Financial advisers often have a front-row seat to the Medicare mistakes their clients make. Too often, enrolling in Medicare is treated as a one-time formality rather than a long-term financial and health coverage decision.
What many retirees do not realize is that the most serious costs tied to those choices often surface years later. By the time health declines and medical needs increase, options may already be narrowed or gone.
Medicare decisions made quickly or without guidance can carry permanent consequences. Late-enrollment penalties, coverage restrictions, and lost flexibility are frequently irreversible, making Medicare a core retirement planning decision, not a box to be checked.
The remedy, advisers say, is prevention through planning.
“The consistent lesson is that Medicare choices are long-term planning decisions, not one-time administrative tasks,” said Nathan Sebesta, a certified financial planner with Access Wealth Strategies. “Many of the most expensive consequences show up years later, when options to change course are limited or no longer available.”
Joon Um, a certified financial planner with Secure Tax & Accounting, echoed that view, saying Medicare choices may feel routine at enrollment but often function like long-term commitments once penalties, underwriting rules, or income-related premium surcharges take effect.
To identify the Medicare decisions older adults most often regret – the things they wish they had known before it was too late — I asked certified financial planners who are members of the Financial Planning Association to share examples from their practices. Their goal was to surface lessons that might help future Medicare enrollees avoid costly mistakes.
Here is what they said.
Financial planners share the Medicare choices clients regret most — and why the real costs often don’t appear until years later, when options are limited.
Photo by FG Trade Latin on Getty Images
Delaying Medicare Part B enrollment
One of the most common Medicare mistakes Sebesta sees involves delaying enrollment in Medicare Part B.
“I worked with a married couple in their mid-60s who retired and assumed their coverage would automatically transition,” he said. “They did not realize the eight-month Special Enrollment Period had already started when employer coverage ended. They missed the window, faced a permanent Part B late enrollment penalty, and had a temporary coverage gap.”
Coverage was eventually restored, Sebesta said, but the higher premium is permanent.
By way of background, Medicare imposes a late enrollment penalty for Part B equal to 10% of the standard premium for each full 12-month period a person delays enrollment after becoming eligible. That penalty applies for as long as the individual has Part B coverage.
The penalty generally applies when someone does not have qualifying coverage, such as active employer-sponsored insurance, and misses their initial enrollment period. It can be avoided by enrolling during a Special Enrollment Period for those who are still working and covered by job-based insurance (or whose spouse is). In limited cases, beneficiaries may appeal if they can document other creditable coverage.
Medicare.gov offers this example: If you wait two full years, or 24 months, to enroll in Part B and do not qualify for a Special Enrollment Period, you owe a 20% penalty, reflecting two missed 12-month periods.
For 2026, that would work out as follows:• Standard Part B premium: $202.90• Late enrollment penalty (20%): $40.58
That brings the total monthly Part B premium to $243.48, rounded to $243.50. The penalty is included in the monthly premium and continues for life.
In Sebesta’s case, the misunderstanding centered on timing. The couple did not realize the eight-month Special Enrollment Period begins when employer coverage ends — not when COBRA or retiree coverage ends. Once the window closed, there was no way to reverse the penalty.
Assuming spousal employer coverage avoids penalties
Some older adults assume that being covered under a working spouse’s health plan automatically shields them from Medicare penalties, including the late Part B enrollment penalty.
What they often misunderstand is that not all employer-sponsored plans count as creditable coverage for Medicare purposes, particularly at smaller employers with fewer than 20 employees.
“Clients sometimes assume their spouse’s employer coverage counts, only to find out later it didn’t,” Um said. “The result is permanent penalties and coverage gaps that can’t really be fixed.”
When a plan does not qualify as creditable coverage, clients may unknowingly delay Part B enrollment and trigger lifelong penalties and temporary gaps in coverage. In most cases, advisers say, there is little or no remedy once the mistake is discovered.
Choosing Medicare Advantage based primarily on low premiums
Many clients select Medicare Advantage plans drawn by low or zero premiums and extra benefits, without fully understanding the trade-offs.
Those trade-offs often include narrow provider networks, prior authorization requirements, and reduced flexibility as health needs increase, advisers said.
“Several clients in their late 60s chose Advantage plans for the low or zero premiums without fully understanding network limitations or prior authorization rules,” Sebesta said.
“Years later, as medical needs increased, they wanted to move back to Original Medicare and add a Medigap policy. Because they were outside their guaranteed issue window, they faced medical underwriting. Some were denied coverage or offered policies at much higher costs. There was no full remedy, and the original decision limited future flexibility.”
Once health declines and guaranteed issue protections are no longer available, advisers say, there is often no way to fully undo that choice.
Missing the Medigap guaranteed issue window
A related and widespread misconception is the belief that Medicare beneficiaries can always buy a Medigap policy later, without health questions, if their needs change.
What many do not grasp is that Medigap guaranteed issue rights are limited, generally to the initial enrollment window when first signing up for Medicare Parts A and B. Outside that window, insurers typically require medical underwriting, which can lead to higher premiums or outright denial of coverage.
Wanda DiMare, an independent Medicare benefits consultant with Wandacare, said she frequently hears clients say they assumed they could switch to a supplement later if they became ill. In reality, she said, guaranteed issue protections typically apply only during the first 12 months after enrolling in Parts A and B.
Sebesta said the misunderstanding often becomes apparent years later, particularly among clients who initially chose Medicare Advantage. When those clients later try to move back to Original Medicare and add a Medigap policy, many find themselves subject to underwriting, he said, with limited or no options.
Um said clients are often surprised to learn that switching back to Original Medicare with a Medigap policy is not guaranteed once health conditions emerge.
Once the guaranteed issue window closes, advisers say, the consequences are often permanent.
Underestimating IRMAA exposure
Another Medicare mistake advisers see frequently involves underestimating exposure to income-related premium surcharges, known as IRMAA.
Sebesta said those surprises often stem from large Roth conversions or other income events that clients do not realize will affect their Medicare premiums in future years. In one case, he said, a client in their early 70s completed a sizable Roth conversion without understanding it would trigger higher Part B and Part D premiums the following year.
The increase created an unexpected cash-flow strain in retirement, Sebesta said. While future conversions were scaled back and an appeal helped in later years, the initial surcharge could not be undone.
Um said he sees the same pattern among clients who experience one-time income spikes, including large Roth conversions or capital gains. In some cases, appeals are possible, he said, but many clients ultimately have to absorb the higher costs.
The takeaway, advisers said, is that IRMAA is not a theoretical risk. Once higher premiums are triggered, the impact is real and often irreversible, reinforcing that Medicare premiums are closely tied to tax planning decisions made years earlier.