7 Medicare Mistakes That Cost Retirees Thousands

Medicare looks simple in commercials and brutally confusing in real life. Here are the seven mistakes that come up most often — and how to dodge them.

1. Missing your Initial Enrollment Period

You get a 7-month window around your 65th birthday. Miss it without qualifying coverage, and you can face lifetime Part B premium penalties of 10% for every 12 months you delayed.

2. Assuming COBRA counts as "creditable coverage"

It usually doesn't. People retire at 64, ride COBRA for 18 months, and then get a penalty notice they didn't see coming.

3. Picking a Part D plan based on the premium

The cheapest premium often has the most expensive formulary. Always re-shop Part D every year through the Medicare Plan Finder using your actual drug list.

4. Ignoring IRMAA

IRMAA (Income-Related Monthly Adjustment Amount) surcharges your Part B and Part D premiums when income crosses certain thresholds. It looks back two years, so a one-time Roth conversion in 2026 can spike your premiums in 2028.

5. Treating Medicare Advantage and Medigap as interchangeable

They're fundamentally different products. Advantage plans look cheaper monthly but lean on networks and prior authorization. Medigap costs more but pays predictably. The right pick depends on health, travel patterns, and risk tolerance.

6. Skipping the Medigap Open Enrollment window

The 6-month window after you start Part B is the only time most insurers can't medically underwrite you. Miss it and a future cancer or heart history can lock you out.

7. Not coordinating with your spouse's plan

Two-spouse households often have one on employer coverage and one on Medicare. The interplay between HSAs, employer drug plans, and Medicare Part A enrollment is full of traps.

Medicare isn't a "set it and forget it" decision. Plan it the year before, re-shop drug coverage every fall, and re-evaluate Medigap vs Advantage every few years.