Medicare, Explained

What this guide covers

Medicare is the federal health insurance program for people 65 and older — and for certain younger people with disabilities. Nearly every American will need to make Medicare decisions at some point, yet the program is genuinely confusing: four parts, multiple enrollment windows, lifetime penalties for missing deadlines, and dozens of private plan options layered on top.

This guide cuts through all of that. By the end you’ll know what each part covers, what you’ll pay in 2026, when to sign up, how Original Medicare differs from Medicare Advantage, and what scams specifically target people making Medicare decisions.

Who this applies to

Medicare is relevant to you or someone you care about if any of the following apply:

• You are 65 or older, or will turn 65 within the next year
• You are under 65 and have received Social Security Disability Insurance (SSDI) for at least 24 months
• You have End-Stage Renal Disease (ESRD) or ALS (Lou Gehrig’s disease), which have different eligibility rules
• You are an adult child helping a parent navigate Medicare enrollment
• You are still working past 65 and need to know whether to enroll now or wait

If you are already enrolled in Medicare and just want to understand what you have, Section 4 covers each part in detail. If you’re new to Medicare and haven’t enrolled yet, start with Section 5 on enrollment timing — the deadlines have permanent financial consequences.

What it costs — 2026 figures at a glance

Medicare is not free. The costs depend on which parts you have, your income, and whether you add supplemental coverage. Here are the official 2026 figures from the Centers for Medicare & Medicaid Services (CMS).

The four parts, explained

Think of Medicare as a system with four separate pieces. You’ll need to understand each one to make good decisions about your coverage.

What Original Medicare doesn’t cover

This is where many people are surprised. Original Medicare (Parts A and B) does not cover:

• Long-term care (also called custodial care — help with daily activities like bathing, dressing, and eating). This is one of the most important gaps. Long-term care requires separate planning, either through long-term care insurance or personal savings.
• Routine dental care — cleanings, fillings, dentures, most tooth extractions
• Routine vision care — eye exams for glasses, contact lenses, eyeglasses
• Hearing aids and routine hearing exams
• Most care outside the United States
• Cosmetic surgery

Many Medicare Advantage plans do cover dental, vision, and hearing to some extent — which is a significant reason people choose them.

Medigap — the fifth layer

Medigap (also called Medicare Supplement Insurance) is private insurance you can buy on top of Original Medicare to help cover the gaps — the deductibles, coinsurance, and copayments that Original Medicare leaves you paying. Medigap plans are standardized by the government (Plans A, B, C, D, F, G, K, L, M, and N), sold by private companies, and priced differently by each insurer. You cannot have both Medigap and Medicare Advantage — they serve different parts of the system.

When to sign up — enrollment periods and penalties

Missing the right Medicare enrollment window can result in a permanent penalty added to your monthly premium for the rest of your life. This is not a one-time fee — it compounds and stays. Understanding the enrollment windows is one of the most financially important things in this guide.

• Your main window Initial Enrollment Period (IEP) — 7 months Begins 3 months before the month you turn 65, includes your birthday month, and ends 3 months after. This is your primary opportunity to enroll in Parts A and B without any penalty. If you’re already collecting Social Security, you’ll be automatically enrolled in Parts A and B — your Medicare card arrives in the mail before your 65th birthday.
• If you’re still working Special Enrollment Period (SEP) — 8 months If you have health insurance through your own (or your spouse’s) current employer when you turn 65, you can delay Part B without penalty. When you stop working or lose that employer coverage, you have 8 months to enroll. Important: COBRA and retiree coverage do not count — only active employer group health insurance qualifies.
• If you missed the window General Enrollment Period (GEP) — January 1 to March 31 If you missed your IEP and don’t qualify for a Special Enrollment Period, you can sign up during this annual window. Coverage starts the month after you enroll. Late enrollment penalties will apply.
• Annual plan changes Open Enrollment — October 15 to December 7 Every fall, you can switch between Original Medicare and Medicare Advantage, change your Medicare Advantage plan, or change your Part D drug plan. Changes take effect January 1. This is your annual opportunity to review your coverage and make adjustments.

Original Medicare vs Medicare Advantage — how to choose

This is the central decision for most people entering Medicare. Neither option is universally better — the right choice depends on your health, your doctors, your medications, and your finances.

The key questions to ask when evaluating a Medicare Advantage plan: Are my current doctors in-network? Are my current medications on the plan’s formulary? What is the plan’s maximum out-of-pocket limit? What happens if I need care while traveling?

