Disclaimer: Medicare rules, premiums, and cost thresholds are updated annually. Always verify current figures at Medicare.gov or SSA.gov before making enrollment decisions.
Medicare is one of the most important decisions you'll make heading into retirement. The rules are complicated, the deadlines are strict, and the consequences for getting it wrong can follow you for years. The good news is that most Medicare mistakes to avoid are predictable and entirely preventable.
Here's what you need to know before you enroll, and what to watch out for even after you do.
Why Do Many People Make Mistakes When Choosing Medicare Plans?
Most people don't think about Medicare until they're close to 65. By then, the pressure to figure it out quickly leads to rushed decisions. According to the Medicare Rights Center, a nonprofit consumer service organization, missing deadlines and choosing the wrong type of coverage are among the most costly errors beneficiaries make.
Add in the fact that Medicare has several parts, strict enrollment windows, and income-based surcharges. It's easy to see why so many people struggle with it.
Common Medicare Mistakes That Can Cost You and How to Avoid Them
1. Missing Your Initial Enrollment Window
One of the most common mistakes is assuming enrollment happens automatically. It doesn't, not unless you're already receiving Social Security benefits at least four months before your 65th birthday.
If you're not automatically enrolled, you have a seven-month Initial Enrollment Period (IEP) to sign up for Medicare:
- Three months before your birthday month,
- Your birthday month itself
- Three months after
If you miss that window, you'll generally have to wait for the General Enrollment Period (January 1–March 31). Your Medicare coverage won't begin until the following month.
Miss that window, and the penalties are permanent. According to Medicare, the Part B late enrollment penalty adds 10% to your monthly premium for every full year you delay Medicare. It stays with you for as long as you have Part B. Wait two full years without a qualifying exception, and the math looks like this: $202.90 (2026 standard premium) + $40.58 (20% penalty) = $243.48, rounded to $243.50 per month for as long as you have Part B.
If you're contributing to a health savings account (HSA) through your employer, enrolling in any part of Medicare (even premium-free Part A) makes you ineligible to keep contributing. Plan accordingly before you sign up.
What to do instead: Mark your 65th birthday on the calendar and count backward. You can enroll as early as 3 months before your 65th birthday.
2. Assuming COBRA or Retiree Coverage Buys You More Time
This is a trap many newly retired people fall into. You leave your job, pick up COBRA or retiree health insurance as a bridge, and assume Medicare's clock hasn't started yet, but it has.
Medicare is explicit: COBRA and retiree plans do not count as active job-based coverage. They do not extend your Special Enrollment Period (SEP). According to the Social Security Administration, once you stop working or lose your employer-sponsored plan, whichever happens first, you have 8 months to enroll in Part B without a penalty. That clock starts whether or not you choose COBRA.
What to do instead: Plan your Medicare enrollment before your last day of work. You can sign up up to three months in advance and time your Part B start date to align with your retirement date. If your spouse is the one retiring, the same rules apply to the coverage you carry through their employer.
3. Skipping Part D Because You're Currently Healthy
Passing on prescription drug coverage to save on monthly premiums seems reasonable, especially if you take few or no prescriptions. But this is one of the costliest oversights a new enrollee can make.
The Part D late enrollment penalty is calculated as 1% of the national base beneficiary premium ($38.99 in 2026) for every month you go without creditable drug coverage. That amount is rounded to the nearest $0.10 and added to your monthly premium indefinitely. If you wait 14 months to enroll, there's a 14% penalty on top of your Part D plan premium for the rest of your time on Medicare.
What to do instead: Even if your prescription coverage needs are minimal now, enroll in a low-premium Part D plan to protect yourself from the penalty. Prescription needs can change; a lifelong surcharge won't go away once it's applied.
4. Not Understanding the Difference Between Medigap and Medicare Advantage
This is one of the biggest mistakes people make with Medicare, and it's often made once, with little ability to undo it.
When you first enroll, you face a core decision: stay with Original Medicare (Parts A and B) and add a Medigap (Medicare Supplement) policy along with a separate Part D plan, or enroll in a Medicare Advantage (Part C) plan that bundles all of these into one private plan.
Here's how they compare:
Original Medicare + Medigap | Medicare Advantage (Part C) | |
Provider access | Any doctor or specialist nationwide who accepts Medicare | Must stay within the plan's network for most care |
Referrals | Not required | Often required for specialist visits |
Monthly premium | Higher — you pay Medicare Part B plus a Medigap premium | Often lower; some plans have $0 premium |
Out-of-pocket costs | More predictable; Medigap closes coverage gaps | Variable: 2026 in-network cap is $9,250 |
Extra benefits | Generally not included | May include dental, vision, and fitness |
Drug coverage | Requires a separate Part D plan | Usually bundled |
When comparing Original Medicare against Medicare Advantage, think about what matters most to you: the freedom to see any doctor or specialist for routine visits and medical care without referrals, or lower upfront costs with a managed network. Choosing the wrong plan, especially without fully understanding these trade-offs, can have consequences that are difficult and expensive to reverse.
