You may not spend much time thinking about Medicare until you’re getting ready to enroll. However, there are several important rules and timelines to understand. Being aware of common Medicare mistakes can help you better prepare for enrollment and avoid potential issues with coverage or costs.
Before enrolling in Medicare, it can be helpful to understand the different parts of the program and what each may cover. One common misunderstanding is assuming that Medicare covers all healthcare costs, when in many cases there are out-of-pocket expenses. Another is missing key enrollment periods, which may result in delays in coverage or additional costs.
1. Not enrolling on time
Your Initial Enrollment Period (IEP) is a seven-month window that generally begins three months before the month you turn 65, includes your birthday month, and continues for three months after.
If you delay enrollment and do not qualify for a Special Enrollment Period, a late enrollment penalty may apply. In many cases, this penalty can continue for as long as you have that coverage.
Planning ahead and understanding your enrollment timeline can help you avoid delays or additional costs.
2. Forgetting you might be eligible for a Special Enrollment Period
Some individuals may assume they need to enroll in Medicare at age 65 to avoid penalties. However, in certain situations, you may be able to delay enrollment without a penalty.
Individuals who have qualifying coverage through a current employer with 20 or more employees on the payroll may be eligible for a Special Enrollment Period. In many cases, this enrollment window begins after that coverage ends and may last for a limited time.
If you have coverage through an employer, it may be helpful to review how that coverage works with Medicare before deciding when to enroll.
3. Forgetting you can get Part A only
If you have qualifying employer coverage, you may consider delaying certain parts of Medicare. In some situations, individuals choose to enroll in Medicare Part A while delaying Part B.
Many people qualify for premium-free Part A based on their work history. Depending on your situation, Part A may work alongside other coverage, such as employer insurance, for hospital-related services.
Because coordination of benefits can vary, it may be helpful to review how your coverage works before enrolling.
4. Continuing to contribute to an HSA after enrolling
Health Savings Accounts (HSAs) can be used to pay for qualified healthcare expenses, including during retirement.
However, in general, once you are enrolled in any part of Medicare, you are no longer eligible to make new contributions to an HSA. Continuing to contribute after enrollment may result in tax implications.
You can still use existing HSA funds after enrolling in Medicare, but new contributions are generally not allowed.
5. Not Considering All of Your Options
Medicare Advantage plans are offered by private insurance companies and provide Medicare-covered Part A and Part B benefits. Some plans may include prescription drug coverage, depending on the plan.
Costs, provider access, and coverage rules can vary between Medicare Advantage plans and Original Medicare with a Medigap plan.
For example:
- Out-of-pocket costs may vary depending on the plan and services used
- Provider access may depend on whether the plan uses a network
Because of these differences, it can be helpful to compare how each option works based on your individual healthcare needs.
6. Waiting to buy Medigap coverage
Medicare Supplement (Medigap) plans are designed to help cover certain out-of-pocket costs associated with Original Medicare.
For example, under Medicare Part A, inpatient hospital care may involve a deductible and coinsurance, depending on the length of stay and benefit period.
It may be helpful to understand when you are eligible to enroll in a Medigap plan. In many cases, there is a six-month Medigap Open Enrollment Period that begins when you are both age 65 or older and enrolled in Medicare Part B.
During this period, you generally have guaranteed issue rights, meaning you may be able to purchase a Medigap policy without medical underwriting. Availability, pricing, and plan options can vary.
7. Taking Social Security at the Time of Your Medicare Enrollment
Because Medicare and Social Security are often discussed together, some individuals assume they must enroll in both at the same time.
However, Medicare eligibility generally begins at age 65, while full Social Security retirement benefits begin later, depending on your birth year.
If you choose to begin Social Security benefits before your full retirement age, your monthly benefit amount may be reduced. Because timing decisions can affect long-term benefits, it may be helpful to review your options carefully.
Don’t fall victim to these common Medicare mistakes
Medicare has several rules and timelines, so understanding how enrollment works can help you better prepare for your coverage decisions.
If you would like to learn more, you can explore educational resources or attend a Medicare workshop to better understand how the program works. You may also choose to speak with a licensed professional to review your options based on your individual situation.