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Guard Your Health and Your Wealth: Avoid These 7 Medicare Missteps

Longer lifespans, chronic health conditions, and thousands of rules have made Medicare enrollment a confusing maze for many Americans. Yet making wise choices is crucial to sound financial planning for your golden years. Read on as we spotlight the Medicare issues that most frequently trip up seniors and how to avoid the most serious mistakes.

Pay Attention to Important Deadlines

Medicare is the federal government’s health insurance program for people aged 65 and older, with seniors qualifying at a rate of 10,000/day. You have a seven-month window to enroll in the program, with the fourth month usually the one in which you turn 65. 

Misstep #1: Missing your initial enrollment deadline 

If you fail to sign up during your seven-month window, you’ll be charged a 10% late penalty for each 12-month period you delay enrollment. This penalty gets added to your monthly premium for the rest of your life 

Misstep #2: Waiting until you draw on Social Security to enroll in Medicare 

Medicare is administered by the Social Security Administration, leading some seniors to think that Social Security income and Medicare benefits always kick in simultaneouslyIn reality, each benefit program has its own requirements.  

Review Your Options Carefully


Medicare Part A and B – “Original” Medicare is divided into two parts. Part A (hospital, skilled nursing care, hospice stays) is premium-free for most people. Part B (doctor visits, lab tests, diagnostic imaging, chemotherapy) is optional and requires a premium paymentYou’ll be able to see any medical provider who accepts Medicare.

Misstep #3: Failure to sign up for Part B during initial enrollment 

Because Part B is optional, people who rarely see a doctor sometimes decide to skip initial enrollment. If circumstances change and they need Part B coverage, they must wait to sign up during the annual general enrollment period that runs from January 1 – March 31 and wait for coverage to take effect on July 1. The 10% late penalty also applies. 

Misstep #4: Failure to enroll in Part B after you leave your job 

 You can delay Part B enrollment if:  

  • You have health coverage past 65 from an employer for whom you or your spouse actively work 
  • Your employer has 20 or more workers.

If you meet these criteria, you can enroll in Part within eight months of leaving your job. 

If you turn 65 while receiving Social Security income, you’ll be enrolled in Medicare (Parts A and B) automatically. If you’re still working and want to delay Part B, you must take action to suspend it. 

Medigap is private insurance you can purchase to cover some or most of the deductibles, co-pays, and other out-of-pocket expenses not covered by Medicare. 

Misstep #5: Missing Medigap enrollment

If you purchase a Medigap supplemental plan within six months of enrolling in Part B, you can sign up for any plan offered in your area. You may not be turned down due to a preexisting medical condition. After six months, insurers in most states can reject you or charge you more based on your health. Rules vary state-by-state.  

Part D is a federally-created program to help lower prescription drug costs. Part D is optional and provided by private insurers, so enrollment conditions vary. 

Misstep #6: Failure to sign up for Part D

If you don’t use prescription drugs, you may be tempted to skip Part D and save the premium. If you need medication in the future, however, you face delayed enrollment and a late penalty. Choose the best plan to meet your needs knowing there’s an open enrollment for Part D every year from October 15 to December 7. You have an annual opportunity to switch plans as your needs change. 

Medicare Advantage (formerly called Part C) is Medicare insurance offered by private providers. Premiums can be lower than original Medicare, but you are restricted to a network of providershave more co-pays, and can be turned down if a provider reaches its threshold for applicants. There are set open enrollment periods during which you can change to another Advantage plan or switch back to original Medicare. 

Pay Attention to How Your Income Impacts Medicare

Single seniors with an adjusted gross income of more than $85,000 ($170,000 for couplesare subject to higher Medicare premiums.


Misstep #7: Incurring a high-income premium surcharge

If you’re close to the threshold, consider how financial moves may increase your gross income. Examples include rolling over a traditional IRA to a Roth IRA and making large withdrawals from tax-deferred retirement accounts. 

Still confused? You are not alone. These represent only the most common missteps for seniors sorting through their Medicare options. Feel free to reach out to FJY Financial; we have a network of expert resources who can guide you to a strategy that’s good for your well-being as well as your wallet.