If you’re like many working Americans, you’ve been picking an employer health insurance plan for a long time. And while sorting out workplace coverage is not nothing, the process isn’t particularly daunting either. So when the time comes to sign up for Medicare, you may figure that enrolling will be no big deal.

Just wait. 

Medicare may not be rocket science, but it is complicated stuff for the estimated 10,000 people who sign up every day. The Medicare Rights Center reports that confusion about enrollment is the second most common reason people call them for help (coverage denials is No. 1).

“A lot of people are taken aback by the extent to which you need to become your own health insurance expert when you enroll,” says Philip Moeller, author of Get What’s Yours for Medicare.

In a recent survey of adults 50 and older by the Nationwide Retirement Institute, 72% of respondents said they wished they better understood Medicare coverage. If you’re in that camp, start by educating yourself on what’s most likely to take you by surprise. 

1. You can’t just sign up any time 

Just like with most employer health plans, Medicare has a fall open enrollment period, which runs from October 15 to December 7. But when you’re signing up for the first time, this isn’t when you do it. 

Rather, as a new Medicare recipient you have your very own Initial Enrollment Period, which is the seven-month window around your 65th birthday (three months before, your birthday month, and three months afterwards).

If you’re already collecting Social Security when you turn 65, you’ll likely be automatically enrolled in Medicare. If you aren’t, you need to make it happen. 

What’s more, says Moeller, “if you’re late signing up you could face lifetime penalties.” Your premiums for Medicare Part B (the medical insurance part of Medicare) could be 10% higher for every 12 months you delay. 

Plus, the lag time between enrolling and getting covered varies depending on when you sign up. If it’s in the months following your birthday, you might have to wait as long as three months.

If you’re still getting insurance through your employer when you turn 65, you may not have to enroll in Medicare just yet. Instead, when your workplace coverage ends, you’ll qualify for an eight-month Special Enrollment Period, when you can sign up without penalty.

But it’s crucial to check with your benefits department to see if you can, in fact, stay on that plan and how your workplace benefits coordinate with Medicare.

2. There’s no one type of Medicare 

At work, you may have the choice of a few different types of plans (PPO, POS, HMO), deductibles, and insurers. But with Medicare, the number of decisions you need to make can seem even more daunting.

First you must decide whether you want Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance), or if you prefer Medicare Advantage (Part C), privately managed group health insurance that is similar to workplace plans.

“Be prepared to spend a lot of time researching your options and getting all the information you need.”
Fred Riccardi
Medicare Rights Center

With Original Medicare, you’ll likely also want Part D (drug coverage) and a Medigap policy, and settling on those plans may involve sorting through dozens of options.

Medicare Advantage wraps all of that into one policy, making it more convenient, but your choice of medical providers can be quite limited. (For more on all of these plans, check out our Guide to Medicare.)

What’s best for you depends largely on your health needs, as well as your personal preferences. So it’s important that you spend time—and it will take time—to explore your choices and estimate your potential out-of-pocket costs.

“Don’t just consider the cost of your premiums,” says Fred Riccardi, vice president of client services for the Medicare Rights Center, a nonprofit consumer service organization. Also factor in deductibles, co-pays, and out-of-pocket maximums.

“Be prepared to spend a lot of time researching your options and getting all the information you need,” says Riccardi. (See No. 5 below for more on how you can do that.)

3. Your initial choices can have lasting consequences

Once you’re on Medicare, you can change your plans during the Open Enrollment period every fall.

You can sign up for a different plan with no adverse consequences, with one notable exception: Switching from Medicare Advantage to Original Medicare can be problematic if you also want to buy a Medigap policy, as many people do.

Here’s why: Under federal law, insurers cannot deny you Medigap insurance when you initially enroll in Medicare, and they must renew your coverage each year as long as you continue to pay your premiums. 

But if you try to buy a Medigap policy later, insurers in many states are allowed turn you down based on your health, or they can charge higher prices due to a pre-existing condition.

“It’s important to be aware of this from the start if you’re considering a Medicare Advantage plan,” says Riccardi.

4. It’s not as cheap as you may think 

Medicare is a government program, and you’ve likely been paying into it for most of your working life. So Medicare’s steep costs may blindside you. In fact, in the Nationwide Retirement Institute survey more than half of respondents weren’t aware that Original Medicare isn’t free.

In 2018, most Americans pay $134 a month for Medicare Part B, but if your annual income is higher than $85,000 (or $170,00 if you and your spouse file jointly), you’ll pay from $187.50 to $428.60 a month. 

You’ve likely been paying in for most of your working life. So Medicare’s steep costs may blindside you.

Premiums are based on your income from two years earlier. If you’re no longer working or your earnings picture has significantly changed, you can file an appeal to try to lower your premiums.

In addition to Medicare Part B and some Medicare Advantage policies, you’ll also pay for a Part D drug plan and a Medigap policy. What’s more, you’ll be responsible for your co-pays and deductibles, which can vary enormously from one policy to the next.

5. The free help isn’t half bad

Now for some good news: There are a lot of great free resources and willing experts who are available to answer your questions and steer you in the right direction.  

To educate yourself about Medicare, start at the official Medicare site, medicare.gov. There you’ll find the agency’s Plan Finder tool, which lets you compare the costs of plans in your area. (You can get the same information by calling 800-633-4227.)

You can get personalized counseling through the State Health Insurance Assistance Program (SHIP). To find your state’s program, go to shiptacenter.org or call 877-839-2675.

Our Guide to Medicare answers the most common questions enrollees ask. And the Medicare Rights Center has an interactive tool that walks you through easy-to-use information about enrollment and plan options.