10 Costly Medicare Mistakes (and How to Avoid Each One)

The costliest Medicare mistakes are missing your Initial Enrollment Period, skipping Part D when you have no other drug coverage, and picking the wrong plan type for your health needs. Each one can trigger a lifelong penalty or thousands of dollars in avoidable out-of-pocket costs.

Whether you’re enrolling for the first time or adjusting your plan, avoiding common mistakes is crucial. Making mistakes in your health insurance can lead to higher annual costs. At Medicare Advocates, we are dedicated to helping seniors make informed decisions about their coverage. Whether it’s Original Medicare or Medicare Advantage, we want you to have the right plan. That’s why, in this guide, we’ll outline the top 10 Medicare mistakes and how to avoid them.

1. Missing Your Initial Enrollment Period (IEP)

The Initial Enrollment Period (IEP) starts three months before your 65th birthday and lasts for seven months. Missing this window can result in lifelong penalties.

Many people assume they will be automatically enrolled in Medicare when they turn 65. However, that’s only true if you’re receiving Social Security or RRB benefits. Otherwise, you must enroll yourself. This is most often the case for individuals who are still working when they turn 65. Failing to enroll in your initial enrollment period increases the premium for Part B. Not sure whether this applies to you? See who is eligible for Medicare.

The penalty is 10% of the Part B premium ($202.90/month in 2026) for every 12-month period you did not have Part B or job-based insurance that allowed you to delay enrollment.

Mark your calendar and enroll on time through Medicare.gov or a licensed Medicare Advocate.

2. Choosing the Wrong Medicare Plan

Medicare offers several options, including Original Medicare (Parts A & B), Medicare Advantage (Part C), and Medicare Supplement (Medigap) plans. Choosing the wrong one could mean unexpected expenses or limited provider choices.

There is no one “right plan.” The right plan for you depends entirely on your unique health needs. Some of the factors you should weigh to determine the right plan for you are:

• Benefits. Original Medicare only offers hospital and Medical insurance. Additional coverage must be purchased through supplemental plans. Medicare Advantage, on the other hand, bundles Parts A, B and almost always D, and often offers other benefits as well. If you need more coverage than Original Medicare offers, Medicare Advantage may be more cost effective.
• Cost. Original Medicare is predictable with costs, while costs in Medicare Advantage can vary. If you are not medically needy, Original Medicare may be cheaper.
• Flexibility. On Original Medicare, you can see any doctor that accepts Medicare. On Medicare Advantage, you often must receive care within a network of doctors and hospitals.

Compare plans based on your healthcare needs, preferred doctors, and medication coverage before enrolling. For more details about choosing the right coverage, here are some tips for when to choose Medicare Advantage.

3. Ignoring Medicare Part D (Prescription Drug Coverage)

Many beneficiaries think they don’t need Medicare Part D if they don’t take medications. Similar to Part B, failing to enroll when eligible may lead to late enrollment penalties and limited future options.

According to a 2024 publication by the CDC, almost 87% of seniors took prescription medication. Only roughly one out of every ten older individuals do not need medications. Chances for most individuals are that you’ll eventually need prescriptions. Even if you don’t currently take prescriptions, it’s best to enroll in a low-cost Part D plan to avoid penalties.

4. Not Understanding Medicare Advantage vs. Medigap

Medicare Advantage plans often have lower upfront costs but network restrictions, while Medigap plans provide broader coverage with higher premiums.

Costs on Medigap plans are more predictable, whereas Medicare Advantage can vary in costs. However, Medicare Advantage usually offers more coverage bundled under one premium.

Consult with a Medicare expert to determine which option suits your budget and healthcare preferences.

5. Assuming Medicare Covers Everything

Original Medicare only covers hospital and medical expenses. Medicare Supplement plans only offer select additional coverage. For example, Medicare and Medicare Supplement do not offer dental, vision and hearing coverage. Many people assume their drugs are covered on Medicare, not understanding they need a Part D plan. This leads to being surprised with unexpected high costs.

