10 Common Medicare Mistakes to Avoid in California

Medicare can be confusing. With so many rules, deadlines, and plan choices, it’s easy to make mistakes that cost you money. Sometimes those penalties will be charged for the rest of your life. This guide covers the most common mistakes California residents make and how to avoid them.

1. Enrollment Window and Enrollment Period Errors

The most common Medicare mistakes happen when people don’t sign up for a Medicare plan at the right time.

Unless you’re already receiving Social Security, Medicare won’t automatically sign you up. You or your Medicare insurance broker must do it during the 7-month window around your 65th birthday.

This window runs from 3 months before your birthday month to 3 months after. If you miss it, you could face late enrollment penalties and gaps in coverage that follow you for life.

2. Not Understanding Health Insurance vs Medicare

Some Medicare beneficiaries delay enrollment because they have other insurance. But missing enrollment periods could leave you without coverage, under-covered, or subject to late penalties. Watch out for these situations:

Generally, only coverage from a current employer allows you to delay Medicare without penalty, though some situations are more complex.
If you’re leaving a job, talk to your employer’s benefits office before your last day, so your Medicare starts when your work insurance ends.
COBRA and marketplace plans don’t protect you from penalties—and if you’re already on COBRA when you become Medicare-eligible, your COBRA coverage may end.

For all of the above, check with Medicare or directly with an agent or broker if you’re unsure. Keep records of all your enrollment decisions and coverage documents. This helps if problems or disputes come up later.

3. Price-Related Costly Mistakes

Many people expect Medicare to work like their employer insurance or a private insurance plan. It doesn’t.

Original Medicare doesn’t pay for the following:

Dental care
Vision care, including glasses and exams
Hearing aids
Long-term care
20% of the total costs of most care

There’s also no out-of-pocket maximum. This means you could owe thousands of dollars for hospital stays or doctor visits because you’re responsible for 20% of most costs with no cap.

Many people also think Medicare is free. It’s not. A couple could pay $500 a month or more for Parts A, B, D, and a Medigap plan. Make sure you budget for premiums, deductibles, copays, and coinsurance.

4. Misunderstanding Medicare Advantage vs Medigap

You also need to understand the difference between Medicare’s two main paths:

Medicare Advantage: Also called Part C, Medicare Advantage (MA) is run by private insurance companies and usually works like an HMO. These plans often include drug coverage and extras like dental coverage and vision care, but they limit which doctors you can use. You may need approval before seeing specialists.
Medigap): Also called Medicare Supplement, works with Original Medicare. It’s an optional supplemental coverage plan sold in various forms. You pay a monthly premium for this plan on top of Original Medicare. Medigap helps pay your share of costs. You can see any doctor who accepts Medicare, anywhere in the country, with no network restrictions. California is one of only 14 states with a “birthday rule” that lets you switch Medigap plans.

These two options cannot be used together, and it’s essential to compare costs. Medigap doesn’t cover routine vision or dental care. But paying out of pocket isn’t always expensive. Costco eye exams and discount eyeglass websites often cost less than insurance copays.

Many people think they can try Medicare Advantage first and if they don’t like it, switch to Original Medicare plus Medigap later.

This is risky:

If you leave Medicare Advantage for Medigap after your initial enrollment period, the insurance company can charge you more or turn you down based on your health.
California’s birthday rule (which lets you switch between Medigap plans) does not help, as it only applies to people who are already in a Medigap plan.

5. California Medigap Management

If you choose Medigap in California, you have options most Americans don’t—but also some traps to avoid.

The best time to buy Medigap is during your 6-month open enrollment period, which starts when you turn 65 and enroll in Part B. During this window, insurance companies must sell you any Medigap policy at the standard rate, regardless of your health. After that, you may face questions about your health or denial. Don’t wait until you’re sick to think about coverage.

California is one of only 14 states with a “birthday rule.” This rule lets you switch Medigap plans once a year without answering health questions. Your window is 60 days, starting 30 days before your birthday and ending 30 days after. During this “birthday rule” time, you can shop for a cheaper plan.

However, the birthday rule has limits that can be confusing. You can only switch to a new Medigap plan with equal or fewer benefits—never more.

If you start with Plan G, you can switch to another company’s Plan G or move down to Plan N.
If you start with Plan N, you cannot move up to Plan G.

Whatever plan you choose first is your benefits ceiling, so choose carefully.

People on Medicare due to disability before age 65 face a California-specific challenge. California requires insurance companies to sell Medigap policies to this group, which offers better protection than many states offer. However, insurers set Medigap premiums. Rates for people under 65 are often much higher than those for people 65 and older.

6. California Medicare Advantage Plan Management

If you choose a Medicare Advantage plan in California, the biggest mistake I see clients making is picking one based only on a low premium or extra benefits.

