What if I miss my Initial Enrollment Period (EP)?

If you miss your IEP, you can sign up during the Medicare General Enrollment Period (GEP) that runs from January 1 to March 31 (with coverage beginning the month after you enroll).

When can I change my Medicare coverage?

You can change your Medicare coverage during the Annual Enrollment Period (AEP) from October 15 to December 7 or Special Enrollment Period (SEP) if you qualify. Medicare Advantage plans also offer a Medicare Advantage Open Enrollment period from January 1 through March 31, but keep in mind the rules are a little different if you want to change or switch your Medicare Supplement (Medigap) policy.

Can I enroll in a Medigap and Medicare Advantage plan at the same time?

No, you can’t enroll in these plans simultaneously—you can only have one or the other.

Is a Medigap plan better than a Medicare Advantage plan?

There is no right or wrong answer here since both options in fact work quite well. Decisions about which program best suits you also aren’t so clear-cut as each has its pros and cons, which is precisely why we recommend speaking with a financial advisor or Medicare expert accordingly. Click here to read more about Medicare Advantage and Medigap plans.

How does Medicare work in combination with private health insurance?

Medicare generally acts as your primary insurance alongside private insurance, with the bill first submitted to Medicare whenever you incur a healthcare expense before secondary insurance kicks in to cover any remaining balance. If you still belong to an employer group plan covering 20+ employees or one part of a multi-employer group health plan (often jointly sponsored by two or more employers), however, this would act as the first payer with Medicare as a secondary option—whether you have coverage via your employer or are covered by your spouse’s plan.

Can I obtain dental and vision coverage through Medicare?

While Original Medicare doesn’t cover routine dental or vision care, some Medicare Advantage plans do.

Can I still contribute to my HSA while on Medicare?

No, you are no longer eligible to make HSA contributions in this case but can continue to use the money in the account for eligible expenses.

Medicare Explained: Eligibility, Benefits, Costs, and More!

Medicare, the national health insurance program for U.S. citizens and permanent legal residents, is the most common insurance option for seniors. While we can trace national healthcare system chatter back to the early 1900s, the program wasn’t officially signed into law until 1965. Nineteen million people signed up for Medicare during its first year, with the program currently serving 69 million Americans (per the latest Centers for Medicare & Medicaid Services (CMS) data).

Since Medicare plays such an important role in medical costs as you age, it’s imperative you understand exactly how Medicare works—especially if retirement is on your horizon. Let’s dive in.

The four parts of Medicare

Medicare’s four parts each cover specific services, with Part A and Part B referred to as “Original Medicare” whereby the government pays healthcare providers directly for services rendered to patients. Nearly all physicians and hospitals in the United States accept Original Medicare, but let’s go ahead and explore all four parts in more detail…

Medicare Part A (hospital insurance)

Medicare Part A covers patient care in a hospital or skilled nursing facility, in-home hospice, and limited home healthcare services. Individuals who enroll in Medicare automatically receive Part A and are typically not required to pay a monthly premium—instead responsible for a deductible of $1,736 (as of 2026) for each benefit period beginning on the day of hospital or skilled nursing facility admission and ending 60 days after discharge. If a patient is readmitted to a hospital or skilled nursing facility again after this period, a new benefit period starts with the patient required to pay the deductible again.

Medicare Part B (medical insurance)

Medicare Part B covers medical services and supplies necessary to treat health conditions including visits to doctors and other healthcare providers, medical equipment, and ambulance services. It also provides coverage for some preventive services (e.g., annual wellness visits, flu shots, and screenings for cancer, diabetes, and cardiovascular disease). Individuals who lack “creditable coverage” from another source (e.g., through an employer) are required to enroll in Part B.

Most beneficiaries pay a monthly premium for Part B—starting at $202.90 in 2026 with increases based on income—either billed directly or automatically deducted from their Social Security check, if applicable. Everyone must meet a $283 deductible in 2026 before benefits kick in.