The best way to avoid this is understand your plan. Whether you’re on Original Medicare or Medicare Advantage, be familiar with your coverage. Additionally, if any of these things are important, you can consider a Medicare Advantage plan.

6. Ignoring Medicare’s Annual Enrollment Period (AEP)

One of the bigger Medicare mistakes is ignoring the Annual Enrollment Period. Many things change in health insurance each year. The list and number of available plans often change. Your plan benefits, provider network and drug formularies may change too. Many beneficiaries stick with the same plan year after year without reviewing changes. This may surprise you with higher costs. Even if your plan remains unchanged, it is worth checking to see if any new plans have moved into your area. You may find better coverage options this way.

Review your Medicare plan each year during the Annual Enrollment Period (Oct 15 to Dec 7) to ensure it still meets your needs.

7. Not Understanding Special Enrollment Periods (SEPs)

Many people think they can only enroll in or change Medicare plans during the Annual Enrollment Period. However, certain life events qualify for a Special Enrollment Period, allowing you to make changes outside of the usual enrollment windows. Some of these events include:

• loss of a job
• being married or divorced
• loss of Medicaid
• having a child
• domestic abuse

Know your SEP eligibility criteria and take advantage of these windows when needed. If unsure, consult a Medicare Advocate for guidance.

8. Not Understanding Out-of-Pocket Costs

Original Medicare covers 80% of Part B expenses, leaving you responsible for 20% with no cap. Without supplemental coverage, this can be financially devastating in case of major health issues. This can also cause you a lot of expenses throughout the year if you frequent the doctor.

Those who have chronic conditions especially face high expenses on Original Medicare. Individuals who regularly visit the doctor should consider a Medigap plan or Medicare Advantage plan with an out-of-pocket maximum to protect yourself from excessive medical bills.

9. Not Taking Advantage of Preventive Services

Medicare covers many preventive screenings and annual wellness visits for free. These visits can help detect early signs of physical, mental or even emotional instability. Detection of any condition early drastically increases the chances of it’s treatment or delay. However, many beneficiaries fail to use these preventative services. This causes higher healthcare costs, both due to longer or more frequent treatments, or even heavier treatments. Take advantage of your benefits, and keep yourself safe from these Medicare mistakes.

Schedule your free annual wellness visit and take advantage of preventive care services available under Medicare.

10. Falling for Medicare Scams

Scammers frequently target Medicare beneficiaries, often posing as Medicare representatives to steal personal information or enroll you in plans without your knowledge. Be very careful with you you give your Medicare or SSN to.

Medicare will never call or email you for personal information. Only work with licensed agents and verify all Medicare communications.

Frequently Asked Questions

What are the most costly Medicare mistakes?

The most expensive mistakes are missing your Initial Enrollment Period, skipping Part D when you have no other creditable drug coverage, and choosing the wrong plan type for your health needs. Each one can add a lifelong penalty or leave you with thousands of dollars in yearly out-of-pocket costs.

How much are Medicare late-enrollment penalties?

The Part B penalty is 10% of the standard premium for every 12 months you could have had Part B but did not, and you keep paying it for as long as you have Part B. The Part D penalty is 1% of the national base premium for each month you went without creditable drug coverage.

Is it a mistake to choose Medicare Advantage over Medigap?

Neither is a mistake on its own; the mistake is picking the one that does not fit you. Medicare Advantage bundles coverage with low or $0 premiums but uses provider networks, while Medigap costs more each month but lets you see any doctor who accepts Medicare with more predictable costs.

Conclusion

Avoiding these common Medicare mistakes can save you time, money, and stress. By staying informed, reviewing your options annually, and seeking expert guidance, you can ensure you have the right Medicare coverage for your needs.

Need help choosing the best Medicare plan? Contact a licensed agent today to get personalized assistance.