medicare’s Income Related Monthly Adjustment Amount (IRMAA) can significantly raise costs. This surcharge applies to Part B and Part D premiums, based on your modified adjusted gross income (MAGI) from two years prior.

You may have to pay surcharges on the premiums of your Part B and Part D coverage based on your modified adjusted gross income (MAGI) from two years ago. Without proper planning, these charges can become a very expensive, unexpected burden.

IRMAA is applied in tiers, with individuals earning more than established thresholds paying higher premiums than standard rates. These surcharges are recalculated annually, so any changes to your income can directly impact your costs.

Using strategies like carefully managing withdrawals from retirement accounts can help you avoid crossing income thresholds unnecessarily. If a significant life event such as a loss of a spouse or income reduction occurs, you can appeal your IRMAA calculation. Filing an appeal may lower your premiums if your income has dropped substantially.⁹

Mistake #12: Attempting to Navigate Medicare Alone

Trying to manage Medicare decisions without professional help can lead to costly errors. The program’s numerous plan options, enrollment rules, and cost considerations can be overwhelming for most individuals. Without a full understanding, it’s easy to make mistakes that result in higher expenses, penalties, or insufficient coverage.

Medicare advisers and State Health Insurance Assistance Program (SHIP) counselors can simplify this process. These professionals provide tailored advice, helping you make informed choices about coverage and costs. Their expertise can prevent many of the common errors associated with Medicare.

Online resources like Medicare.gov’s Plan Finder can also assist with plan comparisons and cost estimates. While these tools are useful, pairing them with personalized advice from an expert ensures that your decisions align with your unique needs.

Additionally, financial advisors can offer valuable insight into how Medicare fits into your overall retirement and financial strategy. They can guide you on tax-efficient ways to handle healthcare costs, recommend approaches for managing retirement withdrawals, and plan for future medical expenses. By addressing healthcare as part of your broader financial goals, you create a more holistic approach to managing your resources.

We Can Help You Avoid These Mistakes

At Snowpine Wealth, we help you navigate Medicare with clarity, giving you the tools and guidance to make decisions that fit your needs and goals. Whether it’s comparing Medigap plans, evaluating Medicare Advantage plans, or coordinating employer-sponsored insurance, we work with you to create a personalized strategy that fits your needs.

We focus on addressing the common challenges people face, including managing out-of-pocket costs, understanding income related monthly adjustment amounts, and planning for future healthcare expenses. Our team takes the time to explain your options and guide you toward decisions that protect both your health and your financial stability.

While tools like Medicare.gov’s Plan Finder are helpful for comparing options, we go a step further. Our guidance ensures that your Medicare choices align with your broader financial goals, whether you’re transitioning from employer-based insurance or planning for long-term expenses.

Let us help you navigate these decisions with clarity and care. Reach out to Snowpine Wealth today by using the button below, and design a Medicare plan that works for you. Our team is committed to supporting your health and financial priorities every step of the way!

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Snowpine Wealth Strategies does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.

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