Five Common Medicare Mistakes to Avoid

Choosing a Medicare plan isn't always straightforward. With so many rules, deadlines, and options, it's easy to make a mistake that can cost you money, or even cause gaps in your coverage. At Prairie Grove Insurance, we've guided countless people through Medicare and have often seen the same avoidable mistakes made before they found us. 
Here are five common (and costly) Medicare mistakes - and tips to make sure you don't fall into the same traps.

1. Missing Your Enrollment Deadlines

Medicare has specific enrollment periods that determine when you can enroll, change, or disenroll from certain coverages. Familiarizing yourself with these periods can help you avoid late penalties, unexpected medical bills, and countless headaches.

Many people assume they can sign up for Medicare whenever they want after turning 65. Unfortunately, missing your Initial Enrollment Period (IEP) can lead to late enrollment penalties that you may have to pay for as long as you have Medicare.

As you approach the age of 65, you will encounter the first and most important of these periods, known as your Initial Enrollment Period. Your IEP is a 7-month period that starts three months before your 65th birthday, continues the month of your birthday and ends three months after.

Example: If your 65th birthday is in June, your IEP runs from March 1st through September 30th. If you are working past the age of 65 with employer coverage, understand the Special Enrollment Period rules to avoid penalties (give us a call if you need some help figuring this out).

If you don't sign up during your IEP (and you don't have other qualifying coverage like employer insurance), you could face late enrollment penalties that may last as long as you have Medicare. Missing this period can also cause a delay in your coverage start date, leaving you without health insurance for a period of time.

During your IEP, you can enroll in Part A (Hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage, if you enroll in both Parts A and B), and Part D (Prescription Drug Coverage).

2. Choosing the Wrong Part D Prescription Drug Plan

One of the most common Medicare mistakes is choosing a Part D prescription drug plan without carefully comparing options. Many people assume all drug plans are similar, or they pick the plan with the lowest premium, only to discover later that it doesn't adequately cover their prescriptions.

This mistake can result in hundreds or even thousands of dollars in unnecessary out-of-pocket costs each year. Every Part D plan has its own formulary (the list of covered drugs), tiers (which affect copays), and preferred pharmacies. A plan that looks inexpensive on paper might leave you paying significantly more if your specific medications aren't well covered - or if the plan's preferred pharmacy network isn't convenient for you.
 
To avoid this mistake, Review your medications each year. During the Annual Enrollment Period (Oct 15th - Dec 7th), enter your prescriptions into Medicare's Plan Finder tool or work with a licensed agent to compare all available plans. Prairie Grove Insurance can help you with this at no cost to you.

When reviewing plans, be sure to look at the total annual cost, not just the premium. This includes deductibles, copays, and coinsurance for your specific drugs. Check pharmacy networks. Costs can be dramatically lower at a preferred pharmacy. Be aware of restrictions. Some plans require prior authorization, step therapy, or quantity limits. These rules can impact access to your medications. Get help if needed. An experienced Medicare agent can run comparisons side by side and help ensure you're in the most cost effective plan for your needs. Choosing the wrong Part D plan can be an expensive mistake, reviewing your prescriptions every year is the best way to make sure you are not overpaying.

3. Not Understanding How Medicare Works in Your State

Another big Medicare mistake that we see is when people assume that Medicare works the same everywhere in the country. While Original Medicare (Parts A and B) is federal and works the same in every state, the Medicare Supplement (Medigap) rules are different in Wisconsin, Minnesota, and Massachusetts. If you live in Wisconsin, your Medigap choices look very different from what you may read about online or hear from a national call center.

In most states, Medigap plans are standardized into lettered plans like Plan G, Plan N, or Plan F. These letters mean the same thing no matter where you live. But in Wisconsin, things are structured differently. Wisconsin has a Basic Plan that covers the core benefits, and then you can add optional riders to customize your coverage. There are also 50% and 25% cost-sharing plans and a high-deductible plan. Wisconsin law also requires certain benefits that aren't included in other states' standardized plans, such as home health care, chiropractic care, and certain preventive services. 

It's very common for people in Wisconsin to search online or talk to an out-of-state agent, only to walk away with incomplete or even misleading information. For example, an article might say "Plan G is the most popular Medigap plan." That's true nationally, but there is no Plan G in Wisconsin. A call center agent might compare only Advantage Plans or drug plans, without explaining how Wisconsin's Medigap system allows you to customize coverage. People moving here from another state often assume they can't just "switch to a Plan G," only to find out Wisconsin doesn't use that system. When this happens, many beneficiaries miss out on better coverage or end up paying more than necessary.

