Medicare can cover a significant share of health care expenses after 65, but it doesn't cover every service or protect people from every large medical expense. Some of the costliest problems come from missing enrollment periods, misunderstanding what Original Medicare covers, choosing a plan without checking its rules, or overlooking income-based premium adjustments.
Some mistakes can raise premiums for years. Others can leave retirees responsible for expenses Medicare generally doesn't cover. Knowing which risks are tied to deadlines and which require separate financial planning can help prevent an expensive surprise.
1. Long-Term Care Can Leave You With a Large Bill
One of the biggest Medicare coverage gaps involves long-term care.
Medicare generally doesn't pay for long-term custodial care when that is the only type of care a person needs. Custodial care includes help with everyday activities such as bathing, dressing, and eating.
That rule is different from Medicare's coverage of skilled nursing facility care. Part A may cover eligible short-term skilled nursing or rehabilitation care in a Medicare-certified facility when Medicare's requirements are met. Coverage can last up to 100 days per benefit period, but eligibility and cost-sharing rules apply.
Someone planning for retirement therefore shouldn't assume Medicare will fund an extended nursing-home stay. Potential long-term care expenses need to be addressed separately through savings, insurance when appropriate, Medicaid for people who qualify, or other resources.
The distinction matters: Medicare can help with certain skilled medical care, while extended assistance with everyday living is generally outside its coverage.
2. Missing Part B Enrollment Can Increase Your Premium
Signing up for Medicare Part B at the right time can prevent a late-enrollment penalty.
For 2026, the standard Part B premium is $202.90 per month. If you don't enroll when you're eligible and don't qualify for a Special Enrollment Period, the late-enrollment penalty generally adds 10% to the standard premium for each full 12-month period you could have had Part B but didn't. The penalty generally continues for as long as you have Part B.
For example, one full 12-month period without Part B could produce a 10% penalty. Using the 2026 standard premium, that would equal $20.29 per month before accounting for future changes in the standard premium.
Not everyone needs to enroll in Part B immediately at 65. People with qualifying job-based health coverage may be eligible for a Special Enrollment Period and avoid the penalty. That's why the first question shouldn't simply be, “Am I 65?” It should be, “When does Medicare require me to enroll based on my current coverage?”
People receiving Social Security benefits may also be automatically enrolled in Medicare rather than having to complete the standard sign-up process themselves.
3. Going Without Creditable Drug Coverage Can Trigger a Part D Penalty
Part D has a separate late-enrollment rule.
You can generally delay Medicare drug coverage without a Part D late-enrollment penalty when you have other creditable prescription drug coverage. Medicare defines creditable drug coverage as coverage expected to pay, on average, at least as much as Medicare's standard drug coverage. Employer, union, VA, TRICARE, and certain other coverage may qualify.
Problems can begin when someone goes 63 consecutive days or longer without Medicare drug coverage or other creditable prescription coverage after becoming eligible.
For 2026, the national base beneficiary premium used to calculate the penalty is $38.99. The penalty generally equals 1% of that amount for every full uncovered month, rounded to the nearest 10 cents. It is generally added to the monthly premium for as long as the person has Medicare drug coverage. Because the national base beneficiary premium can change, the dollar value of the penalty can change too.
Keep notices showing that employer or other prescription coverage is creditable. Those records may become important when enrolling in Part D later.
| Part B | Part D | |
|---|---|---|
| Main trigger | Delaying enrollment without qualifying for an exception or Special Enrollment Period | Going 63 consecutive days or longer without Medicare drug coverage or other creditable drug coverage |
| Penalty calculation | Generally 10% for each full 12-month period without Part B | Generally 1% of the national base beneficiary premium for each full uncovered month |
| Duration | Generally for as long as you have Part B | Generally for as long as you have Medicare drug coverage |
| 2026 figure used in calculation | $202.90 standard Part B premium | $38.99 national base beneficiary premium |
4. Original Medicare Doesn't Cover Every Health Care Expense
Enrollment penalties aren't the only expenses to plan for. Original Medicare itself has coverage gaps.
Original Medicare generally doesn't cover routine eye exams for glasses or contacts, most routine dental care, hearing aids and related fitting exams, or long-term custodial care. Some services may be covered under specific medical circumstances.
For example, Medicare can cover certain dental services when they're closely connected with covered medical treatment. That doesn't mean Original Medicare provides routine dental insurance.
Medicare Advantage plans may include certain dental, hearing, or vision benefits that Original Medicare doesn't provide, although benefits and rules differ by plan.
Before retirement, estimate expenses for services your coverage may exclude instead of assuming Medicare will function exactly like an employer health plan.
5. Missing Your Medigap Open Enrollment Period Can Limit Your Options
People choosing Original Medicare may buy Medicare Supplement Insurance, commonly called Medigap, to help pay certain out-of-pocket expenses.
