Key Takeaways

• Many people mistakenly assume Medicare will cover all their health costs, which can lead to unexpected out-of-pocket expenses and delays in needed care.

• Understanding the actual limits and timelines of Medicare coverage in 2025 is essential for making informed healthcare decisions, especially around enrollment, out-of-pocket costs, and supplemental coverage.

Thinking Medicare Covers Everything

It’s common to believe that once you turn 65 and enroll in Medicare, all your healthcare expenses are completely taken care of. While Medicare does provide broad coverage, it doesn’t pay for everything. In 2025, there are still deductibles, copayments, and coinsurance you must pay, depending on the service.

For example:

• You’ll pay a deductible of $1,676 for each hospital benefit period under Medicare Part A.

• Medicare Part B requires a monthly premium of $185 and a deductible of $257, after which you typically pay 20% of the cost for approved services.

• Long-term custodial care, routine dental, hearing aids, and eye exams are not covered.

You may need additional coverage or savings to manage what Medicare doesn’t handle. Assuming you’ll have zero costs can lead to large bills you weren’t expecting.

Overlooking Enrollment Timelines

Another misconception is that you can enroll in Medicare at any time. Unfortunately, missing your initial enrollment period can cause delays and even lifetime penalties.

Here’s what you need to know in 2025:

• Your Initial Enrollment Period (IEP) lasts seven months: it starts three months before you turn 65, includes your birthday month, and ends three months after.

• If you miss your IEP and don’t qualify for a Special Enrollment Period (SEP), you’ll have to wait until the General Enrollment Period from January 1 to March 31, with coverage starting July 1.

• Late enrollment in Part B can result in a lifetime premium penalty of 10% for each full 12-month period you delayed enrollment.

Assuming you can “just sign up later” may cost you both time and money.

Confusing Medicare with Medicaid

People sometimes confuse Medicare with Medicaid, but they are very different programs. Medicare is primarily for people aged 65 and older or those with certain disabilities, regardless of income. Medicaid, on the other hand, is income-based and often helps cover things that Medicare doesn’t.

Believing that Medicare will offer the same level of support as Medicaid—such as full coverage for nursing home care—can lead to significant financial and care gaps. Medicaid may help pay for long-term care if you qualify based on income and assets, but Medicare does not cover custodial nursing home stays beyond 100 days following a qualifying hospital stay.

If you need long-term care or assisted living in the future, it’s important to explore your options beyond Medicare.

Assuming Medicare Automatically Includes Prescription Drug Coverage

Many assume that prescription drugs are automatically covered once enrolled in Medicare. However, Medicare Part D is separate and not automatically included in Original Medicare.

In 2025:

• If you don’t sign up for Part D when you’re first eligible, you may face a penalty that increases the longer you wait.

• The maximum deductible for Part D is $590, and you are responsible for copays and coinsurance until you reach the $2,000 annual out-of-pocket cap.

If you delay enrolling because you assume prescriptions are included, you may not only have to pay full retail prices but also face penalties and delays in getting the medications you need.

Ignoring the Impact of Income on Premiums

Medicare premiums can be higher if your income exceeds certain thresholds. This is known as the Income-Related Monthly Adjustment Amount (IRMAA).

In 2025:

• If your modified adjusted gross income exceeds $106,000 (individual) or $212,000 (joint filers), you’ll pay more for Parts B and D.

• The amount you pay is based on your tax return from two years ago (2023).

Not accounting for this can disrupt your budget planning, especially if your income has recently changed due to retirement, business sales, or other events.

Believing Medicare Advantage and Original Medicare Are the Same

In 2025, you can choose between Original Medicare (Parts A and B) or a Medicare Advantage Plan (Part C). These are not the same, and assuming they offer identical coverage can cause confusion.

Key differences:

• Original Medicare is administered by the federal government. Medicare Advantage is offered by private insurers under federal rules.

• Medicare Advantage plans often include prescription drug coverage and extra benefits like dental or vision—but they may have narrow provider networks and preauthorization requirements.

• Out-of-pocket costs and coverage rules can differ greatly.

If you assume they’re interchangeable, you might be surprised by limitations or changes in coverage, especially when you try to access care.

Thinking You Don’t Need Supplemental Coverage

Some people believe Medicare alone will be enough, but in reality, many beneficiaries benefit from Medigap (supplemental insurance) or retiree coverage to help with out-of-pocket costs.

Original Medicare doesn’t have an annual out-of-pocket maximum. That means your expenses can accumulate quickly in a year with multiple medical needs.

While Medicare Advantage plans have an annual out-of-pocket cap, it can be as high as $9,350 for in-network care in 2025.

Skipping supplemental options because you think Medicare covers everything can result in financial stress during health emergencies or chronic illness.

Assuming Medicare Starts the Day You Turn 65

Enrollment doesn’t always begin exactly on your 65th birthday. When you sign up determines when your coverage begins.

In 2025:

• If you sign up three months before your 65th birthday, your coverage starts on the first day of your birthday month.

• If you enroll during your birthday month or after, there may be a 1-3 month delay in your coverage start date.

Planning incorrectly can lead to temporary loss of insurance or delayed access to care.

Expecting Coverage for Care Outside the U.S.

Medicare generally does not cover care received outside the United States, with very few exceptions.

If you travel frequently or live abroad for extended periods, relying solely on Medicare may leave you uncovered in the event of illness or injury overseas.

You may need:

• Travel medical insurance

• Supplemental plans with foreign emergency coverage

It’s best to plan ahead if international travel or living abroad is part of your retirement.

Misunderstanding Annual Enrollment Opportunities

The Medicare Open Enrollment Period from October 15 to December 7 each year allows you to:

• Switch from Original Medicare to a Medicare Advantage plan

• Change or join a Part D plan

• Return to Original Medicare

However, some people think they can change plans anytime. Outside of Open Enrollment, you must qualify for a Special Enrollment Period due to specific life events, such as moving or losing coverage.

Missing this window can lock you into a plan for the next calendar year, regardless of changing healthcare needs.

Believing Preventive Services Are Always Free

Medicare does cover a wide range of preventive services—but not all of them are free.

Covered services include:

• Annual wellness visit

• Certain screenings (e.g., mammograms, colorectal cancer)

• Flu and COVID-19 vaccines

However, some preventive tests and follow-up procedures involve:

• Coinsurance or copayments

• Charges if the provider does not accept Medicare assignment

Assuming every preventive service is free could lead to surprise bills.

Planning With Medicare Misconceptions Can Be Risky

As you’ve seen, many widespread beliefs about Medicare turn out to be only partially true—or completely false. These assumptions can lead to gaps in coverage, higher costs, or limited access to care when you need it most.

To protect your health and your budget in 2025, it’s important to:

• Know what Medicare actually covers

• Enroll on time to avoid penalties

• Plan for out-of-pocket costs and supplemental coverage needs

• Review your options annually, especially during Open Enrollment

If you’re unsure about your current or future Medicare decisions, get in touch with a licensed agent listed on this website for professional guidance and peace of mind.