5 Costly Medicare Mistakes — and How to Avoid Them in 2026

Updated June 4, 20267 min readReviewed against medicare.gov

The five most expensive Medicare mistakes are missing your Part B sign-up window, going without drug coverage, skipping your one-time Medigap window, ignoring income-based surcharges, and assuming Original Medicare caps your costs. Each can cost you for life — but every one is avoidable if you act on time.

1. Missing your Part B enrollment window

Your Initial Enrollment Period (IEP) is a seven-month window: it starts three months before the month you turn 65 and ends three months after. If you don't have qualifying coverage from a current employer (yours or a working spouse's) and you delay Part B, the penalty is steep and permanent.

The Part B late enrollment penalty adds 10% to your premium for each full 12-month period you could have had Part B but didn't — and you pay it for as long as you have Medicare. On the 2026 standard premium of $202.90/month, even a two-year delay raises your premium by 20% for life.

The most common trap: assuming COBRA or retiree coverage lets you delay. It usually does not count as the active-employment coverage that triggers a Special Enrollment Period. Confirm your situation before turning down Part B.

IEP: 3 months before, the month of, and 3 months after your 65th birthday
Part B penalty: 10% of the premium per full 12 months delayed, permanent
Active employer coverage can let you delay penalty-free via a Special Enrollment Period

2. Going without Part D drug coverage

Many people who take few or no medications skip Part D at 65 — then get penalized when they finally need it. If you go 63 or more continuous days without Part D or other creditable drug coverage after your IEP, a late penalty applies whenever you do enroll.

The Part D penalty equals 1% of the national base beneficiary premium ($38.99/month in 2026) times the number of full months you went uncovered, added to your premium for as long as you have Part D coverage. Years of delay can add up to a meaningful lifelong surcharge.

One bright spot for 2026: Part D now caps what you pay out of pocket for covered drugs at $2,100 for the year, so the downside of carrying coverage you rarely use is smaller than the risk of a permanent penalty.

Penalty trigger: 63+ continuous days without creditable drug coverage
Penalty math: 1% × $38.99 × full uncovered months, added to your premium permanently
2026 Part D out-of-pocket cap: $2,100/year for covered drugs

3. Missing your one-time Medigap window

If you want a Medicare Supplement (Medigap) policy to help with Original Medicare's out-of-pocket costs, timing is everything. Your six-month Medigap Open Enrollment Period starts the first month you're 65 or older and enrolled in Part B.

During this window, insurers must sell you any policy they offer at their best available rate — they can't use medical underwriting or charge you more for pre-existing conditions. This is a guaranteed-issue right under federal law.

Miss it, and in most states insurers can review your health history, charge more, or decline you altogether. Specific Medigap plan benefits, availability, and premiums vary by company and state, so compare carefully while your guaranteed-issue protection is active.

Medigap Open Enrollment: 6 months, starting when you're 65+ and have Part B
Inside the window: guaranteed issue, no medical underwriting
After the window: insurers may underwrite, raise prices, or deny coverage (varies by state)

4. Ignoring income-based surcharges (IRMAA)

Higher-income beneficiaries pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of their Part B and Part D premiums. Social Security generally uses your tax return from two years earlier — so 2026 surcharges are based on 2024 income.

IRMAA begins when modified adjusted gross income (MAGI) exceeds $109,000 for a single filer or $218,000 for a married couple filing jointly. With the surcharge, the total 2026 Part B premium ranges from $284.10 up to $689.90 per month depending on your bracket, plus a Part D surcharge of $14.50 to $91.00 per month.

A one-time income spike — selling a home, a large Roth conversion, capital gains — can push you over a threshold for a single year. If a life-changing event (such as retirement or the death of a spouse) reduced your income, you can ask Social Security to reconsider using Form SSA-44.

2026 thresholds (2024 income): MAGI above $109,000 single / $218,000 joint
Part B with IRMAA: $284.10–$689.90/month, by bracket
Part D IRMAA surcharge: $14.50–$91.00/month, by bracket

5. Assuming Original Medicare covers everything

Original Medicare (Parts A and B) has no annual out-of-pocket maximum. After you meet the 2026 Part B deductible of $283, you generally pay 20% coinsurance of the Medicare-approved amount for most covered services — with no ceiling on that 20%.

Hospital stays carry their own costs. The 2026 Part A inpatient deductible is $1,736 per benefit period; days 61–90 cost $434/day, and lifetime reserve days cost $868/day. Skilled nursing facility days 21–100 cost $217/day. Part A is premium-free if you have 40+ work quarters; otherwise it's $311/month (30–39 quarters) or $565/month (under 30 quarters).

Because of these gaps, most people pair Original Medicare with a Medigap policy and a Part D plan, or choose a Medicare Advantage plan instead. Medicare Advantage and Medigap benefits, networks, and costs vary by plan and location — there is no one-size-fits-all answer, so match coverage to your own health and budget.

No out-of-pocket cap in Original Medicare; 20% coinsurance after the $283 Part B deductible
Part A 2026: $1,736 deductible/benefit period; $434/day (days 61–90); $868/day lifetime reserve; $217/day SNF (days 21–100)
Coverage choices and costs vary by plan and state — compare before deciding

Frequently asked questions

How long is my Medicare Initial Enrollment Period?

Seven months total: the three months before the month you turn 65, your birthday month, and the three months after. Signing up early in this window helps avoid gaps in coverage.

Can I avoid the Part B late penalty if I'm still working?

Often, yes. If you have health coverage from a current employer (yours or a working spouse's), you may qualify for a Special Enrollment Period to sign up later without penalty. COBRA and retiree coverage usually do not count, so verify before delaying.

Is the Medicare Part B late penalty permanent?

Yes. The Part B penalty adds 10% to your premium for each full 12-month period you delayed enrollment, and in most cases you pay it for as long as you have Medicare.

What income triggers IRMAA surcharges in 2026?

For 2026, IRMAA generally applies when your 2024 modified adjusted gross income was above $109,000 (single) or $218,000 (married filing jointly). Surcharges rise by bracket and apply to both Part B and Part D premiums.

Does Original Medicare have an out-of-pocket maximum?

No. Parts A and B have no annual cap on what you can spend. That's why many people add a Medigap policy and Part D, or choose a Medicare Advantage plan, which does include an out-of-pocket maximum. Benefits vary by plan.

What is the Part D out-of-pocket cap for 2026?

In 2026, your out-of-pocket spending on covered prescription drugs under Part D is capped at $2,100 for the year. After you reach that limit, you pay nothing more for covered drugs for the rest of the year.

Sources

Related guides

Medicare Parts & Plan Types

Medicare Enrollment Periods: IEP, GEP, AEP, and SEPs

Medicare Login Guide is an independent resource and is not affiliated with or endorsed by Medicare, the Centers for Medicare & Medicaid Services, or any government agency. This article is for general information only — confirm current figures and your specific options at medicare.gov or by calling 1-800-MEDICARE.