Navigating Medicare can be confusing, and even small mistakes can lead to costly lifelong penalties or gaps in coverage. Below are 10 of the most common errors and guidance on how to avoid them.
1. Choosing the Wrong Medicare Path
As a beneficiary, you have two main ways to receive benefits:
- Original Medicare (Part A and Part B) – Government-managed coverage. You can add a Medicare Supplement Insurance (Medigap) policy to help pay for deductibles, coinsurance, and copayments, plus a Part D Prescription Drug Plan for medication coverage.
- Medicare Advantage (Part C) – Offered by private insurers. These plans include Part A and B benefits and may bundle extra features like prescription drugs, dental, vision, and hearing.
Learn more about Medicare basics.
2. Assuming You’re Automatically Enrolled
Some people are enrolled in Medicare automatically at 65, but many are not. You will be automatically enrolled in Part A and Part B only if:
- You already receive Social Security or Railroad Retirement Board benefits.
- You’ve received disability benefits for at least 24 months.
- You have ALS (Lou Gehrig’s disease).
If you do not receive your Medicare card by mail, you must apply manually through the Social Security Administration. See Medicare eligibility and enrollment rules.
3. Missing Your Initial Enrollment Period
Failing to enroll at the right time can lead to permanent penalties. For Medicare Part B, your premium increases 10% for every 12 months you were eligible but not enrolled. Your Initial Enrollment Period (IEP) runs for 7 months around your 65th birthday.
If you’re still working and covered by employer insurance, confirm that your coverage is “creditable” to avoid penalties later. Otherwise, plan to enroll during your IEP. If you miss it, you may need to wait until the General Enrollment Period (Jan 1 – Mar 31), and your coverage won’t begin until July 1.
Learn more about Special Enrollment Periods.
4. Overestimating COBRA or Retiree Coverage
COBRA or retiree benefits do not count as primary coverage after age 65. If you rely on them without enrolling in Medicare Part B, you may face late penalties and gaps in coverage. Always confirm whether your employer plan qualifies as creditable coverage before delaying Medicare.
5. Overlooking Prescription Drug Coverage
Original Medicare offers limited prescription coverage. To avoid costly gaps, most beneficiaries add a Part D plan for medication costs. Medicare Advantage plans often include drug coverage, but Original Medicare requires a separate Part D policy.
6. Underestimating Out-of-Pocket Costs
Original Medicare does not cover all services. You’re still responsible for premiums, deductibles, copayments, coinsurance, and services like excess charges. It also does not cover dental, vision, hearing, or long-term care. Learn more about Medicare out-of-pocket costs.
7. Confusing Medigap with Medicare Advantage
You cannot have both at the same time.
- Medigap plans supplement Original Medicare, covering many out-of-pocket expenses. There are 10 standardized plans available in most states.
- Medicare Advantage replaces Original Medicare with a private plan that includes Part A and Part B benefits, and often prescription drugs, dental, vision, or hearing.
Compare Medigap vs. Medicare Advantage.
8. Assuming Spouses Can Share Coverage
Each spouse needs their own Medigap policy. Some insurers may offer small spousal discounts, but Medigap coverage is always individual. Be sure to ask insurers about discounts if you and your spouse apply together. Find a Medigap policy.
9. Not Exploring Financial Assistance
If Medicare costs are overwhelming, programs may help:
- Extra Help – Reduces prescription drug costs.
- Medicare Savings Programs – May cover Part A or Part B premiums.
- Medicaid – For those with very limited income and resources.
- PACE – Community-based care for seniors who qualify.
Learn more about Medicare cost assistance.
10. Missing Your Medigap Open Enrollment Period
Your best time to buy a Medigap plan is during your 6-month Open Enrollment Period (OEP). This begins when you are 65 or older and enrolled in Medicare Part B. During this window:
- Insurers cannot deny coverage or charge more due to health status.
- You can switch plans freely.
- Coverage begins right away (with limited exceptions for pre-existing conditions).
If you wait, you could be denied coverage or pay higher premiums. Learn more about Medigap Open Enrollment.
Bottom line: Avoiding these 10 mistakes can save you money, prevent penalties, and ensure that your Medicare coverage meets your health care needs. Always compare your options carefully, and consider seeking expert guidance before enrolling.