What many enrollees don't realize is that you cannot have both. Federal law prohibits purchasing a Medigap policy while enrolled in Medicare Advantage. More critically, if you later want to switch back to Medigap, insurers in most states can deny you or charge higher premiums based on your health history. That guaranteed access only exists during your Medigap Open Enrollment Period, which runs for six months starting when you're both 65 and enrolled in Part B.
What to do instead: Make this decision carefully the first time. A State Health Insurance Assistance Program (SHIP) counselor can walk you through both options at no cost and without any sales pressure.
5. Choosing a Plan Based Only on the Monthly Premium
A $0 premium plan looks attractive on paper. But focusing solely on the monthly cost is a common pitfall in Medicare. One that often leads to higher Medicare costs and total health care costs by year's end.
Every plan has a fuller cost picture: deductibles, copays, coinsurance, out-of-pocket maximums, and whether your specific doctors and prescriptions are covered. A low-premium Advantage plan might have a high deductible or exclude a medication you depend on. The only way to know is to compare plans side by side based on your actual health needs.
What to do instead: Use Medicare's Plan Finder tool to estimate your total annual out-of-pocket costs across plans, not just the premium line. Doing this carefully can help you save money throughout the year.
6. Ignoring Your Annual Notice of Change
Every fall, Medicare Advantage and Part D plan holders receive an Annual Notice of Change (ANOC). Most people set it aside without reading it, and that's a costly habit. Many assume automatic renewal means their coverage stays the same. It doesn't.
Your plan can adjust its premiums, drug formulary, cost-sharing amounts, and provider network each year. A specialist you count on could leave the network. A medication that was covered at a low tier last year could be moved to a higher tier or dropped entirely. Reading your ANOC when it arrives is the only way to know whether your current plan still fits your needs before you're locked in for another year.
If changes affect your care or budget, the Annual Enrollment Period (October 15–December 7) is your window to switch. New coverage takes effect January 1.
What to do instead: Put the ANOC review on your calendar every October. Even 30 minutes comparing your current plan against available alternatives can prevent a year of unnecessary costs.
7. Not Appealing an IRMAA Surcharge After a Major Life Change
High-income Medicare beneficiaries pay an income-related monthly adjustment amount (IRMAA) in addition to their standard premiums. This applies to both Part B and Part D. According to the Social Security Administration, for 2026, single filers with a modified adjusted gross income above $109,000 pay higher Medicare premiums. The surcharge ranges from an additional $74 to $443.90 per month for Part B, depending on income level.
The detail most people overlook: SSA determines your IRMAA using the most recent tax return the IRS provides, generally your 2024 tax return for 2026 premiums. If your income has dropped significantly since then due to retirement, divorce, the death of a spouse, or reduced work hours, you could be overpaying. You have the right to ask SSA to use more current information.
What to do instead: If your income dropped because of a qualifying life event, contact the Social Security Administration and request a recalculation using your more recent income. You'll complete Form SSA-44 and submit documentation of the event, such as a retirement confirmation letter or proof of reduced earnings.
What Should You Verify Before Choosing a Medicare Plan?
Even after understanding the major pitfalls, small oversights at the selection stage can still cost you. The mistakes when choosing a Medicare plan often come down to skipping these verification steps before you finalize your enrollment. Taking time to review these helps you make informed decisions about your health coverage:
- Confirm your doctors are in-network. Provider networks shift year to year. Call your doctors' offices directly to confirm they're in your plan's network, and don't rely on the insurer's online directory alone.
- Check that your prescriptions are covered. Review the plan's formulary for your specific medications and their cost tier. The same drug can carry very different out-of-pocket costs depending on the plan.
- Make sure your preferred hospitals participate. This matters most for Medicare Advantage plans, which typically restrict coverage to in-network facilities for non-emergency care.
- Don't let extra perks drive the decision. Dental, vision, and fitness benefits can add real value, but only if the core medical and drug coverage meets your needs first.
Don't Navigate Medicare Alone. Get a Coach in Your Corner
Medicare decisions are too important to leave to guesswork. At JBL Financial Services, our dedicated Medicare Coach works alongside you to compare your options and help you avoid the costly missteps outlined above. Medicare is a critical part of retirement planning, and we've been helping people in and around Saint Louis navigate it since 1979. We believe everyone deserves a clear, personalized game plan. No minimum investment required.
Whether you're approaching 65, already enrolled, or not sure if your current plan still makes sense, we're here to coach you through it.
If ready to start planning, schedule a call with our team today.