Medicare Part C (Medicare Advantage)

Medicare Part C, also known as Medicare Advantage, offers bundled plans as an alternative to Original Medicare (Parts A and B) via private Medicare-approved companies but with the same coverage as Original Medicare. Many of these plans also offer optional vision, dental, hearing, and prescription drug coverage—and some include extra services not covered by Original Medicare such as transportation to medical appointments. Original Medicare enrollment is a prerequisite to enroll in a Medicare Advantage plan, with monthly premiums for the latter varying based on specific benefits and deductibles and ranging from $0 to $200+.

Medicare Part D (prescription drug coverage)

Medicare Part D offers prescription drug coverage via private insurance companies approved by Medicare, with those eligible for Original Medicare automatically qualified for Part D following enrollment in Part A and/or Part B. Since Medicare Part D costs are unfortunately less than straightforward, standalone plan costs depend on various factors including the individual plan chosen, income, and medication needs. That said, Part D monthly premiums start at $34.50 in 2026—with increases based on income. Keep in mind those who have a Medicare Advantage plan that includes prescription drug coverage do not need separate Part D coverage.

How to qualify for Medicare

Most individuals qualify for full Medicare benefits at age 65 based on their own or their spouse’s employment history (or earlier if they have qualifying disabilities). Here are the requirements:

- You must be a U.S. citizen or a permanent legal resident who’s lived in the United States for at least five consecutive years.

- You or your spouse must have paid Medicare payroll taxes while working for a minimum of 10 years.

- You must be eligible to receive, or currently receiving, Social Security or Railroad Retirement Board benefits.

If you meet these criteria, you’ll receive basic Medicare coverage (Part A) at no cost when you turn 65. If you don’t but are a U.S. citizen or permanent legal resident who’s lived in the U.S. for at least five years, you can still receive full Medicare benefits but will need to pay for them.

How to enroll in Medicare

If you’ve been receiving Social Security or Railroad Retirement Board benefits for at least four months before turning 65, the government will typically automatically enroll you in Medicare Parts A and B when you reach this age (with your Medicare card likely arriving in the mail three months before your birthday along with instructions including details on how to decline Part B if you don’t need it). All other eligible folks have a seven-month window to enroll. This Initial Enrollment Period (IEP) begins three months prior to your 65th birthday and ends three months after your birthday month. You can apply for Medicare benefits online or over the phone.

Medicare Supplement plans help fill coverage gaps

Offered by various insurance companies, Medicare Supplement (Medigap) plans provide coverage for many out-of-pocket costs Original Medicare doesn’t cover (e.g., copayments and deductibles).

Part A includes a $1,736 deductible for each hospital stay, for example, meaning you’d need to pay a portion of daily costs for a stay longer than 60 days—with some or all of these expenses sometimes covered depending on the specific plan. Some Medigap policies even provide coverage for medical care when you travel outside of the U.S., a departure from Original Medicare. The initial open Medigap enrollment period lasts for six months, beginning on the date your Medicare Part B coverage becomes effective. Although you can still purchase a Medigap policy after this window closes, enrolling within the six-month period ensures insurers cannot deny you coverage or charge higher premiums due to any pre-existing conditions.

The biggest, most important item Medicare doesn’t cover

Medicare does not cover all healthcare-related expenses and has significant gaps in coverage. One of the most notable? Long-term care, the program providing only limited coverage in specific circumstances. This is particularly concerning with recent studies showing median annual nursing home care costs exceed $111,000, quickly putting retirement plans in jeopardy. Long-term care insurance policies, however, are designed to cover out-of-pocket expenses associated with home care, assisted living, and nursing home care—benefits Medicare and other public programs don’t cover. These policies offer several key advantages; not only do they help protect your savings, but they also provide additional care options (if you qualify for Medicaid, for example, you may be limited to facilities that accept payments from the program).

How income levels affect Medicare eligibility and premiums

While income doesn’t affect Medicare eligibility, Medicare does impose monthly surcharges on higher-income beneficiaries (known as IRMAA, short for "income-related monthly adjustment amount”). These are added to standard Medicare Part B and D premiums, potentially leading to significantly higher out-of-pocket costs—sometimes several hundred dollars more per month.

