11 Costly Medicare Mistakes You Should Avoid Making

1. Keeping your Medicare Part D plan on autopilot

Open enrollment for Medicare Part D and Medicare Advantage plans runs from October 15 to December 7 every year, and it's a good time to review all of your options. If you've been prescribed new medications or your drugs have gone generic over the past year, a different plan may now be a better deal for you.

The cost and coverage can vary a lot from year to year — some plans boost premiums more than others, increase your share of the cost of your drugs, add new hurdles before covering your medications, or require you to go to certain pharmacies to get the best rates. 

Go to the Medicare Plan Finder to compare all of the plans available in your area during open enrollment. Type in your medications and dosages to see how much you'd pay for premiums plus co-payments for plans in your area.

2. Buying the same Medicare Part D plan as your spouse

There are no spousal discounts for Medicare Part D prescription drug plans, and most spouses don't take the same medications. One plan may have much better coverage for your drugs while another may be better for your spouse's needs.

You should each look up your drugs and dosages using the Medicare Plan Finder to estimate out-of-pocket costs for the plans in your area. 

Just be careful if you and your spouse sign up for plans with different preferred pharmacies. Some plans only give you the best rates if you use their network. Consider if you are willing to go to more than one pharmacy to fill your monthly prescriptions. You could end up paying a lot more if you get your drugs somewhere else.

3. Going out-of-network in your Medicare Advantage plan

If you choose to get your coverage through a private Medicare Advantage plan, you usually need to use the plan's network of doctors, hospitals and pharmacies to get the most coverage at the lowest price. 

Some plans only provide out-of-network coverage in an emergency. As with any PPO or HMO, it's important to make sure your doctors, hospitals and other health care providers are covered in your plan from year to year.

If your preferred health care provider is outside of your network, it may be time to change plans or return to original Medicare. 

You can switch Medicare Advantage plans  each year between January 1st through March 31st each year, during the Medicare Advantage open enrollment period. This is in addition to the open enrollment period that runs from October 15th to December 7th. 

The Medicare Plan Finder can assist you by comparing copayments, out-of-pocket costs and coinsurance for the plans available in your area. After you've narrowed your list, contact both the insurer and your doctor to make sure they'll be included in the plan's network for the coming year.

4. Not switching Medicare Advantage plans mid year if needed

Medicare Advantage participants have two opportunities to switch MA plans or go back to original Medicare. You’ll also be able to join a separate Medicare Part D drug plan if you return to original Medicare. Your first chance to change your coverage is during the open enrollment period that runs each year from October 15 to December 7. The second opportunity is during the Medicare Advantage open enrollment period, which is held every year from January 1 to March 31. 

There are also limited circumstances when you can change your coverage outside an of open enrollment period. Certain life changes, such as moving to an address outside of plan's service area can trigger a Special Enrollment Period. And if you have a Medicare Advantage plan in your area with a five-star quality rating, you can switch into that plan anytime during the year. The Medicare Plan Finder can help you search for five-star plans in your area.

5. Not picking the right Medigap plan

If you buy a Medicare supplement plan within six months of enrolling in Medicare Part B, you can get any plan in your area, even if you have a preexisting medical condition. But if you try to switch plans after that, insurers in most states can reject you or charge more because of your health. It's important to pick your plan carefully.

Some states let you switch into certain plans regardless of your health, and some insurers let you switch to another one of their plans without a new medical exam. Find out about your state's rules and the plans available at your state insurance department website. You can also find more information about Medigap policies in your area at Medicare.gov.

6. Forgetting that you can sign up for Medicare at 65

If you're already receiving Social Security benefits, you'll automatically be enrolled in Medicare Part A and Part B when you turn 65. But if you aren't receiving Social Security benefits, you'll need to take action to sign up for Medicare. 

Although you can turn down Part B coverage and sign up for it later, you can't disenroll from Medicare Part A. As most people receive it premium-free, it can serve as secondary hospital insurance. 

If you're at least 64 years and 9 months old, you can sign up online. You have a seven-month window to sign up — from three months before your 65th birthday month to three months afterward.

You may want to delay signing up for Part B if you or your spouse has coverage through a current employer. And if you want to continue to contribute to a health savings account, you may want to delay signing up for Medicare Part A. You can't be enrolled in Medicare and contribute to an HSA. You also have to be careful about running afoul of the six-month lookback rule applied to HSA contributions when you finally decide to sign up for Medicare.  

