Seven Costly Medicare Enrollment Mistakes
Most Medicare penalties are permanent and entirely avoidable. These are the seven errors that generate the most expensive, hardest-to-undo consequences.
1. Assuming enrollment is automatic
If you already receive Social Security benefits, you are usually enrolled in Parts A and B automatically. If you are not yet claiming Social Security, you generally must enroll yourself.
Many people delay claiming Social Security to increase their benefit, then assume Medicare will arrive on its own. It does not.
2. Relying on COBRA to delay Part B
Active employer coverage can let you delay Part B without penalty. COBRA generally cannot. People who take COBRA after leaving a job and skip Part B often end up with both a coverage gap and a permanent penalty.
3. Skipping Part D because you take no medications
The Part D late-enrollment penalty is calculated per month of delay and lasts as long as you have Part D. Going without creditable drug coverage for 63 days or more starts that clock.
A minimal Part D plan costs far less than decades of penalty.
4. Missing the Medigap open enrollment window
Your six-month Medigap Open Enrollment Period begins when your Part B starts. During it, carriers must sell you any plan they offer at their best rate regardless of health.
Afterwards, most states permit medical underwriting. This is the single most consequential deadline in Medicare, and it is easy to sleep through.
5. Choosing a plan on premium alone
A $0-premium Medicare Advantage plan with the wrong formulary can cost thousands more per year than a plan with a modest premium. Compare total expected annual cost using your real medications and your real doctors.
6. Not re-checking coverage each year
Formularies, networks, premiums and copays all change annually. Your Annual Notice of Change arrives each September for a reason. A plan that was ideal last year may be a poor fit now.
7. Forgetting about IRMAA
Higher-income beneficiaries pay an Income-Related Monthly Adjustment Amount on top of standard Part B and Part D premiums, based on tax returns from two years prior.
If your income dropped because of retirement, a work stoppage, or the loss of a spouse, you can request a reconsideration using Form SSA-44. Many people simply pay the surcharge without knowing this exists.
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