Any of These Common Medicare Mistakes Could Cost You -- Big

If you're nearing 65, here's a word of warning: Medicare is confusing! There are so many options and so many price points that it's tough to keep them all straight without a spreadsheet. Even then, the amount of information thrown your way can be too much to absorb at one time. As a quick review, here are the four primary parts of Medicare and what they cover:

• Part A: Hospitalization. This includes inpatient hospital stays, skilled nursing facilities, hospice, and some home healthcare. Free for those who paid into the system through Medicare tax deductions from their paychecks.
• Part B: Outpatient care. Covers doctor visits, preventative services, and durable medical equipment. Requires a monthly premium.
• Part C: Medicare Advantage. This is a private alternative to Original Medicare that typically bundles Parts A, B, and D. Plans may provide benefits not covered by Original Medicare, like dental, vision, and hearing.
• Part D: Prescription drug coverage.

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Given the importance of healthcare in retirement, it's scary how easy it is to make mistakes. That's why it's so important to know where others go wrong and how you can avoid their expensive missteps.

Assuming you're automatically enrolled

Yes, the government knows you're turning 65, but no, it doesn't necessarily enroll you in Medicare automatically. Most of the time, those already receiving Social Security get automatically enrolled for Medicare Parts A and B. But if you haven't yet claimed, or if you want other types of coverage, you may have to take care of the task on your own.

Failure to do so is one of the most expensive mistakes you can make, and here's why: You have a seven-month window to sign up. The window includes three months before you turn 65, your birthday month, and three months after you turn 65. If you're not covered by a qualifying employer plan and fail to sign up, you'll face late enrollment penalties that last the rest of your life.

For example, failure to enroll in Medicare Part B could result in a 10% penalty for each year you go without Part B after you're eligible. For example, imagine that you spend two years traveling the globe and forget to enroll in Part B. In 2026, most people pay a standard Part B monthly premium of $202.90. Enrolling two years after you're required to would mean a premium of $243.48 instead.

What to do: Mark it on your calendar. Even if you're nowhere near 65, go ahead and mark your calendar so you won't forget your future enrollment window.

Not reviewing your plan annually

It's vital to review your Medicare plans if you want to keep your costs down. Part of planning for retirement (and living in retirement) is controlling costs where you can, and Medicare is one such area.

Many Medicare plans, particularly those under Medicare Advantage, change annually. Everything, from premiums to coverage and provider networks, can shift dramatically. Simply sticking with your current plan could result in higher-than-expected medication costs, premium increases you didn't budget for, and your preferred providers leaving the network.

What to do: the annual Medicare enrollment period runs from Oct. 15 through Dec. 7. Set aside time to review your plan's Annual Notice of Change and compare it with other options available in your area. You have every right to change plans when you find one that better fits your needs.

Assuming Medicare covers everything

Many beneficiaries are surprised to learn how many products and services Medicare doesn't cover. They include dental care, vision, hearing aids, and long-term care. Not planning for these expenses can put a kink in the best-laid retirement withdrawal strategy by causing you to withdraw money from retirement accounts when you didn't plan to.

What to do: Understand what Medicare doesn't cover and consider supplement coverage, such as Medigap or a Medicare Advantage plan that includes services not covered by Original Medicare.

Medicare is an invaluable tool as you age, but it's not without its quirks. Fortunately, you can make the most of it by learning as much as possible about how it works before you require coverage.

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