Medicare Basics: Where Seniors Overpay
Last updated 2026-07-15
Medicare doesn't run on autopilot. The plan that was the cheapest, best-fit option the year you signed up can quietly become an expensive one a year or two later, because premiums, drug lists, and provider networks all change every year. This guide covers the five spots where people age 65 and older most commonly leave money on the table, and the free official help available to sort it out. Nothing here is personalized advice - for that, use the free counseling program described below.
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Medicare Advantage vs. Medigap: there's no universally 'right' answer
Original Medicare (Parts A and B) can be paired with a Medigap (Medicare Supplement) policy, which fills in most of the gaps Original Medicare leaves - but you can't have both a Medigap policy and a Medicare Advantage plan at the same time. The trade-off is real and it's about risk, not just price. Medicare Advantage plans usually have low or even $0 monthly premiums, but you pay copays and coinsurance each time you use care, up to an annual out-of-pocket maximum (capped at $9,250 for in-network care in 2026). You're also generally limited to the plan's provider network and service area.
Medigap works the other way: you pay a higher monthly premium (Plan G, the most popular option, averages around $166/month nationally at age 65 in 2026), but once you've met the Part B deductible ($283 in 2026), Medigap plus Medicare picks up nearly everything else, with no real out-of-pocket ceiling to worry about because the big costs are already covered. You can also see any doctor nationwide who accepts Medicare, which matters if you travel or split time between states.
The honest rule of thumb: if you're healthy, rarely see specialists, and want to keep monthly costs low, Medicare Advantage can save real money. If you have ongoing conditions, expect major procedures, or want predictable costs and freedom to choose any Medicare doctor, Medigap tends to protect you better - even though you pay more up front. Neither is a scam or a mistake; the overpaying happens when someone picks one and never revisits whether it still fits.
Sources: NCOA - Medicare Advantage vs. Medigap · Washington State OIC - Compare Medigap and Medicare Advantage plans
Shop your Part D drug plan every single year
This is the single most common place people overpay. Part D plans are allowed to change their premiums, deductibles, copays, pharmacy networks, and even which drugs they cover from one year to the next. A plan that was the cheapest option for your medications in 2025 can easily become one of the pricier ones in 2026, with no red flag telling you that happened - your plan just auto-renews unless you act.
The fix is simple and free: every fall during Open Enrollment (October 15 - December 7), plug your current medications into Medicare's Plan Finder tool at Medicare.gov and compare what's actually available in your area for the coming year. It only takes about 15-20 minutes if you have your medication list handy. For 2026, the national average Part D premium is about $38.99, but actual premiums for standalone plans range from $0 to $100 or more depending on location and plan, so the potential savings from switching are not trivial.
Don't assume 'I already have good coverage' means the math still works this year - check it every year, even if you don't plan to switch.
Sources: Medicare.gov - Open Enrollment · medicareresources.org - Seven rules for shopping Medicare Part D plans
IRMAA: a surcharge based on old income that people forget to appeal
IRMAA (Income-Related Monthly Adjustment Amount) is an extra charge added on top of standard Part B and Part D premiums for higher earners. For 2026, it kicks in once your income (as reported on your 2024 tax return - Medicare uses the most recent data the IRS has) exceeds $109,000 for single filers or $218,000 for joint filers. Above those thresholds, surcharges are calculated on a sliding scale across five brackets, and can add anywhere from about $81 to $487 a month to your Part B premium, plus up to about $91 more for Part D, on top of the 2026 standard Part B premium of $202.90.
Here's where people overpay: IRMAA is based on income from two years ago, so if your income has since dropped because of retirement, a spouse's death, divorce, or another 'life-changing event,' you may be paying a surcharge that no longer reflects your actual situation. You can file Form SSA-44 with the Social Security Administration to request a reduction based on the life-changing event - this isn't automatic, you have to ask.
Sources: Kiplinger - Medicare Premiums 2026: IRMAA Brackets and Surcharges · NerdWallet - What is the Medicare IRMAA?
Free preventive services you may not be using
Medicare Part B covers a long list of preventive and screening services at $0 - no deductible, no coinsurance - as long as your provider accepts assignment. This includes the Annual Wellness Visit, cardiovascular disease screening, diabetes screening, colorectal cancer screening, mammography, cervical cancer screening, bone mass measurement, depression screening, alcohol misuse screening and counseling, tobacco-use counseling, flu shots, COVID-19 vaccines, hepatitis B screening, HIV screening, lung cancer screening (for eligible smokers/former smokers), and an abdominal aortic aneurysm ultrasound screening, among others.
The catch that leads to surprise bills: these services are free only when billed correctly as preventive care. If a routine wellness visit turns into a discussion of a new symptom or an existing condition gets addressed during that same visit, the provider may bill part of the visit as a regular office visit, which does carry a cost. It's worth asking your provider's office in advance which parts of a visit are being coded as preventive versus diagnostic.
The full official list is in Medicare's preventive services guide, and it's worth a look once a year since new services occasionally get added.
Sources: Medicare.gov - Preventive and screening services · Medicare.gov - Your Guide to Medicare's Preventive Services (official booklet)
Free, unbiased Medicare counseling: SHIP
Every state has a State Health Insurance Assistance Program (SHIP) - a federally funded, volunteer-staffed counseling service that helps Medicare beneficiaries compare plans, understand costs, and apply for assistance programs, entirely free of charge and with no ties to any insurance company. Unlike a call to an insurance broker or a 1-800 number from a TV ad, SHIP counselors have no commission and no product to sell - their job is to explain your options, not steer you toward one.
SHIP can help you re-shop your Part D or Medicare Advantage plan every fall, walk through the Medicare Advantage vs. Medigap decision, help you understand or appeal an IRMAA surcharge, and check whether you qualify for programs like Medicare Savings Programs or Extra Help that lower your costs further. To find your local SHIP office, visit shiphelp.org or call 877-839-2675 and say 'Medicare' when prompted.
If you take away one thing from this guide, it's this: before paying a broker, an online 'Medicare advisor' service, or just guessing, call your free local SHIP counselor first.
Sources: SHIP TA Center - Get Medicare Help from Your Local SHIP · ACL - State Health Insurance Assistance Program (SHIP)
Know the enrollment windows so you don't get locked out or penalized
Medicare's Open Enrollment Period runs October 15 through December 7 every year, with changes taking effect January 1. During this window you can switch Medicare Advantage plans, move between Original Medicare and Medicare Advantage, join or drop Part D drug coverage, or switch drug plans - this is your main annual chance to fix a plan that no longer fits.
There's also a separate Medicare Advantage Open Enrollment Period from January 1 to March 31 for people already in a Medicare Advantage plan who want to switch to a different Advantage plan or move back to Original Medicare (with a chance to also pick up a Part D plan). Missing these windows can mean waiting up to a year to fix a bad plan choice, and in the case of Medigap, delaying past your initial 6-month Medigap Open Enrollment Period (which starts the month you're 65 and enrolled in Part B) can mean insurers are allowed to use medical underwriting and charge more, or deny coverage, depending on the state.
Sources: Medicare.gov - Open Enrollment · California Health Advocates - Open Enrollment is Oct 15 - Dec 7