Financial Risks of Choosing the Wrong Medicare Plan

Lucille Adams Contributor


Most of your healthcare expenses are covered by Medicare when you reach the age of 65, so it’s important that you choose the right Medicare plan to cover all your needs. However, the Medicare system is really a massive package as you might expect, and it’s very easy to make some bad choices, and these can come back to haunt you.

Just by making a few wrong choices, you could end up paying monthly premiums that are way too costly, or you might end up paying way too much for out-of-pocket medical expenses. Worst of all, you might have a significant gap in your coverage, and that means you could end up paying for expensive medical services yourself, with no hope of reimbursement.

This article will alert you to some of the most common mistakes made by people when assembling their Medicare plan. Armed with this knowledge, you should be able to avoid making the same mistakes. You could also consult an expert on Medicare to help you avoid these mistakes.

Ignoring your Part D coverage after the first year

It’s great that you settle on some really good Part D coverage when you’re setting up your initial Medicare coverage. However, each year there is open enrollment for this coverage, and it will usually be worth your while to check out any changes which may be available in this year’s packages.

There are also some negative changes that can occur, for instance, requiring you to go to a specific pharmacist for your medications or increasing your co-pay share on prescriptions. At the least, you’ll want to be aware of these changes so you don’t get surprised when ordering that first refill.

Choosing the same Part D coverage as your spouse

Most spouses do not take the same drugs, and that means there could be different levels of coverage for yourself and your spouse. If your Part D is not advantageous for your spouse, by all means, have the spouse select a totally different Part D coverage.

Also, be aware of the fact that some plans call for using specific pharmacies to get the best rates on drugs, so this may come into play for either you or your spouse.

Going out-of-network in your Advantage Plan

When you use a private Medicare Advantage Plan, it generally requires you to use those doctors and hospitals within their network in order to secure the most favorable rates. Every year, you should re-check to be sure your chosen doctors and hospitals are still within the network arranged by your Medicare Advantage providers.

If you fail to check this, and your preferred doctor is no longer in the network, you could end up paying a lot of money to be treated by that doctor.

Not switching Medicare Plans when necessary

There are some unusual cases where it’s allowed to switch plans mid-year, if you have undergone certain kinds of life changes. One of these life changes would be to move to an address that is not covered by your current plan.

It is also allowed to switch at any time to a Medicare Advantage plan that carries a five-star rating, so you can take advantage of the superior services offered. If either of these two scenarios applies to you, it would definitely be a mistake to not make the switch as soon as you can, so you can continue getting the best medical service and coverage.

Forgetting to sign up for Medicare at 65

You should begin receiving all kinds of notifications as you approach age 65, that you need to sign up for Medicare. Of course, when the time actually comes, it’s entirely possible that you forget to do it, or that you have other pressing matters on your mind and defer signup to another time.

You are allowed a three-month window before your 65th birthday, and a three-month window after it as well, so there’s plenty of time for you to get registered. About the only reason you might want to delay your signup is if you still have coverage through your employer, and you don’t intend to retire anytime soon.

Making financial moves that increase your premiums

Most individuals will pay the standard Part B coverage cost, which for 2022 is $170. However, if your income is still high for some reason, you could end up paying more for Part B coverage. If you’re single and have an adjusted gross income that exceeds $91,000, you could end up paying anywhere between $238 and $578 every month for coverage.

If you are anywhere near the cutoff line on adjusted gross income, be careful about doing anything that might boost your earnings over that threshold, and force you to pay the much higher rates for coverage.


The views, claims, and opinions expressed by our contributors are their own, and do not necessarily represent those of RSSA or NARSSA.

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