Retirement Retirement Planning

8 Medicare Mistakes That Cost Retirees Thousands Every Year - And Most Don't Know They're Making Them

Many retirees make Medicare errors that can increase premiums for life.

By Sara Albertelli , Edited by Laura Hohenstein

Updated May 18, 2026

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To most people, Medicare seems as though it should be fairly straightforward. People assume that once they turn 65, they'll sign up and be covered. But the system is more complex than that, with specific enrollment windows, income-based surcharges, and coverage exclusions that catch people off guard.

With Medicare, the financial penalties for getting it wrong tend to be permanent. Here are some of the most common mistakes so that you can avoid wasting money in retirement, and what to do instead.

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Missing the Part B sign-up window

Missing the Part B enrollment window is probably the most expensive Medicare mistake you can make. If you miss your initial enrollment period, you pay a 10% surcharge on your Part B premium for every full year that you are eligible but did not enroll, and that penalty lasts for life.

At the 2026 standard premium of $202.90 a month, enrolling two years late adds roughly $40 to your monthly bill permanently. That's more than $9,700 over the course of a 20-year retirement.

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Assuming Medicare covers dental, vision, and hearing

Original Medicare, including both parts A and B, does not cover certain things like routine dental exams, cleanings, fillings, eye exams, eyeglasses, or hearing aids. Every one of those essential but uncovered services comes out of pocket unless you have a Medicare Advantage plan with those benefits or separate supplemental coverage.

A single crown runs $800 to $2,000 out of pocket, and prescription hearing aids average $2,000 to $8,000 a pair. Most retirees only find out about this gap once they're already at the appointment desk.

Not enrolling in a Medigap supplement at the right time

Starting the month you turn 65 years old and enroll in Medicare Part B, you have a six-month Medigap open enrollment window. During that window, insurers are legally required to sell you any plan they offer without medical underwriting.

If you miss this enrollment window, insurers in most states can then deny you coverage entirely or charge higher premiums based on your health history. This window is a one-time deal and does not reset with the annual full open enrollment period.

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Skipping Part D because you don't take prescriptions

Skipping a Part D drug plan to save on premiums is a common mistake people tend to make, and they don't realize it will backfire.

If you go 63 days or more without creditable prescription drug coverage after you're first eligible, you'll face a permanent Part D penalty, which is 1% of the national base beneficiary premium for every month without coverage. At the 2026 base premium of $38.99, even one full year without coverage adds nearly $4.70 to your monthly Part D premium indefinitely.

Not accounting for the IRMAA income surcharge

Most people know what the standard Part B premium costs, but very few know that this may not be what they pay. If your modified adjusted gross income exceeded $109,000 as a single filer or $218,000 for joint filers in 2024, you'll pay an Income-Related Monthly Adjustment Amount (IRMAA) surcharge on top of your Part B and Part D premiums in 2026.

Those surcharges range from $81.20 to $487 a month for Part B alone. Since IRMAA is based on your income from two years prior, a strong earning year before retirement can trigger it unexpectedly.

Assuming Medicare covers long-term care

Medicare does not cover long-term custodial care, such as help with bathing, dressing, meals, and daily living activities. It does cover skilled nursing facility care, but only under specific conditions, and only for up to 100 days per benefit period. After 20 days, you are responsible for a daily copayment of $217, and after 100 days, Medicare pays nothing.

The national average cost for a semi-private nursing home runs from $9,500 to $10,800 a month in 2026. This has to be paid entirely out of pocket unless you have a long-term care insurance plan or Medicaid.

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Treating COBRA as a substitute for Medicare

Many retirees assume that keeping Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage after leaving a job protects them from Medicare's Part B late enrollment penalty. It does not.

COBRA is not considered active employer coverage for Medicare enrollment purposes. Your eight-month special enrollment period begins when your active employer coverage ends, not when COBRA expires. Letting COBRA run its course before enrolling in Part B is a timing mistake that triggers the lifetime penalty.

Enrolling once and never reviewing your plan

Medicare Advantage and Part D plans change every year. Premiums, formularies, provider networks, and out-of-pocket costs can all change between January and the following enrollment window.

Staying in a plan without reviewing your Annual Notice of Change letter each fall means you may be paying more for drugs that move to a more expensive tier or seeing doctors who are no longer in-network. The annual open enrollment window runs from Oct. 15 through Dec. 7, and changes take effect Jan. 1.

Bottom line

The mistakes with Medicare that cost retirees the most tend to involve deadlines that are easy to miss and coverage gaps that nobody warns you about in advance. Missing a single enrollment window, skipping a drug plan, or misunderstanding what Medicare actually covers can mean hundreds of dollars in permanent monthly surcharges or tens of thousands in uncovered care costs.

If you are approaching 65 or recently enrolled, a free session with a State Health Insurance Assistance Program (SHIP) counselor is worth scheduling before you make any selections. SHIP counselors are federally funded and have no financial stake in which plan you choose. Talking to them is a smart money move for seniors to understand costs and coverage options.

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