Key Takeaways

• Medicare has unexpected costs and rules that can catch new enrollees off guard, from deductibles and coinsurance to late enrollment penalties.

• Coverage gaps, provider networks, and prior authorization requirements can create surprises that impact your healthcare experience and budget.

The Medicare Learning Curve: What You Didn’t Expect

Signing up for Medicare is a major milestone, but many first-time enrollees quickly realize there’s more to it than they initially thought. While it provides essential healthcare coverage, Medicare comes with unexpected costs, rules, and limitations that can lead to surprises. Here’s what you need to know so you can avoid common pitfalls and get the most out of your benefits.

Medicare Isn’t Entirely Free—Here’s What You’ll Pay

One of the first shocks for many new beneficiaries is realizing that Medicare isn’t free. Although you’ve likely paid into the system through payroll taxes for years, Medicare still has premiums, deductibles, copayments, and coinsurance.

Monthly Premiums Aren’t Always Avoidable

• Medicare Part A: If you worked and paid Medicare taxes for at least 10 years, you won’t pay a premium for Part A. Otherwise, you could owe a substantial monthly fee.

• Medicare Part B: This medical coverage has a standard monthly premium, which can be higher if your income is above a certain threshold.

• Medicare Part D: Prescription drug coverage requires a separate monthly premium, which varies by plan.

Deductibles, Copays, and Coinsurance Add Up

Even with Medicare, you still have out-of-pocket costs. In 2025, the Medicare Part A deductible for hospital stays is $1,676 per benefit period. Medicare Part B has an annual deductible of $257, after which you typically pay 20% of covered services. Prescription drug plans also have a deductible and cost-sharing requirements, which vary depending on your plan and medication needs.

The Late Enrollment Penalty Can Follow You for Life

If you delay enrolling in Medicare past your Initial Enrollment Period (IEP) without qualifying for a Special Enrollment Period, you could face lifelong penalties.

• Part B Late Enrollment Penalty: If you don’t sign up for Part B when you’re first eligible and don’t have other qualifying coverage, you’ll pay a 10% penalty for each full year you were without coverage. This extra cost lasts as long as you have Medicare.

• Part D Late Enrollment Penalty: Missing your initial chance to enroll in Part D could result in a penalty that permanently increases your monthly premium.

To avoid these penalties, it’s important to sign up during your IEP or ensure you have other creditable coverage.

Medicare Doesn’t Cover Everything

Many people assume Medicare covers all medical expenses, but there are notable exclusions that could leave you paying out-of-pocket.

No Coverage for Routine Dental, Vision, or Hearing Care

Original Medicare does not cover:

• Dental exams, cleanings, or dentures

• Routine eye exams, glasses, or contact lenses

• Hearing exams or hearing aids

Limited Coverage for Long-Term Care

Medicare does not pay for most long-term care services, such as assisted living or nursing home stays beyond a short period for skilled care. If you need ongoing support, you’ll have to pay out-of-pocket or explore other options.

International Travel Isn’t Covered

Medicare generally does not cover healthcare services outside the U.S., except in very limited situations. If you travel frequently, you may need to look into additional coverage.

Not All Doctors Accept Medicare

Just because a provider takes Medicare doesn’t mean they’ll accept your plan. Doctors fall into three categories:

• Participating Providers: Accept Medicare and its payment rates.

• Non-Participating Providers: Accept Medicare but can charge up to 15% more than Medicare’s approved rate.

• Opt-Out Providers: Do not accept Medicare at all. If you see one, you’ll pay the full cost of services out-of-pocket.

Before scheduling an appointment, check whether your provider accepts Medicare and at what level.

Prior Authorizations Can Delay Treatment

Certain Medicare-covered services, including some medical procedures and medications, may require prior authorization. This means your provider must get approval from Medicare before moving forward with treatment. If authorization is denied or delayed, you could face unexpected healthcare disruptions.

The Coverage Gap in Prescription Drugs Still Exists

In 2025, Medicare eliminates the Part D coverage gap, meaning you won’t face a higher cost for drugs in the middle of the year. However, prescription costs can still fluctuate based on formularies, tiers, and annual plan changes. Reviewing your drug plan each year is essential to avoid surprises.

Open Enrollment Isn’t a Free-for-All

Each year, Medicare Open Enrollment runs from October 15 to December 7. However, not all changes can be made during this time. For example:

• You can switch between Original Medicare and a Medicare Advantage plan.

• You can change or enroll in a Part D prescription drug plan.

• You cannot enroll in Medicare for the first time unless you qualify for a Special Enrollment Period.

Understanding these rules will help you make the most of your enrollment opportunities.

Medicare Supplement Plans Have Limited Enrollment Windows

If you want a Medicare Supplement (Medigap) plan, your best time to enroll is during the six-month Medigap Open Enrollment Period that starts when you’re first eligible for Medicare Part B. After this period, you could face medical underwriting, meaning you might be denied coverage or charged higher rates based on health conditions.

Your Plan and Costs Can Change Each Year

Medicare plans are not set in stone. Each year, Medicare Advantage and Part D plans can change:

• Premiums, deductibles, and copayments

• Covered medications and drug formularies

• Provider networks and plan benefits

This is why reviewing your Annual Notice of Change (ANOC) letter each fall is crucial to avoid unexpected cost increases or coverage gaps.

Getting the Most Out of Your Medicare Coverage

Now that you know what surprises to watch out for, here’s how to stay ahead:

• Review your plan annually to ensure it still meets your needs.

• Check provider networks before seeing a new doctor.

• Understand your out-of-pocket costs to budget effectively.

• Enroll on time to avoid late penalties.

• Read notices from Medicare to stay informed about coverage changes.

By being proactive, you can avoid the most common Medicare pitfalls and make the most of your benefits.