Medicare Enrollment: 7 Costly Mistakes to Avoid

Medicare enrollment is one of the most confusing and consequential decisions in retirement planning. The rules are complex, the penalties for mistakes are steep, and the choices you make at enrollment can lock you in for years. Here are seven mistakes we see most often — and how to avoid them.

Mistake #1: Missing your Initial Enrollment Period. Your IEP begins three months before the month you turn 65 and extends three months after. If you miss this window and don’t have qualifying employer coverage, you’ll face a 10% penalty on Part B premiums for each 12-month period you were eligible but didn’t enroll. This penalty lasts for life.

Mistake #2: Assuming employer coverage is always sufficient. If your employer has fewer than 20 employees, Medicare becomes your primary insurer at 65, and you must enroll in Part B to avoid coverage gaps and penalties. Even with larger employers, understanding how your group plan coordinates with Medicare is essential.

Mistake #3: Ignoring Medigap timing. You have a six-month Medigap Open Enrollment Period starting when you’re both 65+ and enrolled in Part B. During this window, insurers must accept you regardless of health status. After it closes, insurers can deny coverage or charge higher premiums based on your health.

Mistake #4: Choosing a plan based solely on premiums. The lowest-premium Medicare Advantage plan may have narrow networks, high out-of-pocket maximums, and restrictive prior authorization requirements. For retirees with specific health needs or travel plans, a Medigap supplement with standalone Part D coverage often provides more predictable costs.

Mistake #5: Overlooking IRMAA surcharges. If your modified adjusted gross income exceeds certain thresholds ($103,000 for individuals, $206,000 for couples in 2025), you’ll pay higher Part B and Part D premiums. IRMAA is based on your tax return from two years prior, so a spike in income from a Roth conversion, home sale, or stock option exercise can trigger surcharges.

Mistake #6: Not reviewing your plan annually. Medicare Advantage and Part D plans change their formularies, networks, and costs every year. The plan that was ideal last year may no longer cover your medications or include your preferred doctors. Annual review during Open Enrollment (October 15 – December 7) is essential.

Mistake #7: Failing to plan for long-term care. Medicare does not cover most long-term care costs. Assisted living, memory care, and extended nursing home stays are largely out-of-pocket expenses. Planning for these costs — through insurance, savings, or family arrangements — should begin well before you need them.

At Authentikos Advisory, healthcare planning is central to our Optimized Healthcare pillar within the Arbor Method™. We help you navigate enrollment decisions, coordinate Medicare with your overall tax and income strategy, and plan for the healthcare costs that Medicare doesn’t cover.