Key Takeaways

• Medicare is not a one-size-fits-all program. Many beneficiaries face costly surprises because they misinterpret what it covers or fail to understand enrollment rules.

• Understanding enrollment periods, coverage limitations, and coordination with other insurance is essential to avoid long-term financial setbacks.

Medicare Looks Simple—Until It Isn’t

Medicare may appear straightforward when you first hear about it: enroll at 65, choose a plan, and enjoy healthcare coverage in retirement. But if you think it ends there, you’re at risk of making avoidable errors that could cost you financially, medically, or both.

In 2025, Medicare continues to operate as a layered and time-sensitive system. It’s divided into multiple parts—each with its own purpose, cost structure, and eligibility requirements. If you overlook or misunderstand any piece, it can lead to denied claims, coverage gaps, or penalty fees.

Let’s take a closer look at the most common Medicare mistakes people make—and how you can avoid them.

1. Missing the Initial Enrollment Period (IEP)

If you’re approaching your 65th birthday, the seven-month Initial Enrollment Period is critical. This window includes:

• Three months before your birthday month

• Your birthday month

• Three months after your birthday month

Failing to enroll in Medicare Part B or Part D during this time, if you don’t have other creditable coverage, may lead to late penalties. These penalties are permanent and increase the longer you delay.

Even if you aren’t collecting Social Security, you must proactively enroll in Medicare unless you have qualifying coverage elsewhere.

2. Assuming All Healthcare Needs Are Covered

Medicare Parts A and B—known as Original Medicare—don’t cover everything. These parts exclude:

• Most dental, vision, and hearing services

• Long-term custodial care

• Routine foot care

• Prescription drugs (Part D is separate)

If you mistakenly think Medicare covers all your healthcare costs, you might be caught off guard when major services are denied. Supplemental coverage or a standalone prescription plan can help fill these gaps, but only if chosen correctly and on time.

3. Not Understanding the Difference Between Part A and Part B

Many beneficiaries mix up what each part does:

• Part A: Covers hospital stays, skilled nursing facilities, hospice, and some home health care. Most people don’t pay a premium if they or a spouse worked 40 quarters.

• Part B: Covers doctor visits, outpatient services, durable medical equipment, and preventive care. This part requires a monthly premium.

Skipping Part B because you think it’s unnecessary could mean higher out-of-pocket costs later and late enrollment penalties unless you have other qualifying insurance.

4. Ignoring the Annual Enrollment Period

From October 15 to December 7, Medicare offers an Annual Enrollment Period (AEP). This window allows you to:

• Switch between Original Medicare and Medicare Advantage

• Change Medicare Advantage plans

• Add or change a Part D plan

Some people stick with their existing plan each year without reviewing changes. But plans update their premiums, deductibles, and benefits annually. Ignoring this period could leave you with a plan that no longer fits your medical or financial needs.

5. Thinking Medicare Advantage Is Always More Comprehensive

Medicare Advantage (Part C) often includes extras like dental or gym memberships. However, it operates under a network system and may have:

• Restricted provider access

• Higher costs for out-of-network or out-of-state care

• Prior authorization requirements

While some people benefit from these plans, they’re not always more comprehensive than Original Medicare paired with a Medigap and Part D plan. It depends on how, when, and where you need care.

6. Forgetting to Check Drug Coverage Annually

Prescription drug plans (Part D) change formularies, pharmacy networks, and costs every year. If your medications aren’t covered the next year—or move to a higher tier—you may face steep out-of-pocket expenses.

Each year during the AEP, you should verify:

• Your medications are still covered

• Your preferred pharmacy is in-network

• Your total out-of-pocket costs fit your budget

Failing to reassess this coverage could cost you more than expected.

7. Not Signing Up for Part B When You Should

If you delay Part B enrollment without having creditable coverage—like from a current employer—you’ll face a 10% penalty for each full 12-month period you were eligible but didn’t enroll. This penalty is permanent.

Some people who are still working at 65 assume they can delay Part B safely. That’s only true if the employer has at least 20 employees and the group plan qualifies as creditable.

8. Assuming Spousal Coverage Works Like Employer Plans

Medicare is individual coverage. There is no “family plan.” If you’re 65 but your spouse isn’t, you cannot keep employer coverage and wait for your spouse to turn 65 before you enroll in Medicare.

Each spouse must qualify and enroll separately. This mistake often results in one spouse losing coverage unexpectedly.

9. Misjudging the True Cost of Care

Medicare involves deductibles, copayments, coinsurance, and premiums. For example:

• In 2025, the Part A deductible is $1,676 per benefit period

• The Part B premium is $185 monthly, with a $257 annual deductible

• Part D plans may have a $590 deductible and costs vary by formulary and tier

Many people mistakenly believe that once they enroll, most costs vanish. The truth is, you still need to budget for significant healthcare spending in retirement.

10. Failing to Coordinate Medicare With Other Insurance

If you have retiree coverage, VA benefits, or COBRA, Medicare may become the primary payer once you’re eligible. Failing to enroll in Medicare when it becomes primary could result in denied claims.

You need to understand which payer is primary and when the switch occurs. For example:

• COBRA is never creditable coverage for delaying Part B

• Retiree plans often require you to enroll in both Part A and B

Without this coordination, your secondary insurance may refuse to pay.

11. Enrolling in a Plan Based on Extras Alone

It’s easy to be swayed by benefits like dental cleanings or fitness perks, but those should never be your sole reason for choosing a plan. What matters most are:

• Coverage for your specific doctors and hospitals

• Predictable out-of-pocket costs

• Coverage for the medications you actually take

Extras are nice, but not if they come at the expense of essential care or network flexibility.

12. Believing You Can’t Change Plans Later

Many think their first choice is locked in forever. In reality, you can make changes:

• During AEP (October 15–December 7)

• If you qualify for a Special Enrollment Period (SEP)

• If you enroll in a Medicare Advantage plan for the first time and change your mind within the first 12 months (called the trial right)

Reviewing your needs annually ensures your plan still fits. Medicare is flexible—but only if you know when to act.

Don’t Let Mistakes Define Your Retirement Healthcare

Medicare is not meant to be guessed at—it’s meant to be planned for. If you approach it with the assumption that it’s simple, you’re likely to overlook important details that could affect your health, your wallet, or both.

Now that you know the most common errors, you’re in a stronger position to protect yourself. But even the most informed people can still benefit from expert insight. If you’re unsure about which options work best for your situation, speak with a licensed agent listed on this website who can guide you based on your personal needs.