Timing matters.
Under federal rules, the Medigap Open Enrollment Period lasts six months. It begins the first month you're 65 or older and enrolled in Medicare Part B. During this period, insurers generally can't use medical underwriting to deny you a Medigap policy they sell or charge you a higher premium because of pre-existing health problems.
After this one-time period ends, your options can become narrower. Depending on your circumstances and applicable protections, you might be unable to buy a particular policy or could pay a higher price.
State rules can provide additional Medigap protections, so people considering a policy should check the rules that apply where they live.
Unlike Medicare's yearly Open Enrollment Period, the federal Medigap Open Enrollment Period generally doesn't return every year.
6. Medicare Advantage Networks Can Change What You Pay
Medicare Advantage plans are provided by private insurers and must cover the medically necessary services covered by Original Medicare. Plans can have their own provider networks, cost structures, and prior-authorization requirements.
Network rules depend on the type of Medicare Advantage plan.
An HMO generally requires members to use network providers except for circumstances such as emergency care, out-of-area urgent care, and temporary out-of-area dialysis. Some HMO point-of-service plans allow certain out-of-network services at a higher cost.
A PPO generally permits members to receive covered services from out-of-network providers, although the patient usually pays a higher share of the cost. Emergency and urgent care remain covered.
Before joining a plan, check whether your doctors, hospitals, pharmacies, and medications fit its rules. Confirm important coverage details directly with the plan, especially before receiving expensive non-emergency care.
7. Medicare Has Different Annual Enrollment Periods
Medicare has several enrollment periods, and confusing them can lead to missed opportunities.
The main Medicare Open Enrollment Period runs from October 15 through December 7 each year. During this period, eligible beneficiaries can make changes such as switching Medicare Advantage plans, moving between Original Medicare and Medicare Advantage, or changing Medicare drug coverage. Changes generally take effect January 1.
The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 for people already enrolled in Medicare Advantage. During that period, an enrollee can generally make one change: switch to another Medicare Advantage plan or return to Original Medicare and, when applicable, join a separate drug plan.
Certain events, including moving or losing other coverage, can trigger a Special Enrollment Period. The available changes and deadlines depend on the event.
Even if you're satisfied with your current plan, reviewing coverage annually can help identify changes in provider networks, prescriptions, costs, and benefits before the next plan year begins.
8. Higher Income Can Raise Part B and Part D Costs
Some Medicare beneficiaries pay an income-related monthly adjustment amount, or IRMAA, in addition to their regular Part B and Part D premiums.
IRMAA is generally determined using modified adjusted gross income reported to the IRS two years before the premium year. That delay can create a mismatch for someone whose income has fallen substantially since retiring.
For 2026, the standard Part B premium is $202.90. For beneficiaries subject to IRMAA, total monthly Part B premiums range from $284.10 to $689.90, depending on income and tax-filing status. For most individual filers, the first 2026 IRMAA tier begins when 2024 modified adjusted gross income exceeds $109,000; for most married couples filing jointly, it begins above $218,000. Different thresholds apply to certain married people filing separately.
Part D can also carry an income-related adjustment.
Because IRMAA looks backward at tax information, someone who recently retired may receive a surcharge based on income earned while still working.
9. A Lower Income After a Life-Changing Event May Reduce IRMAA
An IRMAA determination doesn't always have to remain based on older income information.
If you've experienced a qualifying life-changing event that reduced household income, Social Security allows you to request a lower IRMAA using newer income information. Examples include marriage, divorce, death of a spouse, and certain losses of income.
Social Security may require evidence of the event and information supporting the lower modified adjusted gross income. Form SSA-44 can be used to request a new determination after an eligible life-changing event.
For someone retiring from a high-paying job, checking an IRMAA notice against current circumstances can therefore be worth doing before simply accepting the higher premium.
Which Medicare Mistakes Deserve Attention First?
The Medicare risks in this article fall into three groups.
First, protect your enrollment dates. Part B and Part D delays can create penalties that generally continue for as long as you carry the affected coverage. The Medigap Open Enrollment Period also deserves attention because federal protections are strongest during that one-time six-month period.
Second, budget for coverage gaps. Original Medicare doesn't pay for every health-related expense, and long-term custodial care can create a particularly large financial exposure. Dental, routine vision, hearing, and other uncovered services should also be accounted for when estimating retirement health costs.
Third, review your coverage and premiums each year. Medicare Advantage networks and benefits can change, annual enrollment periods create opportunities to change plans, and IRMAA can increase premiums for higher-income beneficiaries.
Medicare rules and dollar amounts can change from year to year. Before making an enrollment or coverage decision, verify the dates, premiums, plan rules, and eligibility requirements that apply to you for that year.
