9 Mistakes People Make With Medicare and How to Avoid Them

The mistakes that cost you money happen before you enroll

Most Medicare mistakes fall into two categories: things you do wrong during enrollment that lock you into worse coverage for a year, and things you don't do that leave money on the table every month. The first category is harder to fix — Medicare has strict rules about when you can change plans, and missing a deadline can mean paying full price for prescriptions or going without coverage for months. The second category is simpler: you just have to know what exists.

The nine mistakes here are the ones that come up repeatedly in conversations with people who've been on Medicare for years. They're not about being careless. They're about the system being genuinely confusing, with different rules for different parts of coverage and different consequences for different mistakes.

Key Takeaways

• Waiting until after your 65th birthday to think about Medicare can cost you thousands in late enrollment penalties that stick around for life.
• Assuming Original Medicare covers everything, or assuming a Medicare Advantage plan covers everything, leaves you exposed to costs you didn't expect.
• Not comparing plans every year means you're probably paying more than you need to for the same coverage.
• Forgetting to tell Medicare about life changes — retirement, moving states, losing other insurance — can mess up your coverage or your subsidies.
• Choosing a plan based on the monthly premium alone ignores deductibles, copays, and out-of-pocket limits that determine your real cost.

Enrolling late and triggering permanent penalties

If you turn 65 and don't enroll in Medicare Part B (medical insurance) or Part D (prescription drug coverage) when you're first may be able to access, you pay a penalty for every month you delay. That penalty is permanent — it stays on your bill for the rest of your life, even after you finally enroll.

Your initial enrollment period is seven months long: three months before the month you turn 65, the month you turn 65, and three months after. If you miss it and you don't have other may have access to coverage (like employer insurance), the penalty for Part B is roughly 10 percent of the standard premium for each year you were late. For Part D, it's about 1 percent of the national average premium per month late. These add up fast.

The exception is if you're still working and covered by your employer's health plan. You can delay without penalty, but you have to tell Medicare that you have that coverage. When you do retire and lose that coverage, you have eight months to enroll in Part B and Part D without penalty. After that window closes, the penalties kick in.

Confusing Original Medicare with full coverage

Original Medicare (Part A and Part B) covers hospital stays, doctor visits, and some preventive care. It does not cover dental, vision, hearing aids, or long-term care. It also has gaps: you pay a deductible before coverage starts, you pay coinsurance (a percentage of the cost) after that, and there's no annual out-of-pocket limit. You can end up paying thousands in a single year if you have a major health event.

Many people assume that because they have Medicare, they have full coverage. Then they get a bill for something they thought was covered, or they realize they need dental work and Medicare won't pay for it. The gaps are real and they're expensive.

This is why most people on Original Medicare also buy a Medigap policy (supplemental insurance) to cover the gaps. Medigap is sold by private insurance companies, not by Medicare, and the cost varies by company and by which Medigap plan you choose. It's a separate monthly premium on top of your Medicare premium, but it protects you from the gaps in Original Medicare coverage.

Assuming Medicare Advantage covers everything

Medicare Advantage is an alternative to Original Medicare. It's run by private insurance companies, and it usually has a lower or zero monthly premium than Original Medicare plus Medigap. But it comes with trade-offs that people often don't realize until they need care.

Medicare Advantage plans typically have a network — you have to use doctors and hospitals in that network, or you pay more. They have copays and deductibles, sometimes higher than Original Medicare. They have out-of-pocket limits, which is good, but they also often require prior authorization before you can see a specialist or get certain procedures. If you travel or move, your network might not follow you.

The appeal is the lower premium and the fact that prescription drug coverage is usually built in. But if you have a chronic condition that requires specialists, or if you travel frequently, the restrictions can be frustrating and expensive. Read the plan's formulary (the list of covered drugs) and the provider network before you enroll, especially if you take multiple prescriptions or see specialists regularly.

Not comparing plans every year

Your coverage needs change, and so do the plans available to you. A plan that was perfect last year might have raised its premium, dropped your doctor from the network, or changed which drugs it covers. Medicare lets you change plans once a year during the annual enrollment period, which runs from October 15 to December 7.

If you don't compare, you stay in the same plan by default. That's convenient, but it often means you're paying more than you need to. Premiums, deductibles, copays, and drug formularies change every year. Spending an hour comparing plans during open enrollment can save you hundreds of dollars annually.

The easiest way to compare is on Medicare.gov. You can enter your current doctors and prescriptions, and the site will show you which plans cover them and what your costs would be. You can also call 1-800-MEDICARE and ask for a comparison, though the website is usually faster.

Choosing a plan based on premium alone

A plan with a $0 monthly premium sounds great until you realize the deductible is $500 and the copay for your regular doctor visit is $50. Another plan might have a $50 monthly premium but a $0 deductible and $15 copays. Over the course of a year, the second plan could cost you less, even with the higher premium.

To compare fairly, add up the monthly premium, the deductible, the copays you expect to pay based on your health, and any out-of-pocket costs for prescriptions. Then compare the total. This is tedious, but it's the only way to know which plan actually costs less for your situation.

If you're on a tight budget and can't afford a higher premium, that's a real constraint and you have to work with it. But if you have some flexibility, don't let the premium number alone drive your decision. The plan that looks cheapest on paper often isn't.

