Medicare Enrollment Mistakes: 7 Costly Errors That Can Follow You for Life

Medicare enrollment mistakes can cost you thousands of dollars over your lifetime, and most of them are completely preventable. Every year, thousands of Americans face permanent penalties, coverage gaps, and surprise bills because they didn't understand Medicare's complex enrollment rules.

The problem? Medicare doesn't give you a second chance. Miss a deadline or make a wrong assumption, and you could pay the price every month for the rest of your life. This guide covers the seven most expensive Medicare enrollment mistakes and exactly how to avoid them.

Mistake #1: Missing Your Initial Enrollment Period

Your Initial Enrollment Period (IEP) is a 7-month window centered around your 65th birthday. It's your first and best opportunity to enroll in Medicare without penalties or restrictions.

When Is Your IEP?

Your Initial Enrollment Period includes:

• 3 months before your 65th birthday month
• Your birthday month
• 3 months after your 65th birthday month

What Happens If You Miss It?

If you don't enroll during your IEP and don't have qualifying coverage (like employer insurance), you'll face two consequences:

• Coverage gap: You can't enroll until the General Enrollment Period (January 1 - March 31), and coverage won't start until July 1
• Late enrollment penalty: Your Part B premium increases 10% for each 12-month period you could have had coverage but didn't

Mistake #2: Assuming Employer Coverage Always Protects You

Many people think they can simply delay Medicare because they have employer health insurance. This is one of the most dangerous assumptions in Medicare planning.

The 20-Employee Rule

Whether you can delay Medicare depends on your employer's size:

The Small Employer Trap

If you work for a company with fewer than 20 employees and don't enroll in Medicare at 65, you could face:

• Unpaid medical claims (your employer plan expects Medicare to pay first)
• Late enrollment penalties when you do enroll
• A coverage gap while you wait for the next enrollment period

Mistake #3: Skipping Part B Because You're Healthy

"I'm healthy. I don't need insurance." This reasoning has led to some of the most expensive Medicare mistakes. Health can change overnight, but Medicare penalties last forever.

The Math of Delaying

Let's say you're 65, healthy, and decide to skip Part B to save $185/month. Here's what happens if you delay for 5 years:

• Penalty: 10% per year x 5 years = 50% permanent increase
• Extra monthly cost: $92.50/month for life (at 2025 rates)
• Annual extra cost: $1,110/year
• 20-year total: $22,200 in extra premiums

And that's assuming premiums don't increase (they always do). The penalty percentage applies to whatever the premium is each year.

Mistake #4: Not Understanding Part D Creditable Coverage

Part D (prescription drug coverage) has its own set of enrollment rules and penalties. The key concept is "creditable coverage," meaning drug coverage that's at least as good as Medicare Part D.

The Part D Penalty

If you go 63 or more consecutive days without Part D or creditable drug coverage, you'll pay a late enrollment penalty when you do enroll:

• Penalty calculation: 1% of the national base premium ($34.70 in 2025) for each month you went without coverage
• Example: 24 months without coverage = 24% penalty = $8.33 extra per month, permanently

What Counts as Creditable Coverage?

• Employer drug coverage (if the employer says it's creditable)
• TRICARE
• VA health benefits
• Federal employee health benefits (FEHB)

Mistake #5: Choosing Medicare Advantage Without Understanding the Trade-offs

Medicare Advantage plans are heavily marketed and often have $0 premiums. But choosing one without understanding the restrictions can be a costly mistake, especially if your health situation changes.

What Many People Don't Realize

• Network restrictions: You may be limited to specific doctors and hospitals
• Prior authorization: The plan must approve many treatments before they're covered
• Out-of-pocket maximums: You could pay up to $8,850 per year (2025) before the plan pays 100%
• Difficult to leave: If you want to switch to Original Medicare + Medigap later, you may not be able to get a Medigap policy due to medical underwriting

The Medigap Problem

Your best chance to get a Medigap policy is during your 6-month Medigap Open Enrollment Period, which starts when you're 65 AND enrolled in Part B. If you choose Medicare Advantage at 65, that window closes.

Want to switch later? Unless you're within your first 12 months of Medicare Advantage, you'll face medical underwriting. Pre-existing conditions can result in denial or higher premiums. For more details, see our guide on switching from Medicare Advantage to Medigap.

Mistake #6: Not Reviewing Your Coverage Every Year

Medicare isn't "set it and forget it." Plans change every year, and failing to review your coverage annually can cost you hundreds or thousands of dollars.

What Changes Each Year

• Premiums: Your plan's monthly cost can increase significantly
• Formularies: Your medications may move to a higher cost tier or be dropped entirely
• Networks: Your doctors may leave your plan's network
• Benefits: Extra benefits like dental or vision may change
• Star ratings: Plan quality can decline, affecting benefits and costs

Annual Enrollment Period

Each year from October 15 - December 7, you can:

• Switch Medicare Advantage plans
• Switch from Medicare Advantage to Original Medicare
• Join or switch Part D plans
• Add or drop Medicare Advantage or Part D coverage

Mistake #7: Waiting Until the Last Minute

Procrastinating on Medicare enrollment can lead to processing delays, confusion, and costly mistakes. The best time to start planning is 3-6 months before you turn 65.

Why Early Planning Matters

• Processing times: Social Security can take several weeks to process your enrollment
• Coverage start dates vary: Enroll in the first 3 months of your IEP for coverage starting on your birthday month. Wait until the last 3 months and coverage may not start until 1-3 months later
• Coordination issues: If you have employer coverage, coordinating the transition takes time
• Plan comparison: Comparing Medicare Advantage, Medigap, and Part D options properly takes research

When Your Coverage Starts Based on Enrollment Timing

How to Avoid These Mistakes

Protecting yourself from Medicare enrollment mistakes comes down to preparation and understanding your specific situation. Here's your action plan:

1. Mark your calendar: Set reminders for 6 months and 3 months before your 65th birthday to start the enrollment process
2. Verify your employer situation: If you're still working, confirm your employer has 20+ employees and get documentation that your coverage is primary
3. Check for creditable drug coverage: Request a creditable coverage letter from your employer or current plan and save it
4. Understand your options: Learn the differences between Original Medicare + Medigap vs. Medicare Advantage before choosing
5. Enroll early in your IEP: Don't wait until the last month. Enroll in the first 3 months for the earliest coverage start date
6. Review coverage annually: Set a calendar reminder for October to review your plans before the December 7 deadline
7. Get help if needed: Consider consulting a fee-only Medicare advisor who can review your situation without trying to sell you a plan