Medicare Enrollment Mistakes That Can Cost You

Why these mistakes matter

Medicare is the backbone of health coverage for most Americans aged 65 and older and for some younger people with disabilities. A single enrollment mistake can create lifetime financial consequences: higher monthly premiums (Part B or Part D penalties), months without coverage, or trouble getting a Medigap policy without health underwriting. In my 15 years advising clients, I’ve repeatedly seen seemingly small timing errors magnify into substantial, avoidable costs. (See official guidance at Medicare.gov for current rules and timelines.)

The most costly enrollment errors and how they happen

1. Missing your Initial Enrollment Period (IEP)

• What it is: Your IEP is a seven-month window that generally begins three months before the month you turn 65, includes your birthday month, and ends three months after. (medicare.gov)
• Why it costs you: If you delay Part B without qualifying for a Special Enrollment Period (SEP), you may face a lifetime Part B late-enrollment penalty (typically 10% for each 12-month period you were eligible but didn’t enroll) and delayed coverage start dates. (cms.gov)
• How to avoid it: Mark the IEP on your calendar as soon as you know your Medicare-eligibility date. If you have employer coverage, confirm with HR whether that coverage qualifies you for an SEP when it ends.

1. Assuming automatic enrollment in all parts

• The truth: If you already receive Social Security or Railroad Retirement Board benefits before turning 65, you’ll usually be automatically enrolled in Part A and Part B. But if you’re still working and not receiving those benefits, you often must sign up yourself. Not enrolling because you assumed automatic coverage is a common, expensive mistake. (medicare.gov)

1. Skipping Part D (prescription drug coverage)

• The risk: If you don’t sign up for Part D when first eligible and don’t have other credible prescription coverage, you’ll likely pay a Part D late-enrollment penalty. This penalty is calculated based on the national base beneficiary premium and the number of uncovered months you were eligible. (medicare.gov)
• Practical tip: Compare drug formularies and total annual out-of-pocket cost — a low premium plan that excludes your medicines can cost much more in the long run.

1. Choosing Medicare Advantage or Medigap without checking provider networks and prior authorization rules

• What to watch for: Medicare Advantage (Part C) plans may offer extra benefits but often limit you to a particular provider network and require prior authorizations. Medigap policies supplement Original Medicare but can vary by plan letter and state availability. Picking a plan solely on price or marketing material can lead to surprise denials or high out-of-network costs.

1. Misunderstanding employer coverage coordination and SEP rules

• Employer coverage rules: If you or your spouse have current employer coverage based on active employment, you generally delay Part B without penalty and later enroll using a Special Enrollment Period when the employer coverage ends. But details depend on employer size and type of plan. Confirm with your employer or plan administrator and get documentation — it’s your proof if Medicare asks. (medicare.gov)

1. Missing Medigap guaranteed-issue rights

• Why this matters: If you delay enrolling in Medigap until after your guaranteed-issue right window (usually tied to your first six months of Part B when you’re 65), insurers can require medical underwriting and may deny coverage or charge higher rates. Know state-specific protections and act during guaranteed-issue periods.

1. Ignoring income-related adjustments: IRMAA surprises

• What IRMAA is: Higher-income beneficiaries can pay an Income-Related Monthly Adjustment Amount (IRMAA) for Part B and Part D, increasing monthly premiums based on past tax returns. If you’re planning Roth conversions, large one-time income spikes can trigger IRMAA for up to two years. (ssa.gov)
• Preventive action: Coordinate tax planning with Medicare timing; discuss Roth conversions and large capital events with your advisor to avoid unintended IRMAA increases.

What to do if you made a mistake

• Act quickly: Some mistakes are reversible or appealable. If you missed an enrollment window because of misinformation or other qualifying reasons, you may request a Special Enrollment Period or file an appeal. Check the Medicare.gov appeals and exceptions process.
• Document everything: Keep written proof from employers, insurers, and Medicare communications. I’ve helped clients reverse erroneous premium penalties by supplying employer letters showing continuous coverage.
• Contact Medicare and SSA early: For Part B and IRMAA questions, contact Medicare and the Social Security Administration. For Part D and plan changes, contact the plan sponsor.

Practical enrollment checklist (actionable)

1. Identify your eligibility date — the month you turn 65 or meet disability criteria.
2. Mark the Initial Enrollment Period (3 months before — 3 months after the eligibility month).
3. If employed (or covered by a spouse’s employer plan), confirm whether that coverage qualifies as creditable and document it.
4. Evaluate whether you need Part D and compare drug formularies and total costs, not just premiums. (See our deeper guide on Medicare Part D.)
5. If considering Medigap, research guaranteed-issue rights for your state and apply during your open guaranteed-issue window.
6. Review options during Annual Enrollment (Oct 15–Dec 7) and Medicare Advantage Open Enrollment (Jan 1–Mar 31) for plan switching.
7. Reassess plan choice every fall — networks, formularies, and premiums change annually.

Examples from practice (real but anonymized)

• Late Part B enrollment: A client delayed Part B while working and assumed they had coverage through retirement paperwork. They missed the SEP deadline after leaving the job and incurred a Part B penalty that increased their premium by a permanent amount — roughly 10% for each 12 months they delayed. Timely HR verification would have prevented this.

• Wrong drug plan selection: Another client chose a low-premium Part D plan but later discovered many prescriptions required high tiers or prior authorization. After switching plans at the next Open Enrollment, they still incurred high out-of-pocket costs for the transition year.

• Medigap underwriting denied: One person delayed buying Medigap beyond their guaranteed-issue period and was asked to answer health questions; their application was denied. They faced higher out-of-pocket exposure until a window opened or they moved to a Medicare Advantage plan.

Quick references and authoritative resources

• Medicare official site: https://www.medicare.gov (rules and enrollment windows)
• Centers for Medicare & Medicaid Services (CMS): https://www.cms.gov
• Social Security Administration (for enrollment and IRMAA details): https://www.ssa.gov

For plan-level comparison and local assistance, schedule a meeting with your State Health Insurance Assistance Program (SHIP) or a licensed advisor.

Internal resources you may find helpful

• Read how timing affects retirement income in our guide: Medicare Enrollment: Timing and Financial Impact on Retirement Income
• Compare drug coverage details before skipping Part D: Medicare Part D
• Learn specifics about Part B enrollment and coverage: Medicare Part B (Medical Insurance)

Final professional tips

• Don’t rush: Take time to compare costs — premiums, deductibles, copays, provider networks, and prescription coverage.
• Get proof: If you delay Medicare because of employer coverage, get the employer to sign a letter confirming coverage dates.
• Recheck annually: Even if you think your plan is fine, insurers change formularies and networks each year; review during Open Enrollment.

Professional disclaimer: This article is educational and not personalized financial, legal, or medical advice. For advice tailored to your circumstances, consult Medicare.gov, a licensed benefits counselor, or a qualified financial or health insurance professional.

(Information current as of 2025; rules are administered by CMS and may change—verify current dates and penalties at Medicare.gov.)