Personal Finance

Retirees Need to Stop Making These Common Medicare Mistakes

Maurie Backman

Published: February 25, 2025 2:27 pm

Once you turn 65, you’re generally eligible for health coverage through Medicare. And it’s for this reason that many older Americans opt to retire at 65.

But Medicare is a complex program that’s loaded with rules. And not knowing what they entail could cost you. With that in mind, here are a few Medicare mistakes retirees need to stop making.

1. Signing up late

It’s not a given that you’ll be enrolled in Medicare automatically once you turn 65. That’ll only happen if you’re collecting Social Security at the time. Otherwise, you need to actively sign up.

If you don’t sign up on time, you risk surcharges on your Part B premiums for life, though, making them that much more expensive. So unless you’re covered by a qualified group health insurance plan at the time, you should aim to sign up for Medicare during your initial enrollment period. That period spans seven months, starting three months before the month you turn 65 and ending three months after the month you turn 65.

2. Not revisiting their coverage options every year

Each year, Medicare holds its open enrollment period in the fall — specifically, between Oct. 15 and Dec. 7. During that time, you can do things such as switch from one Medicare Part D plan to another, switch from one Medicare Advantage plan to another, or drop Medicare Advantage completely in favor of original Medicare.

It’s important to review your plan choices carefully each year. If there’s a better plan out there for you that you don’t know about, you could be losing money by virtue of sticking to the plan you have.

3. Not paying attention to Medicare Advantage networks

There are certain benefits to enrolling in a Medicare Advantage plan over original Medicare. Medicare Advantage commonly pays for services original Medicare won’t, like dental care, eye exams, and hearing aids.

Another nice thing about Medicare Advantage plans is that they generally cap your out-of-pocket spending. That could make it easier to budget for healthcare costs.

But one drawback of Medicare Advantage is that these plans typically limit you to a specific network of providers. And going outside of that network could mean facing costly out-of-pocket expenses.

So before you receive coverage under Medicare Advantage, check your plan’s network. This is an especially important thing to do if you’re new to Medicare Advantage and aren’t familiar with your network yet.

4. Assuming there won’t be copays or deductibles on Medicare

Although Medicare covers a host of services, there’s a cost-sharing element you need to familiarize yourself with. It’s common to have a copay for prescription medications, the amount of which will depend on the drugs you take and your specific Part D drug plan.

There are also deductibles associated with Medicare Part B, as well as coinsurance. It’s often the case that services covered by Part B are paid for at 80%, leaving you to cover the remaining 20%. And Medicare Part A has an inpatient deductible you’re responsible for each time you’re admitted to the hospital, as well as a daily coinsurance rate beyond a certain point.

It’s important to know what costs you might face under Medicare so you can work them into your retirement budget. But there’s also a way to offset some of those costs, which leads to our final point.

5. Not buying supplemental insurance

If you’re enrolling in a Medicare Advantage plan, you won’t be eligible for Medigap, or supplemental insurance. But if you’re sticking with original Medicare, then it makes sense to purchase Medigap coverage, as it could potentially pick up some of the costs you incur for deductibles and copays.

That said, Medigap won’t cover services Medicare won’t. You can’t use Medigap, for example, to pay for a dental cleaning since Medicare itself won’t cover that.

The best time to sign up for Medigap is when you’re first eligible. If you wait too long, you risk being denied coverage or having to pay more to get it.