Dave Ramsey issues dire warning to Americans about 1 costly Medicare mistake — says you could pay penalties for ‘rest of your life’ if you get it wrong. Here’s how to get it right in 2025

However, financial guru Dave Ramsey believes most people should overcome this complexity and take the time to learn about the program because not doing so could have dire consequences.

In fact, Ramsey says there’s one mistake that could be the most costly: not enrolling at the right time.

“Seriously, understanding and getting enrollment right is super important because if you get it wrong, you could end up paying penalties the rest of your life,” he wrote on his website. “Yeah, the stakes are that high!”

Here’s why the first step to entering the Medicare program is so important.

Lifelong consequences

A quick refresher: Medicare is a federal health insurance program in the United States primarily for people aged 65 and older.

The program consists of different parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans), and Part D (prescription drug coverage), each addressing various healthcare needs.

People looking to enroll in the program for the first time have three opportunities, according to Ramsey. The first is the Initial Enrollment Period (IEP) which starts three months before your 65th birthday and runs through three months after, for a total of seven months. Those receiving social security payments for at least four months before they turn 65 could be auto-enrolled.

Under special circumstances, such as living abroad or coming back to the country after the age of 65, you can apply during a Special Enrollment Period (SEP).

However, if you miss IEP and SEP, your only option is the General Enrollment Period (GEP) which runs from Jan. 1 to March 31. This option involves higher premiums for your health insurance which last the rest of your life.

“And keep in mind, the longer you wait, the bigger the penalties get,” Ramsey says.

To avoid this mistake, here’s what you can do if you’re planning to enroll in 2025 or the near-future.

How to get it right

To avoid expensive and stressful mistakes with your health insurance, you should start learning about Medicare as early as possible. If you’re close to the age of 65, learn as much as you can to prepare for the inevitable enrollment process.

If you’re relatively young, it helps to learn about the basics. Younger individuals with disabilities or specific conditions like end-stage renal disease could also be covered by the program, so understanding these rules could be useful.