The 5 Medicare Mistakes Valparaiso Residents May Make (And How to Avoid Them)
Medicare is one of the most important financial decisions you will make as you approach retirement — and one of the most complex. For pre-retirees in Valparaiso and across Northwest Indiana, the rules around when to enroll, which parts to choose, and how Medicare interacts with your income and tax picture can create situations that if not properly managed, may cost you hundreds or even thousands of dollars per year — sometimes for life.
The five mistakes outlined in this guide are among the most common we see in the retirement income conversations we have with clients in Porter County, Lake County, and the Greater Chicagoland area. Each one is preventable. And in most cases, early awareness and proper planning makes the difference.
A Quick Medicare Foundation
Before diving into the mistakes, a brief framework. Medicare has four main parts:
Part A covers hospital stays, skilled nursing facility care, and some home health services. Most people receive Part A premium-free if they or their spouse paid Medicare taxes for at least 10 years.
Part B covers outpatient medical services — doctor visits, preventive care, lab work, and durable medical equipment. Part B requires a monthly premium. The standard Part B premium in 2026 is $202.90 per person per month.
Part C (Medicare Advantage) is an alternative to Original Medicare offered by private insurance companies that typically bundles Parts A, B, and often D into a single plan.
Part D covers prescription drugs and is offered through private insurance plans that work alongside Original Medicare.
Understanding which parts you need, when to enroll, and how each interacts with your broader retirement income plan is the foundation of smart Medicare planning.
Mistake #1: Missing Your Enrollment Window and Paying a Permanent Penalty
This is one of the most common — and potentially costly — Medicare mistake we see. Many people assume that Medicare enrollment works like most insurance: you sign up when you need it. That assumption can be extremely expensive.
Medicare late enrollment penalties are not a one-time late fee. They are added to your monthly premium and are usually charged for as long as you have that type of coverage — for most people, that means a lifetime penalty.
Here is how the penalties work:
Part B Late Enrollment Penalty: For each 12-month period you delay enrollment in Medicare Part B without having qualifying coverage, your monthly Part B premium increases by 10%. If you delayed Part B enrollment for three years without qualifying coverage, your premium could increase by 30% — for life.
Part D Late Enrollment Penalty: If you do not enroll in a Part D drug plan and do not have other creditable drug coverage, a penalty is added to your drug plan premium when you eventually do sign up. The penalty works out to roughly $3 per month for every 12-month period you went without a plan. The penalty is added for as long as you have Medicare drug coverage, even if you switch plans.
Your Initial Enrollment Period (IEP) is a seven-month window: the three months before your 65th birthday month, your birthday month itself, and the three months after. If you enroll before the month of your 65th birthday, Part B coverage starts the month you turn 65. If you enroll during your birthday month or in the three months after, coverage begins the month after you enroll.
How to avoid it: Mark your 65th birthday on your calendar and begin the Medicare planning conversation at least six months before that date. If you are still working and covered by employer insurance, there are important rules that govern whether and how long you can delay — which leads directly to Mistake #2.
Mistake #2: Assuming COBRA Coverage Protects You from Late Enrollment Penalties
This mistake surprises more people than almost any other in the Medicare world — and it can be devastatingly expensive.
When people leave an employer and elect COBRA continuation coverage, they naturally assume they are still covered and can delay Medicare enrollment without penalty. That assumption is wrong.
COBRA is generally not considered creditable coverage for Medicare Parts A and B. Individuals who choose COBRA instead of enrolling in Medicare on time may face permanent late enrollment penalties.
Medicare.gov is clear on this point: don’t wait until your COBRA coverage ends to sign up for Part B — COBRA coverage does not extend your limited time to sign up for Medicare.
The rules around delaying Medicare without penalty are specific. You can delay Part B enrollment without penalty if you or your spouse is still working and has healthcare coverage through an employer group health plan based on current employment. The key phrase is current employment. Retiree coverage, COBRA, and marketplace plans generally do not qualify as creditable coverage for the purpose of delaying Medicare enrollment without penalty.
