Medicare is not designed to be confusing. But with multiple parts, overlapping enrollment periods, annual plan changes, and rules that vary by state and county, mistakes happen. And unlike most mistakes, Medicare errors tend to come with financial consequences that do not go away.
Some of these mistakes cost hundreds of dollars. Others cost thousands — every year, for the rest of your coverage. The common thread is that nearly all of them are preventable.
Here are the Medicare mistakes we see most often, what they actually cost, and how to avoid them.
Mistake 1: Missing the Initial Enrollment Period
Your Initial Enrollment Period (IEP) is the seven-month window around your 65th birthday when you can enroll in Medicare Parts A and B without penalty. It starts three months before your birthday month and ends three months after.
What it costs: If you miss your IEP and do not qualify for a Special Enrollment Period, you may face a Part B late-enrollment penalty of 10% added to your monthly premium for every full 12-month period you could have had Part B but did not. This penalty is permanent — it applies for as long as you have Part B.
At current Part B premium levels, a two-year delay could add roughly $35 or more to your monthly premium for life. Over 20 years of coverage, that is over $8,000 in penalties alone.
How to avoid it: Mark your IEP start date on your calendar at least four to five months before your 65th birthday. If you are still working and have employer coverage, confirm whether you qualify for a Special Enrollment Period before assuming you can delay. Our turning 65 guide walks through the timeline step by step.
For the official enrollment rules, visit Medicare.gov.
Mistake 2: Assuming COBRA or Retiree Coverage Counts
This is one of the most expensive misunderstandings in Medicare. When people leave a job, they often continue their health coverage through COBRA or a retiree plan, assuming it protects them from Medicare penalties.
The reality: COBRA coverage and retiree health plans are generally not considered current employer coverage for Medicare purposes. They do not qualify you for a Special Enrollment Period, and they do not protect you from the Part B late-enrollment penalty.
What it costs: The same Part B penalty described above — 10% per year of delay, permanently. If you delayed Part B for three years because you thought COBRA had you covered, that is a 30% surcharge on your Part B premium for life.
How to avoid it: Before declining or delaying Part B, verify with a licensed advisor whether your specific coverage qualifies as "coverage based on current employment." Do not rely on assumptions or advice from your former employer's HR department, which may not understand Medicare coordination rules.
Mistake 3: Not Reviewing Your Plan Every Year
Medicare plans change annually. Formularies shift, networks adjust, premiums move, and extra benefits come and go. Your plan is required to send you an Annual Notice of Change (ANOC) by September 30 each year, detailing what is different for the following year.
What it costs: A medication that moves from Tier 1 to Tier 3 could increase your cost from $5 per month to $45 per month — that is $480 more per year for a single drug. Multiply that across three or four medications, and the cost of inaction adds up fast.
How to avoid it: Read your ANOC every fall. Compare your current plan against alternatives during the Annual Election Period (October 15 through December 7). A licensed advisor can run a side-by-side comparison using your specific medications and providers in about 30 minutes.
Mistake 4: Choosing a Plan Based Only on Premium
A $0 premium Medicare Advantage plan sounds appealing. But premium is only one component of your total healthcare costs. Copays, coinsurance, deductibles, and drug costs can vary dramatically between plans.
What it costs: A plan with a $0 premium but a $50 specialist copay and a $350 per-day hospital copay can result in thousands of dollars in out-of-pocket costs during a year with significant medical needs. Meanwhile, a plan with a $35 monthly premium might have $20 specialist copays and lower hospital costs.
How to avoid it: Compare total expected costs — premiums plus estimated out-of-pocket expenses based on your typical healthcare usage. Factor in your medications, how often you see specialists, and whether any procedures are planned or likely.
Mistake 5: Missing the Medigap Open Enrollment Window
Your Medigap Open Enrollment Period starts the month your Part B coverage begins and lasts six months. During this window, insurance companies must sell you any Medigap plan they offer, regardless of your health status, and cannot charge you more because of pre-existing conditions.
What it costs: Outside this window, insurance companies in most states (including some where Kingdom Health Group operates) can use medical underwriting. This means they can charge you a higher premium based on health conditions or deny you coverage entirely. A Medigap Plan G policy that might have cost $150 per month during open enrollment could cost $300 or more — or be unavailable — if you apply after the window closes with health issues.
How to avoid it: If you want a Medigap policy, enroll during your open enrollment window. Do not assume you can come back to it later without consequences. Florida does offer additional protections, including a birthday rule and continuous open enrollment rights, but the specifics vary. Talk to a licensed advisor about the rules in your state.
Mistake 6: Ignoring Part D Late-Enrollment Penalties
If you go 63 or more consecutive days without creditable prescription drug coverage after your Initial Enrollment Period, you may owe a Part D late-enrollment penalty.
What it costs: The penalty is calculated as 1% of the national base beneficiary premium multiplied by the number of months you went without coverage. This amount is added to your Part D premium for as long as you have Part D. A 12-month gap could add roughly $4 to $5 per month permanently. A five-year gap could add $20 or more per month — every month, for life.
How to avoid it: Enroll in Part D or a Medicare Advantage plan with drug coverage during your IEP. If you have creditable drug coverage through an employer, keep the documentation. When that coverage ends, enroll in Part D promptly during your Special Enrollment Period.
Mistake 7: Not Asking for Help
Perhaps the most costly mistake of all is trying to navigate Medicare alone when you do not have to. The system has complexity that is difficult to manage without experience, and the consequences of errors are financial and permanent.
Licensed Medicare advisors exist specifically to help people avoid these mistakes. There is typically no cost to the beneficiary for this help.
If you are in Florida, Texas, Pennsylvania, or Ohio, schedule a review with Kingdom Health Group. We do not offer every plan available in your area, but we can help you understand what may be available and make sure you are not paying more than you need to.
Our resources page has additional tools and guides to help you stay on top of your Medicare decisions.
Frequently Asked Questions
What is the most expensive Medicare mistake?
The Part B late-enrollment penalty is typically the most costly because it is permanent and percentage-based. A multi-year delay can add 20% to 30% or more to your monthly Part B premium for life, potentially costing tens of thousands of dollars over the course of your coverage.
Can Medicare penalties ever be waived?
In some cases, penalties can be reduced or avoided if you qualify for a Special Enrollment Period or if an error was made by Social Security or an employer. However, the burden of proof is on the beneficiary. Documentation is critical — keep records of all employer coverage, creditable drug coverage notices, and enrollment correspondence.
Is it too late to fix a Medicare mistake?
It depends on the mistake. Some errors, like choosing the wrong plan, can be corrected during the next Annual Election Period or during a Special Enrollment Period. Others, like late-enrollment penalties, are permanent once they take effect. The sooner you identify and address an issue, the better your options.
How do I know if my employer coverage is creditable?
Your employer is required to send you a notice each year indicating whether your drug coverage is creditable. If you did not receive this notice or are unsure, contact your employer's benefits administrator. Keep copies of all creditable coverage notices — you may need them to avoid Part D penalties.
Should I get help even if I think I understand Medicare?
Even knowledgeable beneficiaries benefit from a periodic review with a licensed advisor. Plans change annually, and an outside perspective can catch issues you might overlook — particularly formulary changes, network shifts, and new plan options that were not available when you last enrolled.