Medicare Open Enrollment Mistakes That Cost $1M+ Retirees Thousands
- Mark Fonville, CFP®
- Nov 12
- 7 min read
Video Script:
If you’re 65 or close and you have meaningful savings, the most expensive Medicare mistake usually isn’t the plan you pick. It’s the plan you keep without checking the fine print.
In the next few minutes, I’ll show you how to avoid the costliest Medicare Open Enrollment mistakes I see with $1 million‑plus households in Richmond, Williamsburg, and Reston, so you can protect your access to care and your retirement cash flow.
I’m Mark Fonville, CEO of Covenant Wealth Advisors, where we help individuals with over $1 million in retirement savings retire with peace of mind through a lifetime of clarity inside and partnership.
If clear, tax‑smart retirement guidance helps you, please like this video and subscribe so you never miss a weekly tip.
Every fall, from October fifteenth to December seventh, Medicare lets you review and change your health and drug coverage for the next year. Changes take effect January first. If you picked a Medicare Advantage plan and later regret it, there’s a second window from January first to March thirty‑first where you can switch Advantage plans once, or go back to Original Medicare with a drug plan.
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The most common and costly mistake is letting your plan auto‑renew. Each fall your plan mails you an Annual Notice of Change. It lists next year’s premium, copays, the drug list, pharmacy network, and rules. If you don’t read it, January first can bring higher costs or new limits you didn’t expect.
The fix is simple. Gather your drug list with doses and how often you take them. List your preferred pharmacies and your doctors and hospitals. Then use Medicare’s plan comparison tool to check total yearly cost, which means the premium plus the copays you’re likely to pay, before December seventh.
Next, not checking your doctors and hospitals when considering Medicare Advantage. Advantage plans use networks, and those networks change. Many services also need prior authorization, which means the plan must approve them first. That can slow things down for bigger items like hospital stays or certain drugs. If you like your current doctors, call the office and ask if they’re staying in‑network next year for the exact plan you’re considering.
Also check the plan’s maximum out‑of‑pocket limit. That’s the most you would pay in a year for Part A and Part B services before the plan pays one hundred percent. Make sure that number fits your risk comfort.
Here’s a mistake that trips up frequent travelers and snowbirds.
People assume they can buy Medigap, also called Medicare Supplement, whenever they want with no questions asked. Outside your first six months on Part B, or certain special situations, most states allow medical underwriting. That means you can be denied or charged more. If you want the broadest access nationwide, choose Original Medicare with Medigap when you first enroll in Part B, or check your state rules before you try to switch later.
Another high‑dollar area is prescriptions. Part D, which is the drug benefit, changed in a big way. There’s now an annual out‑of‑pocket cap for covered drugs. It’s $2,000 in 2025 and $2,100 in 2026. There’s also a payment plan option that lets you spread what you owe for covered drugs into monthly bills from your plan. It doesn’t lower the total, but it can prevent a big shock at the pharmacy. If you take expensive meds, run your drug list through the comparison tool and look closely at rules like step therapy, prior authorization, and quantity limits. Prices can vary a lot across pharmacies, and preferred pharmacies often have lower copays.
Let’s talk about taxes and premiums, because this is where higher‑asset retirees can overspend without realizing it. IRMAA, which stands for Income‑Related Monthly Adjustment Amount, is a surcharge added to your Medicare Part B and Part D premiums if your income is above certain levels. Medicare looks back two years at your tax return, so your twenty‑twenty‑five premiums are based on your 2023 income. If you converted a large amount to Roth, sold a business, or realized big gains, you may see a higher premium bracket two years later. One dollar over a threshold can move you into a higher surcharge. If your income fell due to a life‑changing event, like retirement or the death of a spouse, you can ask Social Security to reduce the surcharge by filing form SSA‑44 and providing proof. The key is to plan conversions and withdrawals with those future brackets in mind.
If you’re still working at 65, here’s a quick HSA note. Once you’re enrolled in any part of Medicare, you can’t contribute to a Health Savings Account. Part A can be retroactive up to six months, so to avoid penalties, stop HSA contributions at least six months before you apply for Medicare or Social Security. You can still spend HSA dollars on Medicare premiums and medical bills.
Another mistake is picking a plan for the freebies. Dental, vision, and gym benefits can be helpful, but don’t let them distract you from the basics: your doctors, your hospitals, your drugs, prior authorization rules, and your out‑of‑pocket limit. If you need access to a specific specialist or an academic medical center, check network status and any referral requirements before you enroll.
If you’ve delayed Part D because you had other coverage, keep proof that your coverage was creditable. Without it, a late enrollment penalty can follow you for life. If you lose creditable coverage, sign up within sixty‑three days to avoid that penalty.
Vaccines are easy to miss but important. Recommended adult vaccines like shingles and RSV are covered with no copay under Part D. Flu, COVID, and pneumococcal shots are covered under Part B at no cost. If you’re due, schedule them during the enrollment season and don’t pay cash outside your plan.
Here’s a simple five‑step checklist you can follow this week.
Read your Annual Notice of Change and list all medications, doses, and how often you take them, plus your preferred pharmacies and the doctors and hospitals you want to keep.
Estimate your income for this year and compare it to the IRMAA thresholds two years out, because that will affect your future premiums.
On the Medicare plan comparison tool, enter your ZIP code and drug list, confirm pharmacy pricing, and compare plans based on total yearly cost and rules.
If you’re considering Medicare Advantage, call your doctors’ offices to confirm next year’s participation for the exact plan name.
Pick the plan that balances access, risk, and total cost, not just the lowest premium, and submit your change before December seventh.
Let’s make this real with a short example. Say you’re a Richmond couple with a $1.8 portfolio and a small pension. You both take a few brand‑name meds. Your current drug plan raised one of those drugs to a higher tier next year, and your pharmacy is no longer preferred, so your out‑of‑pocket would jump by over a thousand dollars. With ten minutes on the comparison tool, you find another plan where your exact drug list costs far less at a preferred pharmacy nearby. A quick change during open enrollment saves real money without changing a single dose.
Another example. You switched to an Advantage plan last year for lower premiums, but your Williamsburg cardiologist is moving out of network next year. If you discover that in November, you can still switch plans before December seventh. If you don’t realize it until January, you can use the January to March Advantage open enrollment to make one switch or return to Original Medicare with a drug plan. Either way, the earlier you verify providers, the fewer surprises you’ll face.
Here are the three takeaways.
Don’t auto‑renew.
Match the plan to your life and your doctors.
Plan with taxes in mind.
If this was helpful, please like this video and subscribe for weekly retirement strategies tailored to high‑net‑worth households in Virginia.
If you want help pressure‑testing your choices and mapping the tax impact over the next two years, get your Free Retirement Assessment now. We’ll look at your coverage, your income plan, and your projected premiums so your health care supports the life you want in retirement.
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They’ll help you make a confident decision before December seventh.
Thanks for watching. I’ll see you next week.
About the author:
CEO and Senior Financial Advisor
Mark is the CEO of Covenant Wealth Advisors and a Senior Financial Advisor helping individuals age 50+ plan, invest, and enjoy retirement comfortably. Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine.
Disclosures: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond, Reston, and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. This article was written and edited by a CERTIFIED FINANCIAL PLANNER™ professional with the assistance of AI. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.
