Key Takeaways

• Missing critical Medicare enrollment deadlines can lead to lifelong penalties and gaps in coverage.

• Understanding the different Medicare enrollment periods helps you avoid costly mistakes and ensures you get the coverage you need.

7 Medicare Enrollment Mistakes That Could Cost You Big Time

Medicare is an essential part of healthcare for millions of Americans aged 65 and older, as well as certain younger individuals with disabilities. But while Medicare provides great benefits, navigating its enrollment process can be tricky. Missing deadlines or making the wrong choices can cost you a lot—both financially and in terms of access to care. To help you avoid these pitfalls, let’s break down seven of the most common Medicare enrollment mistakes you need to steer clear of.

1. Missing Your Initial Enrollment Period (IEP)

Your Initial Enrollment Period (IEP) is a seven-month window around your 65th birthday—starting three months before, including your birth month, and ending three months after. If you don’t sign up for Medicare during this time and don’t have other qualifying coverage, you could face late enrollment penalties that stick with you for life.

Why It’s a Problem:

• The Part B penalty increases your premium by 10% for every full year you delay enrollment without creditable coverage.

• If you miss your IEP, you may have to wait for the General Enrollment Period (January 1 – March 31) to sign up, with coverage not starting until July 1.

2. Assuming You Don’t Need Medicare Because You Have Employer Coverage

Many people continue working past 65 and have employer-sponsored health insurance. While this might seem like a reason to skip Medicare, it depends on your employer’s size.

What You Should Know:

• If your employer has fewer than 20 employees, Medicare becomes your primary insurance, meaning you must enroll in Medicare Part B when you’re first eligible.

• If your employer has 20 or more employees, you may be able to delay Part B without penalty. However, once you stop working, you need to enroll during a Special Enrollment Period (SEP) within eight months to avoid late fees.

3. Not Signing Up for Medicare Part B on Time When Retiring

If you delay Part B because you have employer coverage, you need to sign up as soon as you retire or lose your employer health benefits. The Special Enrollment Period allows you to enroll in Part B without penalties, but waiting too long can leave you without coverage.

Why It’s Risky:

• If you miss the eight-month SEP after retiring, you’ll have to wait until the General Enrollment Period, and a late enrollment penalty may apply.

• You may face a gap in healthcare coverage, which could lead to high out-of-pocket costs.

4. Forgetting About Prescription Drug Coverage (Part D)

Even if you don’t take any medications now, signing up for a Medicare Part D plan when first eligible is crucial. Delaying enrollment without having other creditable drug coverage can result in lifelong penalties.

What Happens If You Skip It?

• If you go 63 consecutive days or more without creditable prescription drug coverage, you’ll face a penalty added to your Part D premium forever.

• The penalty is calculated as 1% of the national base beneficiary premium per month you were without coverage.

5. Enrolling in the Wrong Medicare Plan for Your Needs

Medicare isn’t one-size-fits-all. Some people need Original Medicare (Part A and Part B), while others may prefer a Medicare Advantage plan (Part C). Choosing a plan without considering your healthcare needs, provider network, and prescription coverage can lead to unexpected costs.

Things to Watch Out For:

• Not checking if your preferred doctors and hospitals accept your plan.

• Overlooking potential out-of-pocket costs like copays and deductibles.

• Ignoring whether your medications are covered under the plan’s formulary.

6. Not Reviewing Your Plan Annually During Open Enrollment

Once you enroll in a Medicare plan, don’t assume it will always be the best fit. Plan costs, benefits, and provider networks can change each year, making it essential to review your options annually during the Medicare Open Enrollment Period (October 15 – December 7).

Why It Matters:

• Your premium, deductible, or copayments may increase without you realizing it.

• A medication you take may no longer be covered at the same price.

• A new plan may offer better benefits that suit your needs.

7. Not Enrolling in Medicare Because You’re Covered by COBRA or Retiree Health Insurance

COBRA and retiree health plans may seem like sufficient coverage, but they are not considered creditable coverage for delaying Medicare enrollment.

What You Need to Know:

• If you rely on COBRA and don’t enroll in Medicare when first eligible, you may face a late enrollment penalty for Part B and Part D.

• COBRA coverage usually ends after 18 months, and if you wait until then to enroll in Medicare, you might have to go months without coverage.

• Some retiree health plans require you to enroll in Medicare to remain eligible for benefits.

Make Smart Medicare Decisions to Avoid Costly Mistakes

Medicare enrollment mistakes can lead to financial penalties, coverage gaps, and stress. To avoid these pitfalls:

• Mark your calendar for important enrollment deadlines.

• Check if your current health coverage allows you to delay Medicare without penalties.

• Compare plans annually to ensure you’re getting the best coverage for your needs.

• Consult with a licensed agent listed on this website to get expert guidance and personalized assistance with Medicare enrollment decisions.