Once your employer coverage ends, you have an eight-month Special Enrollment Period (SEP) that begins the month after your employment or group health plan coverage ends — whichever comes first — during which you can enroll in Part B without a penalty.
How to avoid it: If you are leaving an employer and considering COBRA, contact Medicare directly or work with an advisor before making that decision. Confirm whether your coverage qualifies as creditable before assuming you can delay enrollment without consequences. This is one conversation that could potentially save you thousands of dollars annually over time.
Mistake #3: Missing the Medigap Open Enrollment Window
Medicare Supplement insurance — commonly called Medigap — is a private insurance policy that helps cover the out-of-pocket costs not paid by Original Medicare, such as copayments, coinsurance, and deductibles. It is one of the most valuable tools for managing healthcare costs in retirement.
What most pre-retirees in Valparaiso don’t realize is that your right to purchase a Medigap policy at the best available rate has a narrow, one-time window.
Missing your six-month Medigap Open Enrollment window means you may face medical underwriting later. This can result in higher rates or denial of coverage based on your health status.
Your Medigap Open Enrollment Period begins the month you are both age 65 or older and enrolled in Medicare Part B. During this six-month window, insurance companies are required by federal law to sell you any Medigap policy they offer at the same price as a healthy person your age — regardless of any pre-existing conditions.
Once this window closes, that guaranteed issue right is gone. If you want to purchase or switch Medigap coverage outside of this window, insurers in most states can subject you to medical underwriting — meaning they can charge you significantly more or decline to cover you based on your health history.
How to avoid it: Enroll in a Medigap plan during your six-month Open Enrollment Period immediately following Part B enrollment. Do not delay this decision. Your health at age 65 may be very different from your health at 67 or 70 — and at that point, your options may be significantly more limited or more expensive.
Mistake #4: Not Enrolling in Part D Because “I Don’t Take Any Medications”
This is one of the most understandable Medicare mistakes — and one of the most predictably costly over time.
Many healthy pre-retirees reach age 65 taking few or no prescription medications and conclude that paying for a Part D drug plan is an unnecessary expense. The logic seems reasonable. The financial consequence is not.
If you do not enroll in a Part D drug plan and do not have other creditable drug coverage, a penalty is added to your drug plan premium when you eventually do sign up. The penalty works out to roughly $3 per month for every 12-month period you went without a plan. That penalty is permanent and accumulates with each passing year.
The deeper problem is that health changes unpredictably. A pre-retiree who takes no medications at 65 may be managing multiple prescriptions by 70 or 75. By that point, years of Part D penalty have accumulated — and the monthly cost of the drug plan they now urgently need is permanently inflated.
You generally won’t have to pay a Part D penalty if you have creditable drug coverage from another source, or if you don’t go 63 or more days without creditable drug coverage after your initial eligibility date.
How to avoid it: Enroll in a low-cost Part D plan at age 65, even if you currently take no medications. The premium for a basic plan is typically modest — far less than the accumulated penalty cost of waiting. Treat it as inexpensive insurance against future prescription needs and against a permanent penalty that compounds with every year of delay.
Mistake #5: Not Planning for IRMAA — The Medicare Surcharge Most Retirees Never See Coming
Of all the Medicare mistakes outlined in this article, this one tends to surprise even the most financially prepared pre-retirees in Northwest Indiana. It is also the one most directly connected to your overall retirement income plan — which is why it belongs in every financial planning conversation before you retire.
IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds — and it is based on your income from two years prior.
If your income crosses certain thresholds, Medicare adds a surcharge to your Part B and Part D premiums — sometimes totaling significant amounts per year for a married couple. The income that triggers IRMAA was earned two years ago. By the time you get the notice, it is too late to change it.
For 2026, Medicare beneficiaries who earn over $109,000 as an individual or $218,000 as a joint filer are subject to IRMAA surcharges on their Part B and Part D premiums.
