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The Four Parts of Medicare
Before anything else, know what each part covers — and what you'll need to decide about each one.
A
Hospital Insurance
Inpatient hospital stays, skilled nursing, hospice. Free for most people with 40+ work quarters. Sign up at 65 regardless of your situation.
B
Medical Insurance
Doctor visits, outpatient care, preventive services. Costs $202.90/month in 2026. You may be able to delay if still working with qualifying coverage.
C
Medicare Advantage
Private plans that bundle A+B (usually with D). An alternative to Original Medicare — you choose one or the other. Compare at Medicare.gov.
D
Prescription Drugs
Drug coverage added to Original Medicare, or bundled in Part C. National base premium $38.99/month in 2026. Skipping it when eligible triggers a permanent penalty.
Your 7-month Initial Enrollment Period (IEP)
3 months
before birthday
Your
birth month
3 months
after birthday
Best time to sign up: the 3 months before your birthday. Sign up then and your coverage starts with no gap on the 1st of your birth month. If your birthday falls on the 1st of the month, your IEP and coverage start one month earlier than normal. Source: medicare.gov
Which path applies to you?
Auto-enrolled
Already receiving Social Security
Medicare enrolls you automatically. You still need to make decisions about Part B and drug coverage.
See your steps
Must apply
Not yet on Social Security
You must actively apply. Missing your window means delays and a permanent penalty on your premium.
See your steps
Special rules
Still working with employer coverage
You may be able to delay Part B — but only under specific conditions. Employer size is the key factor.
See your steps
Sources: medicare.gov | cms.gov | 2026 cost figures from CMS Product No. 11579, December 2025.
Path A
Already Receiving Social Security
Because you're getting Social Security at least 4 months before turning 65, Medicare automatically enrolls you in Part A and Part B. You don't need to apply — but you do need to make important decisions.
Auto-enrolled: SSA will mail your red-white-and-blue Medicare card about 3 months before your 65th birthday. If it doesn't arrive, call 1-800-MEDICARE. Source: medicare.gov
6
6 months before your 65th birthday
Start learning your options
You don't need to apply, but you do need to make decisions. Research the difference between Original Medicare (Parts A+B with a Medigap supplement) and Medicare Advantage (Part C — an all-in-one private plan). These are two fundamentally different approaches, and the choice matters.
3
3 months before your birthday
Watch for your Medicare card in the mail
Your welcome packet and Medicare card will arrive. Keep it — do not laminate it. This confirms your enrollment is happening automatically.
3
3 months before your birthday
Decide: keep Part B or decline it?
Part B costs $202.90/month in 2026. You can only decline it without penalty if you have active employer group health coverage from a current job (yours or a spouse's) at a company with 20+ employees.
Important: COBRA, retiree coverage, and marketplace/ACA plans do NOT qualify as grounds to delay Part B. Declining incorrectly causes a permanent 10% penalty per year delayed. Source: medicare.gov
65
At age 65 — coverage begins
Part A and Part B take effect automatically
Part A begins the 1st of your birth month (or the month before if your birthday is on the 1st). Part B starts the same day unless you declined it. Your $202.90/month Part B premium is deducted directly from your Social Security check.
+
After enrollment — choose your coverage
Add drug coverage (Part D) and supplemental coverage
Original Medicare has no cap on out-of-pocket costs. Most people add a Medigap (supplement) policy or switch to a Medicare Advantage plan. You also need drug coverage — either a standalone Part D plan or one bundled inside a Part C plan.
Don't skip Part D. Going more than 63 consecutive days without creditable drug coverage triggers a permanent monthly penalty when you eventually join. Source: cms.gov
Sources: medicare.gov/basics/get-started-with-medicare/before-65 | cms.gov/medicare/enrollment-renewal/original-part-a-b | CMS Product No. 11579 (December 2025)
Path B
Not Yet Receiving Social Security
You are not automatically enrolled. You must actively apply. Medicare will not come to you — missing your window means waiting months and paying a permanent penalty.
Action required: Apply at ssa.gov, call 1-800-772-1213, or visit a local Social Security office. Do not wait for Medicare to contact you.
6
6 months before your 65th birthday
Get organized and create your mySocialSecurity account
Go to SSA.gov and create a free mySocialSecurity account. This is where you'll apply for Medicare online. Gather what you'll need: Social Security number, proof of citizenship or legal residency, and employment history.