A $0 premium plan might have sneaky high copays, coinsurance, or a limited network. These costs add up fast if you actually need care.

Before you enroll, do your homework:

Ensure your doctors and hospitals are in-network: If they’re not, you could end up paying much more or needing to switch providers. Watch for network gaps, especially in rural California.
Look up your medications: Review the plan’s formulary to see if they’re covered and at what tier.
Understand the prior authorization requirements: Some plans require approval before specific treatments, which can delay care.
Review the extra benefits: In some counties, large dental and vision networks are easy to use. In others, you might not find a nearby provider who bills the plan directly. However, some plans let you pay the provider yourself and get reimbursed.

7. Medicare Part D Plan or Drug Coverage Errors

Medicare Part D offers prescription drug coverage. You may have only a few or many drug plans to choose from if you have Original Medicare. If you have Medicare Advantage, Part D coverage is wrapped into your plan.

The plan’s formulary is a list of drugs it covers, along with their prices. If you take a drug not on the list, it may not be covered, or you may need to jump through hoops to get it covered. It’s easy to get stuck in the wrong plan.

Look up your medications in the drug plan’s formulary to see if they’re covered and at what tier, and check if your pharmacy is “preferred.” Using a non-preferred pharmacy costs more. Remember that you and your spouse might need different Part D plans if you take other medications.

The Part D for drug coverage can be particularly tricky, so consider speaking with an expert about a low-cost plan to avoid penalties that never go away.

8. Not Reviewing Coverage Annually

Don’t set your plan and forget it. Don’t assume your current plan is still the best deal. Compare prices every fall, even if you’re happy with your coverage.

Every fall, your provider will send you an Annual Notice of Change (ANOC) outlining any changes for the upcoming year. Plans change their costs, drug coverage, and provider networks annually. Some insurance plans enter new California markets, and others exit those California counties completely.

A plan that worked well this year might cost more or cover less next year. A plan could change its ambulance benefit from a reasonable copay to a budget-busting coinsurance (where you pay a percentage of the total), which could cost thousands for someone living in rural California.

The ANOC you’re sent every year doesn’t show prescription drug prices for your specific medications. Use the Plan Finder tool at Medicare.gov to see what you’d actually pay.

Review your coverage with your Medicare broker every year during the Annual Enrollment Period, which runs October 15 through December 7.

9. Not Carrying Out Long-Term Planning

Many Medicare mistakes come from not planning for costs, future health needs, and programs that could help you, particularly if you’re on a fixed income.

Budget for costs you might not expect:

IRMAA surcharges: If your income is above certain levels, you’ll pay extra for Part B and Part D through a surcharge called IRMAA. Many people don’t know about this until they get the bill.
Prescription prices: The same medication at the same insurer can cost different amounts at different pharmacies. Sometimes paying cash costs less than using insurance. Costco member prices and Amazon Prime pharmacy are often the cheapest options.

You can start planning for potential reduced income and additional assistance well before you need them, especially if you’re considering long-term care. If money is tight, California has programs that can help. But California has its own rules on lookback periods, assets, and income limits..

If you can afford it, an elder law attorney can help you protect your assets and your spouse. No one wants to think about worst-case scenarios, but having a plan prevents the worst outcomes.

Many people who qualify never apply because they don’t know these programs exist:

Medicare Savings Programs can pay your Part B premium and other costs.
Extra Help reduces Part D drug costs.
Medi-Cal provides additional coverage for people with limited income.
D-SNP Medicare Advantage plans: Lower out-of-pocket costs than regular Medicare Advantage plans, though benefits vary by plan.

California law also protects dual-eligible beneficiaries from surprise bills. If you have both Medicare and full Medi-Cal, doctors and hospitals can’t bill you for balances, coinsurance, or copays. If you receive a bill, ask questions first to determine whether improper billing occurred.

10. Not Getting Help with Your Medicare Plan

You don’t have to figure this out alone—and trying to do so is itself a mistake. Write down every question you have about Medicare in California and ask to understand before buying.

Licensed insurance brokers like me can help, and my services are free to you. Talk to more than one broker, and always ask which companies they represent. You want a broker who can offer a wide range of options—I represent dozens of Medicare carriers across California and beyond.

California offers free Medicare counseling through HICAP, the Health Insurance Counseling and Advocacy Program. Call 1-800-434-0222 to speak with a counselor who doesn’t sell insurance and has no reason to push one plan over another.

Your doctors can be helpful too. Ask which plans they prefer working with. You may learn they spend a lot of time fighting with certain insurers over pre-approvals, or that they get paid better by Original Medicare than by some Advantage plans.

Medicare is complicated. But with the right help, you can avoid costly mistakes and find coverage that works for you.