The IRMAA surcharge is calculated based on tax returns from two years prior. For example, your income in 2026 will determine your IRMAA in 2028, your income in 2027 will set your IRMAA in 2029, and so on. This two-year lag can lead to unexpected costs when those unaware of IRMAA first enroll in Medicare, especially if their income drops significantly post-retirement.

Medicare late enrollment penalties

If you miss your Initial Enrollment Period (IEP) enrollment window and don’t qualify for a “Special Enrollment Period” (SEP)—falling outside the standard enrollment window and typically granted after a qualifying life event such as losing health coverage or moving—you may incur late-enrollment penalties. Here’s what you need to know about this:

Medicare Part A

If you fail to qualify for free Part A premiums because you or your spouse didn’t meet the Medicare tax threshold while working (typically requires at least 10 years) and don’t enroll during your initial eligibility period, your monthly premium could increase by 10%. A late-enrollment penalty of 10% will also be applied for double the number of years you were eligible to sign up but failed to (e.g., if you were eligible for Part A for two years but didn’t enroll, you’ll need to pay the higher premium for four years).

Medicare Part B

You’re required to enroll in Medicare Part B if you lack “creditable coverage” from another source such as an employer. Should you fail to enroll, you may incur a penalty of 10% of your monthly premium for each 12-month period you could have had Part B but didn’t. If you wait 24 months to sign up for Part B (without qualifying for a “Special Enrollment Period”) for example, you’ll need to pay a 20% late-enrollment penalty.

Medicare Part D

Medicare Part D is indeed optional, but remember you’ll incur a late-enrollment penalty if you choose to enroll later on and lack credible prescription drug coverage for more than 63 consecutive days after your initial eligibility—with the penalty amount reflecting 1% of your premium for each month you could’ve enrolled but didn’t (12% for each year). What’s more, this penalty is permanent for as long as you have Medicare coverage.

In sum: Medicare 101

With healthcare expenses constantly rising over time, it’s important to know your Medicare options to help combat them—especially during retirement. Find Medicare options confusing? You certainly aren’t alone. Thankfully, a Medicare insurance expert or financial advisor can help you navigate the program to ultimately pinpoint the best option(s) for our own unique needs.

Still have questions about Medicare? Schedule a FREE discovery call with one of our CFP® professionals to get them answered.

FAQs

If you miss your IEP, you can sign up during the Medicare General Enrollment Period (GEP) that runs from January 1 to March 31 (with coverage beginning the month after you enroll).
You can change your Medicare coverage during the Annual Enrollment Period (AEP) from October 15 to December 7 or Special Enrollment Period (SEP) if you qualify. Medicare Advantage plans also offer a Medicare Advantage Open Enrollment period from January 1 through March 31, but keep in mind the rules are a little different if you want to change or switch your Medicare Supplement (Medigap) policy.
No, you can’t enroll in these plans simultaneously—you can only have one or the other.
There is no right or wrong answer here since both options in fact work quite well. Decisions about which program best suits you also aren’t so clear-cut as each has its pros and cons, which is precisely why we recommend speaking with a financial advisor or Medicare expert accordingly. Click here to read more about Medicare Advantage and Medigap plans.
Medicare generally acts as your primary insurance alongside private insurance, with the bill first submitted to Medicare whenever you incur a healthcare expense before secondary insurance kicks in to cover any remaining balance. If you still belong to an employer group plan covering 20+ employees or one part of a multi-employer group health plan (often jointly sponsored by two or more employers), however, this would act as the first payer with Medicare as a secondary option—whether you have coverage via your employer or are covered by your spouse’s plan.
While Original Medicare doesn’t cover routine dental or vision care, some Medicare Advantage plans do.
No, you are no longer eligible to make HSA contributions in this case but can continue to use the money in the account for eligible expenses.

About the author
The content in this post was developed by our team of writers and reviewed by our team of CFP® professionals here at Vision Retirement.

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