Enrolling in Medicare for the first time? 6 common oversights

If you’re turning 65 in a few months, you may be enrolling in Medicare for the first time.

And there’s a lot to consider to when protecting your health and your bottom line.

If you’re concerned about sifting through all the options and making decisions about enrolling in Medicare, you’re not alone.

In this article, you’ll learn more about:

Enrolling in Medicare for the first time, and…
6 common oversights to avoid when you sign up

Enrolling in Medicare for the first time

If you’re turning 65 soon, your Initial Enrollment Period (IEP) for Medicare will likely begin shortly. There’s a seven-month Medicare sign-up window that includes the:¹

Three months before your 65th birthday
The month of your birthday, and…
Three months after your 65th birthday

“Any time someone is approaching age 65, it’s a great idea for them to talk to a licensed insurance agent,” says Silas Jessup, HealthMarkets’ independent licensed insurance agent and executive sales leader in Indiana. “That’s true even if you’re still employed and plan to stay on your employer-based insurance.”

Enrolling in Medicare can feel a little overwhelming, because there are a lot of options to consider that ultimately have an impact on your health coverage and overall healthcare needs.

If you know someone on Medicare, they probably have a story or two about how signing up was not a walk in the park.

To make enrolling in Medicare a little easier, check out these 6 common oversights and how to avoid them.

1. You don’t know the ABCs… or Ds of Medicare

Medicare is the U.S. government’s national healthcare program for adults ages 65 and older.

It’s also for individuals with:²

Disabilities
End-Stage Renal Disease (ESRD)
ALS (also called Lou Gehrig’s disease.)

It’s divided into sections, each of which provides a certain type of coverage and is identified by a letter:

Medicare Part A

This is the part of Medicare everyone gets when they first sign up.³

You don’t have to pay a premium (or monthly bill) for it if you’ve been working and paying taxes for at least 10 years.
If you do not qualify for premium-free Part A, you can still sign up for it and pay monthly premiums.
Medicare Part A covers services such as in-patient hospital care, some skilled nursing care, and some home health care.

Medicare Part B

When you sign up for Medicare Part A, you also have the option to sign up for Part B, which covers medically necessary and preventive care.⁴

These types of health services include things such as doctor visits, preventive services (flu shots and specific vaccines, for example), ambulance services, and mental health services.
Most people will pay a monthly premium for Part B.

Medicare Part D

This part covers medications (yes, it’s separate).⁵
Medicare Part D will also cost you a monthly premium.

Medicare Part C

There’s a third letter of the Medicare alphabet—Medicare Part C.

These plans are also known as Medicare Advantage plans, and they’re the equivalent of coverage under Medicare parts A and B (also called Original Medicare).⁶
They usually include Part D
They may offer extra benefits, that Original Medicare Part A and Part B doesn’t cover, and individuals have come to use as part of their overall health care needs.
And you get them all in one plan. However, you may need to use the required networks, much like many employer-offered health plans.

Medicare Advantage plans are offered and administered through private insurance companies approved by Medicare, many with affordable monthly premiums.

In 2024, the average projected Medicare Advantage premium is just $18.50 per month, and many plans are available with no premium.⁷

2. Not comparing current coverage with Medicare options

Let’s say you turn 65 and you’re comfortable with the group health insurance plan that you’re already on through either your employer or your spouse’s. (Yes, you may still be working at age 65.)

If you have employer-offered insurance coverage, you don’t have to switch to Medicare right away. But you might find they could suit your healthcare needs and budget better.

“Sometimes group insurance is the better option, and other times Medicare can be a better solution,” says Jessup. “It all depends on your personal situation, the cost of the group insurance, and the benefits that are being provided. An insurance agent can help you decipher which coverage would be better for your individual circumstances.”

3. Skipping past the fine print

If you remain with Original Medicare, you’ll be getting Part A and likely Part B.

If you enroll in Part B, about 80% of your medical costs will be covered, says Jessup. That leaves you to pay for the other 20% of most services.⁸
Original Medicare has no out-of-pocket expense limits. Costs may add up depending on your healthcare needs

Check with your licensed insurance agent to learn about other plan options for expenses that Original Medicare does not cover.

4. Not checking if needed medication is covered on Medicare Part D or Medicare Advantage plans

If you’re taking multiple prescription medications, you’ll probably want to add coverage for that—that is, Medicare Part D.

All Medicare Part D plans must cover a wide range of prescription drugs, including most drugs in “protected classes” like those that treat cancer or HIV/AIDS.⁹
But before you sign up for a plan, you’ll want to make sure your prescriptions are on your plan’s list of covered drugs, which is called a formulary (each plan has its own).
Many plans place medications into different levels, called “tiers,” on their formularies. Drugs in each tier have a different cost, with lower tier ones usually costing you less than higher tier ones.

So, take some time to learn which of your prescriptions may be covered and the tiers they fall into. Having that information on hand will help you determine how much you’ll be spending on prescriptions.

5. Not understanding the Medicare Advantage plan’s out-of-pocket limits

In general, Medicare Advantage plans usually have a lower premium, but the out-of-pocket limits can be different from plan to plan, says Jessup.

Out-of-pocket costs can vary, but you won’t have to pay more than the out-of-pocket limit.
The government capped in-network limits at $8,850 in 2024.¹⁰
Medicare Advantage plans can have out-of-pocket limits below that maximum.

6. Not paying attention to Medicare deadlines

Remember: Your Medicare Initial Enrollment Period is only seven months. So, depending on when you sign up during the IEP, you’ll just need to pay attention to deadlines, based on where your 65th birthday falls.

You can sign up for Medicare starting three months before the month of your 65th birthday
You also have until three months after the month of your 65th birthday to enroll.
Or, if your birthday is on the first of the month, your seven-month window starts four months before the month you turn 65 and ends two months after.

Basically, your Medicare or Medicare Advantage coverage will start anywhere from one to three months after you sign up for it.

Late enrollment fees & penalties

If you miss your IEP, though, you’ll likely have to pay a late enrollment fee, which goes up the longer you wait to enroll.

For Part B, for example, it’s 10% of the premium—or your monthly payment—for every 12 months you delay.¹¹
The standard Medicare Part B premium for 2024 is $174.70, but it can change every year (and your penalty can too).¹² That can really add up.
There’s also a late penalty for Medicare Part D. It’s equal to 1% of the national base beneficiary premium times the number of months that you didn’t have Part D or other qualified continuous coverage.¹³

If you don’t have a qualifying plan, late enrollment can also mean you could have some serious gaps in coverage. Keep track of your deadlines. They could end up helping you avoid late penalties and ensure you have the coverage options you need

Receiving Social Security?

You’re automatically enrolled in Medicare Parts A & B.

If you’re receiving Social Security benefits, you don’t have to worry about enrolling in Medicare.

Why? If you’ve been receiving Social Security benefits for at least four months before you turn 65, you’ll be automatically enrolled in Medicare Parts A and B.

Looking for the right Medicare plan to fit your lifestyle?

We can help. Give us a call at (800) 827-9990 8 a.m. to 8 p.m. Monday – Friday ET to talk with a licensed health insurance agent or find one in your area to schedule an appointment.