The good news is that once you understand Wisconsin's unique rules, it's possible to get a Medigap plan that's tailored to your exact needs. Work with a Wisconsin based Medicare expert. Someone who specializes in our state's system can explain the difference and walk you through side-by-side comparisons. Review all available options. Since riders can be added to the Basic Plan, you want to make sure you are not overlooking benefits that matter to you. Be cautious with national advice. If you see an article or ad that talks about "Plan G" or "Plan N" remember - that doesn't apply in Wisconsin. Revisit your choices periodically. Your needs change over time, and Wisconsin's Medigap flexibility means you can often adjust coverage to better fit your situation.

Medicare supplements in Wisconsin follow a unique set of rules that most out-of-state agents and generic websites won't explain. The smartest move you can make is to work with someone local who understands the Wisconsin system and can help you choose the best fit for your health and budget.

4. Overlooking Out-of-Pocket Costs

When choosing a plan, it's easy to zero in on the monthly premium, the amount you'll pay each month just to keep your coverage active. While premiums are important, they're only one piece of the puzzle. Many people overlook out-of-pocket costs like deductibles, copayments, coinsurance and the maximum out-of-pocket limit, which can have a much bigger impact on your budget once you actually start using your coverage.

Let's discuss this to give you a better understanding of what these terms mean.
A deductible is the amount you pay before your insurance begins covering certain services. A low premium plan may have a very high deductible, meaning you could spend thousands before coverage really kicks in.
Copayments are the flat fees you pay for services like doctor visits or prescriptions. They may seem small individually, but can add up quickly if you need frequent care.
Coinsurance is the percentage of costs you're responsible for after meeting your deductible. For example, with 20% coinsurance, a $1,000 procedure could still cost you $200 out of pocket.
Maximum Out-of-Pocket (MOOP) limit is the most you'll pay in a year before your insurance covers 100% of your care. It's a safeguard, but depending on your plan, this number can be quite high.

A low monthly premium might look attractive upfront, but it often means higher deductibles and cost-sharing. If you only look at the premium, you could be caught off guard when a hospital visit or ongoing prescriptions result in significant bills. Conversely, a higher premium plan might save you money overall if you need regular care or have a chronic condition, because your deductible and cost-sharing will likely be lower.

Instead of asking only how much the plan will cost you each month, ask:
How much might you realistically spend in a year considering your health needs?
What would it cost if you had an unexpected surgery or hospital stay?
Where does the plan's MOOP limit fall compared to others?

A good practice is to run a few "what if" scenarios. Estimate your total annual costs under each plan option, factoring in premiums plus potential out-of-pocket expenses. This broader view can help you choose coverage that balances both affordability and protection.


5. Assuming You're Stuck with Your First Choice

A final common Medicare mistake that we want to cover is believing that the plan you choose at the start is the plan you're locked into forever. Many beneficiaries assume they are "stuck," which can prevent them from finding better coverage as their needs change. The truth is, you do have options to make changes, but there are rules and timeframes you'll need to follow.

This is a costly assumption because your health, prescription drug needs, and even your finances can change from year to year. On top of that, Medicare plans themselves change annually. Premiums, copays, deductibles, provider networks, and prescription formularies are updated each calendar year. Sticking with the same plan without reviewing it can lead to higher costs, limited provider access, or gaps in coverage.

Medicare gives you specific time of year (and sometimes special circumstances) to switch or update your plan:
The Annual Election Period (AEP): October 15 - December 7. This is when most beneficiaries review and make changes for the upcoming year.
Open Enrollment Period (OEP): January 1 - March 31. If you're already in a Medicare Advantage plan, you can switch to a different Advantage plan or go back to Original Medicare.
Special Enrollment Periods (SEPs): Life changes such as moving to a new area, losing employer coverage, or qualifying for Extra Help may allow you to make changes outside of the standard windows.

Even if your plan seems to be working fine, it's important to compare it annually. For your prescription drugs, formularies (the list of covered medications) can change, meaning a drug that was affordable this year may cost more next year. Provider networks can also change, you doctor or preferred hospital could drop out of a Medicare Advantage plan's network. Costs can change as well. Premiums, deductibles, and copays are adjusted every year. Some plans may add new perks such as dental, vision, hearing, or fitness coverage.

Medicare can be confusing, but costly mistakes can be avoided with the right guidance. At Prairie Grove Insurance, we take an educational, no-pressure approach, helping you understand your choices so you can make the best decision for your health and budget.

​To Get Help Now, Call Our Office!

​Rob and Carrie Davies
Prairie Grove Insurance
800-254-5200
​608-839-0275