The two-year lookback is the critical planning detail. Your 2024 income determines your IRMAA surcharges in 2026. Your 2025 income will determine surcharges in 2027. This means that decisions you make today — Roth conversions, large IRA withdrawals, the sale of a property, the timing of a pension lump sum — can directly affect your Medicare premiums years into the future.
Even modest income increases can move you into a higher IRMAA bracket, raising costs for both Part B and Part D. Because the brackets work as step functions, going just $1 over a bracket boundary means you owe the full surcharge for that higher tier — not a prorated amount. Staying just below it means you avoid the increase altogether.
Strategies to manage IRMAA exposure include staggering Roth conversions, balancing withdrawals across account types, using HSA funds for qualified medical expenses, and timing large gains or distributions carefully.
If you experience a significant life-changing event — such as retirement, the death of a spouse, or a divorce — that reduces your income, you can appeal your IRMAA surcharge by filing Form SSA-44. Roughly half of appeals are approved. You have 60 days from receiving an IRMAA notice to file an appeal with the Social Security Administration.
How to avoid it: Begin IRMAA planning well before age 65. Work with a fiduciary advisor who understands how your retirement income decisions — Social Security timing, IRA withdrawals, Roth conversion strategy, and investment income — interact with the IRMAA thresholds. This is not a Medicare question alone. It is a retirement income planning question that requires a comprehensive view of your tax picture.
The Common Thread: Medicare Planning Is Retirement Income Planning
Looking at these five mistakes together, a clear pattern emerges. The most costly Medicare errors are not the result of complexity alone — they are the result of making Medicare decisions in isolation, disconnected from the broader retirement income plan.
The timing of your enrollment affects whether you pay permanent penalties. Your choice of Medigap coverage affects your long-term healthcare cost exposure. Your income management strategy in the years before and during retirement directly determines what you pay for Medicare premiums every single month.
At Patten Financial Group, Medicare planning is a core component of the retirement income conversations we have with every pre-retiree we work with in Valparaiso and across Northwest Indiana. We help clients understand how Medicare fits into their overall financial picture — including Social Security timing, tax planning, investment income management, and long-term care planning — so that each decision reinforces the others rather than creating unexpected costs down the road.
If you are within five to ten years of retirement and have not yet had a comprehensive Medicare planning conversation, now is the right time to start.
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[This article is intended for educational purposes only and does not constitute personalized financial, legal, or insurance advice. Medicare rules, premiums, penalties, and income thresholds are subject to change annually. Information presented reflects rules and figures as of the date of publication and may not reflect subsequent changes. Readers are encouraged to consult Medicare.gov and the Social Security Administration for current program details, and to work with a qualified financial advisor and licensed Medicare specialist before making enrollment decisions. Patten Financial Group is an Investment Adviser Representative under Redhawk Wealth Advisors, Inc., an SEC Registered Investment Adviser. Medicare insurance services may be provided through a separately licensed insurance agent.]
Investment advisory services offered through Redhawk Wealth Advisors, Inc., an SEC
Registered Investment Advisor. SEC Registration does not imply any level of skill or
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Reference Sources
1. Medicare.gov — Avoid Late Enrollment Penalties
https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties
2. Medicare.gov — Working Past 65
https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/working-past-65
3. CMS.gov — Original Medicare Part A and B Eligibility and Enrollment
https://www.cms.gov/medicare/enrollment-renewal/original-part-a-b
4. The Medicare Family — 3 Common Medicare Mistakes
https://themedicarefamily.com/new-to-medicare/avoiding-penalties/
5. Humana — How to Avoid Medicare Late Enrollment Penalties
https://www.humana.com/medicare/medicare-resources/medicare-late-enrollment-and-penalties
6. Humana — IRMAA for 2026 Medicare Part B and Part D Premiums
https://www.humana.com/medicare/medicare-resources/irmaa
7. Kiplinger — Medicare Premiums 2025: IRMAA Brackets and Surcharges
https://www.kiplinger.com/retirement/medicare/medicare-premiums-2025-irmaa-for-parts-b-and-d
8. Medicare Resources — What Is IRMAA?
