Common Medicare Mistakes and How to Avoid Them When Choosing a Plan

Exploring the world of Medicare can feel overwhelming, especially when you first become eligible for Medicare around the time you turn 65. With various parts, plans, and enrollment windows, it’s easy to make mistakes. These common Medicare mistakes can lead to coverage gaps, unexpected out-of-pocket costs, and potentially lifelong penalties. Understanding these pitfalls is the first step towards choosing the right Medicare plan for your specific healthcare needs and budget. This guide to Medicare decisions aims to highlight 10 common Medicare mistakes and provide actionable tips to help avoid them.

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Medicare Mistakes to Avoid

1. Missing Your Initial Enrollment Period (IEP)

The Mistake: One of the most common mistakes new Medicare enrollees make is missing their Initial Enrollment Period (IEP). This is your primary window to sign up for Medicare. It's a 7-month period starting 3 months before the month you turn 65, including your birthday month, and ending 3 months after.
Why It's Costly: If you delay enrolling in Medicare Part B and don't have other qualifying coverage (like from a current employer), you could face a lifelong late enrollment penalty added to your monthly Part B premium. This penalty is 10 percent higher for each full 12-month period you were eligible but didn't enroll. Your premium may be 10 percent higher, or even more, permanently. You might also have to wait for the General Enrollment Period (Jan 1 - Mar 31) to enroll, with coverage not starting until July 1st.
How to Avoid: Know your IEP dates. Even if you're still working, understand how your employer coverage interacts with Medicare. Enroll in Medicare Parts A and B on time if needed.

2. Delaying Medicare Part B Enrollment Without Creditable Coverage

The Mistake: Assuming you don't need Medicare Part B when you turn 65 because you feel healthy or have other insurance that isn't considered "creditable coverage" by Medicare (e.g., COBRA, retiree coverage, VA coverage used alone).
Why It's Costly: As mentioned above, delay Medicare Part B enrollment without creditable coverage leads to the late enrollment penalty on your premium for Medicare Part B.
How to Avoid: Verify if your existing health insurance is creditable for Part B. If you're working for an employer with 20+ employees, you might be able to delay Part B without penalty and enroll later during a Special Enrollment Period (SEP) when that coverage ends. Always confirm your situation.

3. Assuming Original Medicare Plan (Parts A and B) Covers Everything

The Mistake: Believing that once you have Original Medicare (Parts A and B), all your healthcare costs are covered.
Why It's Costly: Original Medicare covers many services, but not everything. There are deductibles, coinsurance (typically 20% for Part B services after the deductible), and no annual cap on out-of-pocket costs. Crucially, it generally doesn't cover routine dental, vision, hearing aids, or most prescription drug coverage. Medicare pays the lion’s share for covered services after deductibles/coinsurance, but you are responsible for the costs that Medicare doesn’t cover.
How to Avoid: Understand what Medicare covers. Consider supplemental coverage like a Medicare Supplement (Medigap) plan to help cover the out-of-pocket costs that Medicare doesn’t cover, or explore Medicare Advantage plans. Also, address prescription needs separately if choosing Original Medicare.

4. Not Understanding the Difference: Original Medicare vs. Medicare Advantage

The Mistake: Confusing Original Medicare (Parts A & B, often paired with a Part D plan and possibly Medigap) with Medicare Advantage (Part C) plans.
Why It's Costly: These are fundamentally different ways to receive your Medicare coverage. Choosing the wrong plan structure for your needs can lead to higher costs or restricted access to care. Original Medicare offers broad access to doctors accepting Medicare, while Medicare Advantage plans typically use provider networks (like HMOs or PPOs).
How to Avoid: Research both Medicare options. Original Medicare plus supplements provides predictable costs for covered services but often higher monthly premium totals. Medicare Advantage plans often have lower premiums (sometimes $0) and may include extra benefits (dental, vision, prescription drug coverage), but involve networks and potentially higher co-pays/co-insurance for services. Compare Medicare Part D or Medicare Advantage or Part D and Medicare Advantage combinations carefully.

5. Choosing a Medicare Advantage Plan Without Checking Networks

The Mistake: Enrolling in a Medicare Advantage plan without verifying if your preferred doctors, hospitals, and specialists are in the plan's network.
Why It's Costly: Going out-of-network on many Medicare Advantage plans can mean significantly higher out-of-pocket costs or no coverage at all (except in emergencies).
How to Avoid: Before choosing a plan, use the plan's provider directory (online or request a paper copy) to make sure your plan may include your essential healthcare providers. Confirm they are accepting that specific plan, not just "Medicare". Need a local agent with years of experience? Get in touch with Mountaintop Insurance Solutions.

