7 Medicare Enrollment Mistakes That Can Trigger Lifetime Penalties

Whether you're still preparing for retirement or you've already exited the workforce, you're always looking for ways to stretch your retirement dollars further.

Medicare, which is the government-sponsored health insurance available to seniors 65+, can help you spend less money on health care in your golden years. However, just a few critical errors can increase your health care costs under Medicare, not just for a month or a year, but for the rest of your life.

Keep reading to learn which errors result in lifelong penalties and get tips on how to steer clear.

Your initial enrollment period for Medicare Parts A and B starts three months before your 65th birthday and ends three months after your birth month. If you don't sign up for Medicare Part B during this seven-month period, you'll be subject to a penalty charge of an extra 10% on your monthly premium for every 12-month period in which you lacked Medicare. (Most people do not pay a premium for Medicare Part A).

The 2025 Part B premium is $185 per month, so if you went 24 months without signing up, you'll pay an additional $37 a month, which comes to $444 a year. The extra charge lasts for the rest of your life.

Medicare Part D, which helps you pay for prescription drugs, also has a monthly premium and a lifetime late-enrollment fee. The penalty is 1% for every month you go without prescription drug coverage, and the exact number is calculated based on the year's national base beneficiary premium, which is $36.78 for the 2025 tax year.

For instance, if you signed up for Medicare Part D 14 months after your initial enrollment period, your monthly fee will be 14% of $36.78, or $5.15. Numbers are rounded up to the next-highest $0.15, so you'll pay an additional $5.20 per month (or $62.40 per year) on top of your premium for the rest of your life.

If you're already receiving Social Security benefits by the time you turn 65, you'll be automatically enrolled in Medicare without having to miss a beat. But everyone else must sign up by hand. Assuming you're already registered won't exempt you from having to pay your lifelong missed enrollment period penalty.

You can push back your Medicare Part D enrollment deadline by providing evidence that you already have creditable drug coverage through your workplace or a private plan.

The coverage must also cost at least the same amount as a Medicare Part D plan does. If you're part of a qualifying plan, you'll receive notice of that fact from your employer so you can contact the SSA and submit proof of creditable coverage before you turn 65.

However, forgetting to submit the proper documentation on time results in the same 1% penalty as missing your enrollment period does. You'll also face penalties if you lose your work insurance and fail to secure new drug coverage or enroll in Medicare Part D within 62 days.

If you lost your job unexpectedly but want to stay on your employer's health insurance plan, you can usually get COBRA insurance, which maintains your coverage for several months as long as you pay the full premium.

However, if you enroll in COBRA after you turn 65, meaning you qualify for Medicare coverage, COBRA will pay for a reduced percentage of your health care costs, and you could end up paying almost entirely out of pocket.

Plus, if you lose COBRA coverage and fail to sign up for Medicare before your enrollment period ends, you could pay the lifelong 10% premium penalty.

If you're on your partner's work-sponsored insurance when you turn 65, you might be able to delay your Medicare signup without penalty. However, some businesses don't offer coverage to their employees' spouses once they're eligible for Medicare. Assuming you're covered when you aren't will result in paying that lifelong 10% premium penalty.

Depending on how many years you spent in the workforce, you might not have to pay a monthly Medicare Part A premium. However, if you or your spouse spent less than 10 years paying into the Medicare system, you'll be charged a monthly premium of $518 per month for the 2025 tax year. You'll also be charged an extra 10% per month if you're late signing up, which is $51.80 a month or $621.60 per year.

This penalty isn't quite lifelong, but it does last twice the number of years you went without coverage. For example, if you skipped signing up for two years, you'll pay the $51.80 monthly penalty for four years. The number could vary from year to year if premiums increase.

Taking the time to learn the ins and outs of Medicare will do more than help you keep more retirement savings in your wallet. It can also help you enjoy a stress-free retirement by lowering your anxiety around paying for health care treatments.

Consider adding key Medicare deadlines to your calendar to avoid missing enrollment dates and protect your financial resources.