See the Social Security Administration's Applying for Medicare Only for more information. If you work for an employer with fewer than 20 employees, you must sign up for Part A and usually need to sign up for Part B, which will become your primary insurance (ask your employer whether you can delay signing up for Part B).

7. Not signing up for Medicare Part B if you have retiree or COBRA coverage

When you turn 65, Medicare is generally considered to be your primary insurance, and any other coverage you have is secondary, unless you or your spouse has insurance through a current employer with 20 or more employees. 

But the coverage must be with a current employer. Other employer-related coverage, such as retiree coverage, COBRA coverage, or severance benefits, isn't considered to be primary coverage after you turn 65. 

That means if you don't sign up for Medicare, you may have gaps in coverage and be subject to a lifetime late-enrollment penalty of 10% of the current Part B premium for every year you should have been enrolled in Part B but were not.

8. Forgetting about the Medicare Part B enrollment deadline after leaving your job

When you have coverage through an employer with 20 or more employees, you don't have to sign up for Medicare at 65. But you need to sign up within eight months after you leave your job, or you may have gaps in your coverage.  You may have to wait until the next enrollment period, and you may also get hit with the 10% lifetime late-enrollment penalty

You qualify for a Special Enrollment Period (SEP) and will not be liable for penalties when you enroll within the 8-month window. You can sign up for Medicare within 8 months of the day you or your spouse stops working, even if your group health plan continues for a time. Or you can sign up within 8 months of the group health plan ending, while you or your spouse continues to work. Coverage typically begins the month after you sign up.

9. Making financial moves that increase your Medicare premiums

Most people pay the standard premium for Medicare Part B. For 2025, that is $185.00 per month. But if you're a high-income earner, you will pay the income-related monthly adjustment amount (IRMAA) for Part B.

For 2025, those who were single with an adjusted gross income from 2023 of more than $106,000 (or more than $212,000 for joint filers) pay an additional monthly surcharge. This surcharge ranges from $74.00 to $443.90 in 2025.

And you'll have to pay a high-income surcharge for your Part D prescription drug coverage, too, which can boost your premiums by $13.70 to $85.50 per month in 2025.

This surcharge is assessed by the Social Security Administration (SSA) based on your income from two years prior. Income from your 2023 tax return was used to determine your liability for 2025. For 2026, the SSA will use the information on your 2024 tax return. 

If you're near the income cutoff, be careful about financial moves that could increase your adjusted gross income and make you subject to the surcharge, such as rolling over a traditional IRA to a Roth IRA or making big withdrawals from tax-deferred retirement accounts. To stay below the limits, you may want to spread your Roth conversions over several years. 

10. Not contesting the high-income surcharge for the year you retire

Your Part B and Part D premiums will be higher if your income is over a certain threshold. The Social Security Administration uses your most recent tax return on file (which is 2023 for 2025 premiums) to determine whether you're subject to the surcharge. For 2025, single filers with an adjusted gross income of more than $106,000 ($212,000 for joint filers) in 2023 pay more than the standard premiums.

But you may be able to get the surcharge reduced on appeal if your income has dropped since then because of certain life-changing events, such as marriage, divorce, death of a spouse, retirement, or a reduction in work hours. You can ask Social Security to use your more recent income instead. Be prepared to provide evidence of the life-changing event, such as a signed statement from your employer that you retired or proof of reduced income.  

See the Social Security Administration's Medicare Premiums: Rules for Higher-Income Beneficiaries for more information.

11. Signing up for Medicare Part A if you want to contribute to an HSA

If you or your spouse has health insurance through your current job, you can delay signing up for Part A and Part B and keep contributing to an HSA. This isn't an option if you have already signed up for Social Security or your employer has fewer than 20 employees — in that case, you can't delay signing up for Part A. 

Be careful about your contributions in the year you leave your job and sign up for Medicare — you must prorate your HSA contributions based on the number of months before you were covered by Medicare.

And don't forget that after you turn 65, you can use HSA money tax-free to pay premiums for Medicare parts B and D and Medicare Advantage plans (but not premiums for Medicare supplement policies), in addition to paying for other out-of-pocket medical expenses.