Reaching Medicare age can feel like crossing a finish line. After years of dealing with job-based insurance or expensive private plans, it’s finally time for coverage you’ve earned.
But Medicare isn’t as simple as many expect—and making the wrong decisions early on can cost you a lot of money down the road.
We’ve seen it happen to smart, responsible people: retirees who thought they were covered, only to be hit with surprise bills or penalties. That’s why it’s so important to understand the most common Medicare mistakes—and how to avoid them.
This guide walks you through seven key missteps to watch for. It’s straightforward, easy to understand, and packed with helpful tips—even some you won’t hear everywhere else.
1. Missing Your Initial Enrollment Window
You have a seven-month window to sign up for Medicare around your 65th birthday: three months before, your birthday month, and three months after.
If you miss this window and don’t have other creditable coverage (like insurance from an employer with 20+ employees), you could face a late enrollment penalty. And here’s the frustrating part—these penalties aren’t one-time fees. They stay with you for life.
For example: if you delay signing up for Part B, your monthly premium may increase by 10% for every 12-month period you were eligible but didn’t enroll.
Smart move: If you’re still working at 65, talk to your employer’s benefits department. Ask whether your coverage is “creditable” under Medicare’s rules. Get it in writing, just in case.
2. Thinking Original Medicare Covers Everything
Original Medicare (Part A and Part B) does a good job covering hospital stays and medical services, but there are still gaps in coverage—particularly for outpatient care.
For instance, Medicare typically covers 80% of your outpatient costs. That means you’re on the hook for the remaining 20%—with no out-of-pocket maximum. If you need surgery or extended therapy, your share could easily run into the thousands.
Many people are surprised by just how much they’re expected to pay.
This is where Medigap (Medicare Supplement Insurance) comes in. These plans help cover the “gaps” in Medicare—like deductibles, copayments, and coinsurance.
One of the most popular Medigap options is Plan G. And when you weigh Plan G pros and cons, it becomes clear why so many retirees lean toward this plan. While the premiums might be higher than some Medicare Advantage plans, the predictable out-of-pocket costs and nationwide flexibility are hard to beat.
Pros of Plan G:
- After you meet the small annual Part B deductible, Plan G covers the rest of your Medicare-approved costs
- No networks or referrals—see any doctor who accepts Medicare
- No copays or coinsurance after the deductible is paid
- Coverage while traveling within the U.S., and some foreign travel emergency benefits
Cons of Plan G:
- Monthly premiums are higher than Medicare Advantage plans (though costs vary by ZIP code and age)
- Doesn’t cover prescription drugs—you’ll need to add a separate Part D plan
- Doesn’t include dental, vision, or hearing—these require additional coverage or savings
That said, Plan G is often the preferred choice for people who value stability and want to avoid surprise bills.
3. Skipping Prescription Drug Coverage (Part D)
Some people delay enrolling in a Part D prescription drug plan because they don’t currently take any medication. That seems reasonable—but it can backfire.
Medicare adds a late enrollment penalty to your Part D premium if you go more than 63 days without coverage after your initial enrollment period. Like other penalties, this one sticks with you for the long term.
Even a basic drug plan helps you avoid the penalty—and protects you in case your health needs change suddenly.
Helpful tip: Review drug plans yearly during Open Enrollment (Oct 15–Dec 7). Formularies (the list of covered medications) and premiums can change from year to year.
4. Confusing Medicare Advantage and Medigap
This is one of the biggest sources of confusion.
Medicare Advantage (Part C) plans combine hospital, medical, and often drug coverage into one plan. They’re usually more affordable up front but have networks, copays, and variable out-of-pocket costs.
Medigap, on the other hand, works alongside Original Medicare and helps cover what Medicare doesn’t. You pay a monthly premium, but your costs are far more predictable. Plan G is a good example of that stability.
Here’s a real-world scenario:
Frank and Carol both turned 65. Frank chose a zero-premium Medicare Advantage plan. Carol chose a Medigap Plan G. A year later, Frank needed a specialist who wasn’t in his plan’s network. He ended up paying nearly $6,000 out of pocket. Carol, on the other hand, had no surprise bills—her Plan G covered everything after the deductible.
Bottom line: Advantage plans may work well if you stay in-network and don’t need a lot of care. But for frequent travelers, those with chronic conditions, or people who simply want peace of mind, Medigap plans like Plan G may offer better protection.
5. Forgetting to Review Plans Every Year
Just because your plan worked well this year doesn’t mean it’ll work well next year. Insurance companies can change premiums, coverage, drug lists, and provider networks annually.
Each fall, Medicare’s Open Enrollment period (October 15–December 7) gives you a chance to review and change your plan. But many people skip it—and that can be a costly mistake.
Pro tip: Set a calendar reminder each October. Even if you don’t make a change, you’ll know you reviewed your options and stayed informed.
6. Assuming Retiree or VA Benefits Are Enough
If you’re a veteran or retiree, you may already have coverage through the VA or a former employer. That’s excellent—but it doesn’t always mean you’re fully covered.
For instance, VA services can be limited if you move or travel. And some retiree plans reduce benefits or drop drug coverage after you enroll in Medicare.
To avoid gaps, it’s wise to enroll in at least Part A, and consider supplementing with either a Part D plan or a Medigap/Advantage plan.
7. Underestimating Out-of-Pocket “Extras”
Even with good Medicare coverage, there are things it simply doesn’t cover: routine dental care, hearing aids, glasses, and long-term care. These costs can add up fast.
A few ways to prepare:
- Look into discount plans or standalone dental/vision policies
- Some Medicare Advantage plans offer limited dental/vision benefits—just check the fine print
- Set aside a medical “rainy day” fund—even $50/month can help cover unexpected expenses
Final Thoughts: Take Time to Choose What Works for You
Medicare isn’t one-size-fits-all. The best plan for your neighbor might not be the best plan for you.
Taking the time to understand your options can help you avoid unnecessary costs and stress in the years ahead. You’ll thank yourself later for being proactive now.
If you’re not sure where to start, talk to a licensed Medicare advisor or trusted insurance professional. The right support can make a world of difference.
Also Read: How Medical Bills Are Handled After a Car Accident in Phoenix
