Key Takeaways

• Missing Medicare enrollment deadlines can result in lifelong penalties and gaps in coverage that may not be easy to fix later.

• Understanding when and how to enroll—based on your work history, age, and current insurance—is essential to avoid these expensive and avoidable mistakes.

Not Everyone Is Automatically Enrolled—You Might Need to Act

One of the most common misconceptions about Medicare is assuming that enrollment is automatic for everyone at age 65. This only applies if you’re already receiving Social Security or Railroad Retirement Board benefits before turning 65. In that case, you’re usually auto-enrolled in both Part A and Part B.

But if you’re not drawing Social Security, you must actively enroll during your Initial Enrollment Period (IEP). Missing this window could mean delays and penalties.

Know Your Enrollment Windows

Medicare isn’t like employer health plans with rolling enrollment. It follows strict timelines:

• Initial Enrollment Period (IEP): Begins three months before your 65th birthday, includes your birthday month, and ends three months after. This seven-month window is your first chance to enroll.

• General Enrollment Period (GEP): Runs from January 1 to March 31 each year for those who missed their IEP. Coverage starts July 1, and penalties may apply.

• Special Enrollment Periods (SEPs): Offered if you delay enrollment because you had creditable coverage (such as employer insurance). SEPs vary in timing depending on your situation.

• Annual Enrollment Period (AEP): October 15 to December 7 every year. This is for making changes to your existing Medicare coverage, not for first-time enrollment.

Missing your IEP without qualifying for an SEP often leads to delays and financial penalties that last for as long as you have Medicare.

Late Enrollment Penalties Don’t Expire

One of the costliest mistakes is missing the IEP and having no valid excuse. If this happens, you may face permanent late enrollment penalties:

• Part B Penalty: 10% added to your premium for every 12 months you were eligible but not enrolled. This charge remains for as long as you have Part B.

• Part D Penalty: Calculated by multiplying 1% of the national base beneficiary premium by the number of full, uncovered months you were eligible and didn’t have creditable prescription drug coverage. This is also lifelong.

These penalties can add up quickly and last indefinitely—so waiting costs more than just time.

Assuming Employer Coverage Will Protect You Could Backfire

Many people delay Medicare enrollment because they’re still working past 65 and have employer-sponsored health coverage. While that can be valid, it only works under specific conditions:

• The employer must have 20 or more employees for the coverage to be considered creditable.

• If you’re covered under your spouse’s plan, the same rules apply.

If the employer has fewer than 20 employees or the plan isn’t considered creditable, you need to enroll in Medicare during your IEP. Otherwise, you’ll likely pay late penalties and risk a gap in coverage.

Signing Up for the Wrong Parts Can Also Hurt

Medicare has multiple parts, and confusion around them is common:

• Part A covers inpatient hospital stays and is usually premium-free if you worked and paid Medicare taxes for at least 10 years.

• Part B covers outpatient services and has a standard monthly premium.

• Part D covers prescription drugs but isn’t automatic; you must enroll separately or choose a plan that includes drug coverage.

You might think you don’t need Part B if you’re healthy or Part D if you’re not on any prescriptions, but skipping these can lead to permanent penalties and delayed access when you do need care.

Waiting Until You Need Care Is a Serious Error

Healthcare needs can arise unexpectedly, and Medicare coverage doesn’t begin immediately after enrollment. For example:

• Enrolling during the last month of your IEP can delay your coverage start date by up to two months.

• Enrolling during the General Enrollment Period means your coverage doesn’t begin until July 1, no matter when you apply between January and March.

That means going without coverage for months, exposing yourself to high medical bills and out-of-pocket costs.

Assuming Retiree or COBRA Coverage Extends Your Time to Enroll

Retiree insurance or COBRA does not count as creditable coverage when it comes to delaying Medicare Part B or Part D. Many people think they can delay enrolling in Medicare until COBRA ends—but this is not true.

If you rely on COBRA or retiree coverage instead of enrolling in Medicare during your IEP, you will face the same late enrollment penalties and delays as someone who had no coverage at all.

Overlooking Part D Can Be Costly, Even If You Don’t Take Medication

Prescription drug coverage through Part D is easy to overlook, especially if you’re not currently taking medications. But skipping it means you may face:

• Higher out-of-pocket drug costs later

• A permanent monthly penalty once you do enroll

• Limited choices if you miss the enrollment window

You can avoid this by enrolling in a Part D plan when you’re first eligible—even if it’s a basic option—to maintain creditable coverage and avoid penalties.

Misunderstanding Special Enrollment Periods Can Delay Coverage

If you qualify for a Special Enrollment Period due to loss of employer coverage or other life events, it’s crucial to act quickly. The SEP usually lasts 8 months after the loss of coverage.

However, delaying action during that period or assuming you can sign up anytime leads to:

• Delayed coverage start dates

• Gaps in drug coverage

• Permanent penalties for Part B and Part D

Being proactive during your SEP ensures you keep continuous coverage and avoid long-term costs.

Thinking You Can Enroll Anytime After 65 Is a Costly Myth

Many assume Medicare works like standard insurance—you can just sign up when you need it. But Medicare doesn’t work that way.

Unless you qualify for a Special Enrollment Period, the General Enrollment Period (January 1 to March 31) may be your only chance to enroll if you miss your IEP. Coverage will then start on July 1, meaning you could go uninsured for months. That’s not only financially risky—it could be dangerous to your health.

Making Changes Without Understanding the Annual Enrollment Period

Even if you enrolled correctly the first time, it’s still possible to make costly errors by misunderstanding what can and can’t be done during the Annual Enrollment Period (October 15 – December 7).

During AEP, you can:

• Switch from Original Medicare to a Medicare Advantage plan or vice versa

• Change Medicare Advantage plans

• Add or drop a Part D plan

But making these changes without reviewing your current coverage, projected health needs, and medication list could mean higher costs or reduced coverage next year.

Missing the Chance to Reevaluate Coverage Every Year

Your health, medications, and budget might change year to year. Medicare plans also change—premiums, drug formularies, provider networks, and out-of-pocket costs may all shift annually.

Failing to review your options during AEP might result in:

• Staying in a plan that no longer fits your needs

• Paying more than necessary

• Missing out on better benefits

Make it a habit to review your coverage every year and compare it against your current situation.

Misjudging the Impact of Income on Medicare Premiums

If your income is higher than a certain threshold, you’ll pay an Income-Related Monthly Adjustment Amount (IRMAA) for Part B and Part D. This is based on your tax return from two years prior.

For example, in 2025, IRMAA applies if your individual income exceeded $106,000 (or $212,000 for joint filers) in 2023.

Failing to prepare for these higher costs can affect your retirement budget. If you experience a life-changing event (like retirement or loss of income), you can request a reconsideration with Social Security.

You Have One Shot to Get Enrollment Right—Plan Ahead

Medicare enrollment is not as flexible as many people expect. The timelines are strict, the penalties are long-lasting, and the wrong assumptions can lead to years of unnecessary expenses. Being prepared ahead of time—and reviewing your coverage annually—is the best way to avoid regrets.

Ready to Avoid These Mistakes? Speak to an Expert

These Medicare enrollment missteps can cost you for years, but they’re avoidable with the right information and support. Whether you’re approaching 65 or reviewing your current plan during the Annual Enrollment Period, a licensed agent listed on this website can help guide you through your options.

Make sure your enrollment is timely, accurate, and tailored to your needs—because getting Medicare right the first time is far less expensive than fixing it later.