6. Ignoring or Underestimating Prescription Drug Needs (Part D)

The Mistake: Not enrolling in a Medicare Part D (prescription drug plan) when first eligible, assuming you don't need it now, or picking a drug plan without checking if your specific medications are covered.
Why It's Costly: Similar to Part B, delaying enrollment in a Part D plan without other creditable prescription drug coverage can result in a permanent late enrollment penalty added to your monthly premium. Furthermore, picking a plan where your prescription drugs aren't covered well (or at all) can lead to extremely high Medicare costs.
How to Avoid: Even if you take few medications now, consider enrolling in a low-premium Part D plan to avoid future penalties. If you take medications, use the Medicare Plan Finder tool (Medicare.gov) to compare Medicare prescription drug plans based on your specific drug list. Check formularies (lists of covered drugs), tiers, and pharmacy networks. Decide between a standalone Part D plan (with Original Medicare) or getting coverage through a Medicare Advantage plan (Medicare Advantage plans include drug coverage often, designated MA-PD). Compare Medicare Part D and Medicare Advantage drug benefits carefully.

7. Focusing Only on the Monthly Premium

The Mistake: Choosing a plan solely because it has a low or $0 monthly premium.
Why It's Costly: A plan with a low premium might have higher deductibles, co-pays, co-insurance, and a higher maximum out-of-pocket limit. Depending on your health needs, this could cost you much more over the year than a plan with a higher premium but better coverage.
How to Avoid: Look at the total potential Medicare costs: premiums + deductibles + co-pays/co-insurance + maximum out-of-pocket limit. Estimate your likely healthcare usage for the year when comparing Medicare options.

8. Failing to Review Your Coverage Annually

The Mistake: Assuming your current Medicare plan (especially Medicare Advantage or Part D plans) will remain the best option for you year after year without checking.
Why It's Costly: Plans change annually. Networks, formularies, premiums, and co-pays can all be adjusted. Your Medicare Advantage plan renews, but the terms might differ. Your health needs might also change. Sticking with a plan that's no longer optimal is one of the common mistakes.
How to Avoid: Use the Medicare Open Enrollment Period (October 15 - December 7) each year to review your Medicare coverage. Compare your current plan with new offerings. Check if your doctors are still in-network and your prescriptions are still covered favorably. The Medicare Advantage Open Enrollment Period (Jan 1 - Mar 31) also allows switching between Medicare Advantage plans or returning to Original Medicare.

9. Choosing the Wrong Plan Type for Your Lifestyle

The Mistake: Picking a plan that doesn't align with your travel habits or healthcare preferences (e.g., choosing a restrictive HMO if you travel frequently).
Why It's Costly: An HMO typically requires referrals and restricts care to a network, which can be problematic if you spend winters in another state or need specialized care outside your local area. Choosing the wrong plan can limit access or increase costs. The wrong plan can cost you dearly in convenience and money.
How to Avoid: Consider your lifestyle. If you travel often within the US, Original Medicare with a Medigap plan offers nationwide coverage. Some Medicare Advantage PPO plans offer more flexibility than HMOs but may have higher costs for out-of-network care.

10. Not Exploring Financial Assistance Options

The Mistake: Assuming you have to pay for Medicare premiums and costs entirely out-of-pocket without checking if you qualify for help.
Why It's Costly: You might be unnecessarily straining your budget when help is available.
How to Avoid: Investigate financial assistance with Medicare premiums and other costs. Look into Medicare Savings Programs (MSPs) which can help pay premiums for Medicare Part A and/or Part B, and sometimes deductibles, coinsurance, and co-payments. Also, explore Extra Help (Low-Income Subsidy) for assistance with Part D plan costs. Check with your State Health Insurance Assistance Program (SHIP) for guidance.

Making Your Medicare Choice

Choosing a Medicare plan is a significant decision. Whether you opt for Traditional Medicare (Original Medicare) potentially combined with Medicare Part D or Medicare Advantage, understanding the nuances is key. Many Medicare beneficiaries find the process complex, making it easy to make mistakes.

To help avoid these costly Medicare mistakes:

Start learning before your Initial Enrollment Period.
Understand the different parts of Medicare and Medicare Advantage options.
Assess your health needs and budget honestly.
Check provider networks and drug formularies carefully.
Don't focus solely on the monthly premium.
Review your Medicare plan annually during the Open Enrollment Period.
Utilize resources like Medicare.gov, 1-800-MEDICARE, and your local SHIP counselors.

By avoiding these common mistakes, you can navigate the Medicare enrollment process more confidently and find a plan that provides the Medicare coverage you need for peace of mind and Medicare savings. Don't designate Medicare decisions to chance; be proactive and informed.

Contact Us

If you're in Bend, OR, and need Medicare coverage, you don’t have to navigate it alone. Mountaintop Insurance Solutions provide expert Medicare guidance tailored to your unique needs. Call us now at (541) 641-8886 now to explore your best options. Secure your health and peace of mind with the right plan!