Forgetting to update Medicare when your life changes

When you retire, move to a different state, lose other insurance, or get married, you need to tell Medicare. These changes can affect which plans are available to you, whether you may have access to for subsidies, and whether your current plan is still the best option.

If you move to a different state, your Medicare Advantage network might not follow you. Your Medigap policy might not be valid in the new state. Your prescription drug plan might have a different formulary. You have 60 days after you move to make changes without penalty, but you have to report the move first.

If you retire and lose employer insurance, you have eight months to enroll in Part B and Part D without penalty. If you miss that window, the penalties are permanent. Tell Medicare about the change as soon as it happens — you can do this on Medicare.gov, by phone at 1-800-MEDICARE, or in person at your local Social Security office.

Not checking your prescriptions against the plan's formulary

Every Medicare prescription drug plan has a formulary — a list of drugs it covers and how much you pay for each one. The formulary changes every year. A drug that was on your plan's formulary last year might not be this year, or it might have moved to a higher tier with a higher copay.

If your plan stops covering a drug you take, you have options: you can switch to a different plan during open enrollment, you can ask your doctor to prescribe a different drug that the plan does cover, or you can ask the plan for an exception. But you have to know about the change first. Check your plan's formulary before you enroll, and check it again every year during open enrollment.

If you take multiple prescriptions, this can take time. But it's worth it. A drug that costs $10 a month on one plan might cost $50 a month on another, or it might not be covered at all. The formulary is where those differences show up.

Missing the deadline to report income changes

If your income changes significantly — you retire, you start receiving Social Security, you get a pension — you might may have access to for a subsidy that lowers your Medicare premiums. But you have to report the change to Social Security or Medicare, and there are deadlines.

If your income drops, you might may have access to for Extra Help (a program that lowers prescription drug costs) or for Medicaid (which can cover some of your Medicare costs). These programs have income limits that vary by state. If your income changes, report it right away. You can do this on Medicare.gov, by calling Social Security at 1-800-772-1213, or by visiting your local Social Security office.

If you don't report a change and you were receiving a subsidy you weren't may have access to to, you might have to pay it back. If you don't report a change and you may have access to for a subsidy you're not getting, you're just leaving money on the table. Either way, reporting changes promptly protects you.

Skipping preventive care because you think it's not covered

Medicare Part B covers many preventive services at no cost to you: annual wellness visits, cancer screenings, cardiovascular screenings, diabetes screenings, and vaccines. You don't pay a copay or coinsurance for these services if you go to a doctor who accepts Medicare and you haven't met your deductible yet (and for many preventive services, the deductible doesn't apply).

Some people skip these visits because they think Medicare doesn't cover them, or because they're not sure. That's a mistake. These visits can catch problems early, when they're cheaper and easier to treat. If you're on Original Medicare, ask your doctor whether a visit is covered as preventive care before you go. If you're on Medicare Advantage, check your plan's materials or call the plan to confirm.

Not understanding the difference between in-network and out-of-network costs

If you're on Medicare Advantage, the difference between using an in-network provider and an out-of-network provider can be huge. In-network, you might pay a $20 copay. Out-of-network, you might pay 40 percent of the cost, with no limit on what you end up owing.

Before you schedule an appointment or a procedure, confirm that the provider is in your plan's network. If you need emergency care, you can't always choose, but for routine care and scheduled procedures, you can. If your regular doctor is out-of-network, it might be worth switching to an in-network doctor to avoid the higher costs.

If you're on Original Medicare with a Medigap policy, this is less of an issue — Medigap covers the gaps regardless of whether the provider is in a network. But if you're on Medicare Advantage, the network matters a lot.

Frequently Asked Questions

What happens if I miss the Medicare enrollment deadline?

You can still enroll, but you'll pay a permanent penalty on your Part B or Part D premium for every month you were late. The only exception is if you had other may have access to coverage (like employer insurance) when you turned 65. If you did, you have eight months after that coverage ends to enroll without penalty.

Can I change Medicare plans if I realize I made a mistake?

You can change plans during the annual enrollment period (October 15 to December 7) without penalty. If you made a mistake and it's outside that window, you might may have access to for a Special Enrollment Period, which allows changes outside the normal window. Call 1-800-MEDICARE to ask whether you may have access to.

Do I need both Original Medicare and a Medigap policy?

You don't need both, but most people on Original Medicare buy a Medigap policy to cover the gaps (deductibles, coinsurance, copays). The alternative is Medicare Advantage, which is a different type of coverage altogether. You can't have both Original Medicare and Medicare Advantage at the same time.

What should I do if my prescription drug plan stops covering a medication I take?

First, ask your doctor whether there's a similar drug on your plan's formulary that you could take instead. If not, you can ask your plan for an exception (sometimes called a formulary exception), or you can switch to a different plan during open enrollment. You can also call 1-800-MEDICARE for help navigating your options.

How do I know if I may have access to for Extra Help or Medicaid?

Income and asset limits vary by state. You can check your state's limits on Medicare.gov or by calling 1-800-MEDICARE. You can also apply for Extra Help through Social Security (1-800-772-1213) or for Medicaid through your state's Medicaid office. Both programs can significantly lower your costs if you may have access to.