Common Medicare Mistakes & How to Avoid Them
Here are some of the most common Medicare enrollment mistakes—and how to avoid them.
Missing your Initial Enrollment Period (IEP)
The seven-month window around your 65th birthday (three months before, your birthday month, and three months after) is your main opportunity to sign up for Part A and/or Part B. If you miss it, you’ll wait for the General Enrollment Period and pay lifetime late-enrollment penalties.
Enrolling at 65 without evaluating employer coverage
If you or your spouse have creditable employer-sponsored insurance, you’re not required to sign up for Medicare at age 65. Always compare your current plan’s benefits and costs with Medicare before deciding.
Relying on COBRA as creditable coverage
COBRA does not count as creditable coverage for Part B. Delaying Part B because you expect COBRA to fill the gap means waiting for GEP and facing Part B penalties.
Autopiloting Medicare Part D prescription drug or Medicare Part C (Advantage Plan)
Formularies change, premiums rise, copays shift, and benefits evolve each year. If you don’t review and, if needed, switch plans during Open Enrollment (Oct 15–Dec 7), you could pay significantly more for prescriptions or medical services.
Choosing the same Part D prescription drug plan or Medicare Part C (Advantage Plan) as your spouse
There are no spousal discounts, and most couples don’t take identical medications or have the same medial needs. Choose a plan based on your personal needs, not your spouse’s.
Ignoring your plan’s Annual Notice of Changes (ANOC)
Every fall, insurers send an ANOC detailing next year’s premiums, covered providers, and drug tiers. Skipping this review can leave you in a plan that’s no longer cost-effective or network friendly. Always review and schedule an appointment with your Broker to discuss changes.
Skipping your annual Broker review
Your broker is certified and up-to-date on every plan’s changes. Use (AEP) Annual Election Period to compare options and let them handle the research for you.
Overlooking Special Enrollment Period (SEP) rights
Qualifying life events (like employer coverage ending) trigger SEPs. Missing these windows can leave you uninsured or penalized.
Not enrolling in Part D when you first become eligible
If you don’t have creditable prescription coverage and skip Part D at initial enrollment, you’ll pay a 1% late-enrollment fee of the national base beneficiary premium for each uncovered month.
Delaying Part B without Creditable Coverage
If you don’t have creditable medical coverage and skip Part B at initial enrollment, you’ll pay a 10% late-enrollment fee to your monthly premium for each 12-month period you delay enrolling.
Missing Medigap enrollment windows
Your six-month Medigap open enrollment period starts the month you turn 65 and enroll in Part B. Missing it can subject you to medical underwriting or higher premiums. Please note some states such as NY have no underwriting for health insurance ever. In addition, some states are enacting the “Birthday Rule” which allows beneficiaries to switch policies without facing health underwriting requirements during the 30 days before and 60 days after the policyholder’s birthday. The new policy must have the same or lesser benefits as the old one and can be with any company.
Assuming all Medicare Advantage Plans are inferior
Medicare Advantage plans vary widely in networks, benefits, and out-of-pocket caps. Don’t generalize—evaluate each plan on its own merits.
Assuming everyone should enroll in a Medicare Supplement (Medigap) Plan
Supplement plans vary in premium across the country and not everyone can afford it. In addition, some states allow individuals to enroll in a Supplement plan at any time so enrolling before they need the extended service may not be a good use of their dollars.
Assuming Medicare Supplement (Medigap) Plans are accepted everywhere
Some hospitals, facilities and doctors do not accept Medicare. You must always check before having any services to avoid costly invoices.
Confusing Medicare Brokers, Agents and Government Counselors are the same
Medicare Brokers and Agents are licensed within the state where they sell health insurance. They had to complete at least a 40-hour training and take two tests to pass the state licensing exam. To keep their licenses, they are required to conduct continuing education either yearly or bi-annually with their state licensing board. In addition, they are required to pass an annual compliance, ethics and Fraud, Waste and Abuse exam. Brokers represent several, if not all, insurance companies offered in an area. While Agents only represent one insurance company, also known as Captive. Each receive training from the insurance companies on their new plan offerings each year. Agents and Brokers do not charge for their services and are paid a set commission determined by the Centers of Medicare and Medicaid Services (CMS). Government Counselors are typically unlicensed volunteers.
Assuming Brokers charge for their services
Brokers do not charge for their services and are paid a set commission determined by the Centers of Medicare and Medicaid Services (CMS). This commission rate is the same for every Medicare Advantage Plan (Part C) and Medicare Prescriptions Drug Plan (Part D). Medicare Supplement plans are more nuanced with their commission schedule payments.
Overlooking prescription coverage gaps
Not all prescription drug plans, Part D or Part C, cover all prescriptions. The insurance companies are required to cover at least two prescriptions per ailment but it’s up to the insurance company to decide how many beyond two they want to cover. It is in your best interest to verify your prescriptions are covered on the insurance company’s formulary each year.
Assuming all prescriptions are the same tier with every insurance company
Each insurance company has the option to determine which tier they want to cover a prescription, or at all. It is in your best interest to very your prescription tiers each year to avoid surprises at the pharmacy.
Not confirming doctors are in network
With Medicare Advantage plans, making sure your doctors are within the network is important to keep co-pays low. Some doctors and facilities will take out of network plans; however, the co-pays will be much higher.
Assuming HMOs require referrals
Most Medicare Advantage HMO plans no longer require referrals. Your Broker can help you understand which ones those are. Please note, some doctors’ offices are requiring a referral before you can make an appointment.
Assuming you can go to any doctor or facility with a PPO plan
While PPOs provide a bit more flexibility for doctors and hospitals, assuming it will allow access to all could cost you. Not all out of network providers will accept all out of network payments, which means you will pay the full amount of the service. You must check first before going out of network.
Believing Medicare Supplement (Medigap) Plans cover prescriptions
Medigap policies haven’t included prescription drug coverage since 2006. Prescription drug plans are sold separately.
Skipping prescription drug coverage because you take no medications
All Medicare beneficiaries must maintain Creditable Part D coverage, even if they don’t currently use any prescriptions. Not having prescription drug coverage will result in lifetime penalties.
Choosing a plan based solely on premium
Just because a plan has a higher premium doesn’t mean it has better coverage and visa versa assuming a low or no premium plan isn’t rich in benefits may not be true either. Consulting with your broker will help you identify options that match both your budget and your specific healthcare needs.
Choosing a plan that doesn’t meet your health needs
Selecting a plan without verifying that it covers the specialists, treatments, or therapies you require can lead to unexpected out-of-pocket costs and care delays. Always review each plan’s network, covered services, and cost-sharing details to ensure it aligns with your specific medical conditions and treatment preferences.
Assuming you’re stuck with your plan all year
You may actually qualify for a Special Enrollment Period to switch coverage outside the usual windows—whether you move out of your plan’s service area, enroll in a State Pharmaceutical Assistance Program (SPAP), receive a disaster-related AEP extension (FEMA), or take advantage of the Medicare Advantage Open Enrollment Period (January 1–March 31), among other SEP triggers.
Tip: Mark key dates in your calendar, review plan notices each fall and contact Clear Benefits Advisors early to compare options, so you never miss a window or pay a penalty!
