Medicare 101
Understanding Medicare — Plain and Simple
Medicare is made up of different parts, each covering different things. Here's what you need to know before you enroll.
What is Medicare?
Medicare is the federal health insurance program for people 65 and older (and some younger people with disabilities). It's not one single plan — it's a system of parts, each covering different types of care. Understanding how the parts fit together is the first step to making a confident decision.
When signing up for Medicare, most people choose Parts A & B. Because Part A has a large deductible and because you pay 20% of your actual medical costs in Part B and there's no prescription drug coverage, most people either add a Medicare Supplement and a Prescription Drug plan OR a Medicare Advantage plan (which usually includes prescriptions and extra benefits, like dental, vision, and hearing).
In the boxes below, I break down the different parts of Medicare, Advantage Plans, and Supplements. Remember that in order to add a Supplement or Advantage plan to Medicare, you need to have Parts A & B in force.
There is usually no cost for Part A, but the Part B premium is $202.90 per month for most people in 2026.
The Parts of Medicare
Part A
Hospital Insurance
Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
- Most people get Part A premium-free if they or their spouse paid Medicare taxes for at least 10 years
- Covers inpatient hospital stays after a deductible
- Covers skilled nursing facility care (after a qualifying hospital stay)
- Covers hospice care and some home health services
Part B
Medical Insurance
Covers doctor visits, outpatient care, preventive services, and medically necessary services.
- Requires a monthly premium (amount depends on your income)
- Covers doctor visits, outpatient procedures, and lab tests
- Covers preventive services like flu shots and cancer screenings
- You pay 20% of the Medicare-approved amount after your deductible
Part C
Medicare Advantage
An alternative way to get your Medicare benefits through a private insurer — often includes extra benefits like dental and vision.
- Offered by private insurance companies approved by Medicare
- Combines Part A and Part B coverage in one plan
- Often includes prescription drug coverage (Part D)
- May include extras like dental, vision, and hearing coverage
- Usually requires using a network of doctors
Part D
Prescription Drug Coverage
Helps cover the cost of prescription drugs. Available as a standalone plan or included in Medicare Advantage.
- Offered through private insurers approved by Medicare
- Covers a formulary (list) of prescription drugs
- Premiums, deductibles, and copays vary by plan
- Important: late enrollment can result in a permanent penalty
Enrollment Windows
When Can You Sign Up?
Timing matters with Medicare. Missing your enrollment window can mean gaps in coverage or permanent late-enrollment penalties. Here are the key windows to know.
Initial Enrollment Period (IEP)
7-month window around your 65th birthday
This is your first chance to sign up. It starts 3 months before the month you turn 65, includes your birthday month, and ends 3 months after. The sooner you sign up for Parts A & B, the sooner you can add a supplement or advantage plan for extra coverage.
Annual Enrollment Period (AEP)
October 15 – December 7 each year
During AEP you can switch Medicare Advantage plans, move between Original Medicare and Medicare Advantage, or join, switch, or drop a Part D drug plan. Changes take effect January 1 of the following year. Note: AEP does not apply to Medicare Supplement (Medigap) plans — those are tied to your IEP or a qualifying SEP.
Special Enrollment Period (SEP)
When you lose qualifying employer coverage
If you're still working at 65 and covered by employer insurance, you can delay Medicare without penalty. You get an 8-month special enrollment period after that coverage ends to enroll in Part B.
General Enrollment Period (GEP)
January 1 – March 31 each year
If you missed your IEP and don't qualify for a SEP, you can enroll during the GEP. Coverage starts the first of the month following the change and you may owe a late-enrollment penalty.
Common Mistakes
What to Watch Out For
Missing your Initial Enrollment Period
If you don't enroll in Part B when first eligible and don't have qualifying employer coverage, you may face a permanent 10% premium penalty for each 12-month period you delayed.
Assuming Medicare covers everything
Original Medicare (Parts A & B) has deductibles, copays, and no out-of-pocket maximum. Most people add a supplement or Advantage plan to fill the gaps.
Forgetting about Part D
Even if you don't take many prescriptions now, skipping Part D can result in a late-enrollment penalty later. It's usually worth enrolling in a low-cost plan.
Not comparing plans annually
Medicare plans can change their premiums, formularies, and networks every year. The plan that was right for you last year may not be the best fit this year.
Still have questions?
Medicare has a lot of moving parts, and everyone's situation is a little different. Reach out and I'll help you figure out what makes sense for you.