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9 Medicare Mistakes People Make in Their 60s (These Can Cost You $50,000+)

Getting familiar with Medicare early can save you thousands of dollars down the road.

By Michelle Smith

Edited by Chris Kissell

Updated July 8, 2025

As you enter your 60s, you're getting closer to retirement. It's more important than ever to double down on your financial fitness.

You're eligible to sign up for Medicare at 65, and if you aren't careful, you could make costly errors that could cost you $50,000 or more. Get familiar with these costly Medicare mistakes so you can steer clear of them.

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1. Not realizing that late enrollment penalties for Medicare Part B last for life

You can enroll in Medicare Part A (hospital insurance) and Part B (medical insurance) starting three months before you turn 65.

If you have insurance through an employer, you can defer Medicare enrollment without penalties. But if you don't have such coverage and fail to sign up for Medicare Part B on time, you'll be subject to a lifelong late fee of 10% of the monthly premium for each year you delay signing up.

For instance, if you were two years late to sign up for Medicare Part B, your premium will cost 20% more than the standard payment for the rest of your life.

The standard 2025 Part B premium is $185, although some people pay more. So, most folks in this situation who face a 20% penalty would owe an extra $37 a month, bringing their total monthly premium amount to $222.

That's an extra $444 this year alone. As Part B premiums increase, your extra annual costs will too. Over a 30-year retirement, you could end up paying a total of $15,000 or more for such a mistake.

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2. Falsely believing you will have no out-of-pocket expenses

Just like most types of private insurance, Medicare comes with premiums, deductibles, and out-of-pocket costs.

For 2025, the Medicare Part A deductible is $1,676 while the Medicare Part B deductible is $257.

That means you should budget for spending a minimum of $1,933 on out-of-pocket costs for both plans. And remember, that is on top of the $185 monthly premium for Medicare Part B.

3. Failing to shop around for the best deal on Medicare Advantage

Medicare Advantage plans — sometimes called Medicare Part C — are private insurance plans that offer Medicare coverage. Many Medicare Advantage plans lack a premium, but they still come with deductibles, copayments, and coinsurance payments.

By law, Medicare Advantage plans have to cap out-of-pocket costs at $9,350. While it's good to have a ceiling on your costs, that is still a lot of money.

If you fail to shop around and instead end up choosing a plan that passes on a lot of costs to its policyholders, you might spend thousands more every year than you need to.

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4. Delaying Medicare enrollment when you work for a small company

Even if you're still working and using your company's health insurance at age 65, you might not be able to delay Medicare enrollment if your company employs fewer than 20 people.

That is because with companies of this size, Medicare is generally the worker's primary coverage, with the employer's coverage taking on a secondary role.

That means if you incorrectly assume you can defer Medicare coverage and fail to sign up on time, you might end up paying to cover costs that Medicare would have covered had you enrolled.

That could mean thousands of dollars in out-of-pocket expenses.

5. Procrastinating during the Part D two-month enrollment period

Medicare Part D gives you prescription drug coverage. If you don't enroll in Part D during the initial enrollment period — which lasts from three months before and three months after the month of your 65th birthday — your premium will cost an additional 1% for each month in which you fail to sign up.

The 1% calculation is based on the national base beneficiary premium, which is $36.78 in 2025. So, if you delayed Part D enrollment for two years (24 months), you'll pay a 24% monthly penalty this year, or an extra $8.83 per month on top of your regular Part D premium. In one year, that's an extra $105.96.

This is another fee that could increase over time as the national base beneficiary premium increases.

6. Going to out-of-network doctors when you have Medicare Advantage

The traditional Medicare program — known as Original Medicare — doesn't limit you to seeing physicians within a certain network. On the other hand, most Medicare Advantage plans do have such restrictions.

As you may already know, if you're on a private insurance plan, seeing an out-of-network doctor can easily cost you thousands of dollars out of pocket in many plans.

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7. Delaying getting Medigap coverage

Medigap coverage is private insurance coverage that can help you pay for expenses that Medicare does not cover. It is important to sign up for this coverage at the right time.

If you don't choose Medigap coverage within six months of signing up for Medicare Part B, private insurers can deny you coverage based on pre-existing conditions.

Such an expensive mistake can make it difficult to secure any time of Medigap coverage, leaving you to pay out of pocket for Medicare's coinsurance, copayment, and other costs.

8. Not checking your Medicare Advantage plan's formulary

Not all Medicare Part D plans cover every medication. You need to consult your plan's formulary — or list of covered medications — to make sure all your current medications are covered.

Otherwise, you'll end up paying the manufacturer's pricing out of pocket. Depending on the drug, that could be anywhere from a few dollars to hundreds of dollars per month for your drugs.

9. Thinking Medicare covers long-term care

Medicare and Medigap plans do not cover most long-term care. In 2025, the median cost of a private nursing room home comes to $9,555 per month — or $114,665 per year, according to Genworth.

If you don't plan for these costs ahead of time, transitioning to long-term care could completely deplete your savings almost overnight.

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Bottom line

Preparing for retirement means more than simply saving enough money. It also means staying ahead of important financial changes that will impact your life in the coming years, including switching from private insurance to Medicare.

By proactively avoiding the errors above, you can keep more cash in your pocket while ensuring Medicare does what it's supposed to do: Help you manage your health without busting your budget.

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