Common mistakes — and how to avoid them

• Assuming COBRA coverage protects you from Medicare penalties. It doesn’t. COBRA is not considered creditable employer coverage for Medicare purposes. When your initial enrollment window passes and you’re on COBRA, the penalty clock is running.
• Delaying Part B because you think you don’t need it. Even if you’re healthy, the late enrollment penalty can cost you thousands of dollars over your lifetime. Enroll on time unless you have qualifying active employer coverage.
• Not signing up for Part D because you don’t take prescription drugs. The Part D late enrollment penalty also lasts for life. Enrolling in a low-premium plan now — even if you don’t need it today — is usually the financially sound move.
• Choosing a Medicare Advantage plan based on premium alone. A $0 premium plan with a high out-of-pocket maximum or a narrow network can end up costing far more than a plan with a modest monthly premium and broader coverage.
• Missing the 6-month Medigap open enrollment window. When you first enroll in Part B, you have a 6-month window during which insurers must sell you any Medigap plan at standard rates regardless of your health. After that window closes, you may be denied coverage or charged higher rates based on pre-existing conditions (in most states).
• Forgetting to review your plan annually. Medicare Advantage and Part D plans change every year. Check your Annual Notice of Change letter in September and use Open Enrollment to make adjustments.

Questions to ask

Before choosing between Original Medicare and Medicare Advantage:

• Are my current doctors and specialists in this plan’s network?
• Are all my current prescription medications on this plan’s formulary, and at what tier?
• What is the maximum out-of-pocket limit for in-network services?
• If I need care while traveling, will this plan cover it?
• Does this plan require referrals to see specialists?
• What dental, vision, and hearing benefits are included, and what are their annual limits?
• Has this plan raised premiums or changed its network significantly in recent years?

Before enrolling, ask your HR department or benefits administrator:

• Is my employer’s health coverage considered “creditable” for Medicare purposes?
• If I enroll in Part A now, does that affect my HSA contributions?
• When my employer coverage ends, exactly how long do I have to enroll in Medicare?
• Does the company offer any retiree health coverage that works alongside Medicare?

Where to get official help

• Medicare.gov — the official source Compare plans, check drug formularies, find enrolled providers, and get official cost information. The Plan Finder tool at medicare.gov/plan-compare lets you compare Medicare Advantage and Part D plans in your ZIP code.
• SHIP — State Health Insurance Assistance Program Free, unbiased, one-on-one counseling from trained volunteers. Not affiliated with any insurance company. They can help you compare plans, understand your options, and review your coverage. Find your local SHIP at shiphelp.org or call 1-800-Medicare and ask for SHIP.
• 1-800-MEDICARE (1-800-633-4227) Available 24 hours a day, 7 days a week. Can answer questions about coverage, costs, and enrollment. TTY: 1-877-486-2048.
• Social Security Administration — 1-800-772-1213 For enrollment in Parts A and B, and for questions about IRMAA adjustments based on income.
• Benefits.gov Helps identify other benefit programs you may qualify for, including Medicare Savings Programs that help low-income beneficiaries pay for Medicare costs.
• Report Medicare fraud Call 1-800-HHS-TIPS (1-800-447-8477) or visit oig.hhs.gov. You can also contact the Senior Medicare Patrol (SMP) at smpresource.org.

What family members and caregivers should know

If you’re helping a parent or family member navigate Medicare, here’s what matters most:

• Check the enrollment window early. If your parent is approaching 65, mark the calendar for 3 months before their birthday — that’s when their Initial Enrollment Period opens. Don’t assume they’ll be automatically enrolled unless they’re already collecting Social Security.
• Review the Annual Notice of Change every September. If your parent has Medicare Advantage or Part D, their plan sends a notice of changes for the following year each September. Review it together and compare with other options before Open Enrollment closes December 7.
• Check that their doctors are in-network every year. Medicare Advantage networks change annually. A doctor who was in-network last year may not be this year.
• Watch for Medicare scam calls. Older adults receiving Medicare-related calls are a primary target of scammers. See our related guide, SM-003: Phone Scams: The 7 Red Flags, for the full picture.
• Get a SHIP counselor involved for major decisions. The free counseling from SHIP is genuinely valuable — a SHIP counselor who knows your parent’s specific medications, doctors, and ZIP code can identify the best plan in ways a general guide cannot.

Related guides

Sources and last-updated date