3
3 months before your birthday — apply now
Apply for Part A and Part B at SSA.gov
Applying in the 3 months before your birth month means your coverage starts on the 1st of your birth month with no gap. Applying in or after your birth month delays your Part B start date. Don't wait until your birthday.
You can take Medicare now and delay Social Security. Signing up for Medicare at 65 does not require you to start Social Security retirement benefits. Many people delay Social Security to 67–70 to maximize their monthly benefit. These are separate decisions. Source: ssa.gov
65
At age 65 — coverage begins
Part A and Part B take effect
Part A starts on the 1st of your birth month (free for most — requires 40+ work quarters). Part B starts the same month if you applied in the 3-month window. You'll be billed $202.90/month for Part B in 2026 (income may adjust this amount).
+
After enrollment — add your full coverage
Add drug and supplemental coverage
You now have a time-limited window — tied to your enrollment date — to enroll in a Medicare Advantage plan, Medigap policy, or Part D drug plan. These windows close. Use Medicare.gov/plan-compare to evaluate options in your zip code.
Don't skip Part D. Going 63+ days without creditable drug coverage = a permanent monthly penalty for life when you join later. Source: cms.gov
?
VA coverage and Part D
Veterans: VA drug coverage counts as creditable
If you have VA prescription drug coverage, it counts as creditable coverage for Part D — meaning you can delay Part D without penalty as long as you maintain VA coverage without a gap of 63+ days. However, VA coverage does not protect you from the Part B late enrollment penalty. That's a separate decision.
Note: VA drug coverage only applies to prescriptions filled through the VA. If you fill prescriptions outside the VA system, you could face uncovered costs without Part D. Source: cms.gov
Sources: medicare.gov/basics/get-started-with-medicare/sign-up | cms.gov/medicare/enrollment-renewal/original-part-a-b | ssa.gov
Path C
Still Working at 65 with Employer Coverage
This path has the most room for costly mistakes. Whether you can delay Part B without penalty depends entirely on your employer's size and your coverage type.
Most important first step: Ask your HR department how many employees your company has. This single number determines your entire Medicare strategy. Source: medicare.gov
Employer size — the deciding factor
20 or more employees
Your employer plan is primary. Medicare is secondary while you're actively working. You can delay Part B without penalty. Sign up for Part A now (free for most). When you stop working, you have an 8-month Special Enrollment Period to add Part B.
Fewer than 20 employees
Medicare is primary — your employer plan pays second. You must enroll in both Part A and Part B at 65. If you don't, your employer plan may refuse to pay costs Medicare should have covered. Do not delay. Source: medicare.gov
6
6 months before your 65th birthday
Talk to HR — get answers in writing
Ask: (1) How many employees does the company have? (2) Is our plan considered an employer group health plan under IRS rules? (3) Will my coverage change if I enroll in Medicare? (4) Is our drug coverage creditable for Medicare Part D?
3
3 months before your birthday
Enroll in Part A — most working people should do this
Part A is free for most people and enrolling doesn't force you to also take Part B. Apply at ssa.gov. Having Part A gives you a safety net if your employment situation changes unexpectedly.
HSA exception: If you contribute to a Health Savings Account, enrolling in Part A stops your ability to make new HSA contributions. Plan this carefully. Source: medicare.gov
65
At age 65
Part B — delay only if you have qualifying 20+ employee coverage
20+ employee active employer plan: you can delay Part B with no penalty. Fewer than 20 employees, COBRA, retiree coverage, or marketplace plan: enroll in Part B now. Do not assume your current coverage qualifies without confirming with HR.
!
When you stop working
Your 8-month Special Enrollment Period (SEP) begins immediately
The moment you stop working — or lose employer coverage, whichever comes first — an 8-month SEP window opens. You must sign up for Part B within this window to avoid the permanent penalty. The SEP starts when employment ends, not when COBRA ends.
Critical: Do not wait for COBRA to end before signing up. COBRA coverage does not extend your enrollment window. The 8-month SEP starts when employment ends — period. Source: medicare.gov
+
After Part B — add drug and supplemental coverage
You have a window tied to your SEP
After enrolling via SEP, you have a separate window to join Medicare Advantage or a Medigap plan. For Part D: as long as your employer drug coverage was creditable, you can delay without penalty. Ask your employer annually — they're required by law to send you a creditable coverage notice every year.
These do NOT count as qualifying coverage to delay Part B: COBRA | Retiree coverage from a former employer | Marketplace/ACA plans | VA coverage (in most situations) | Medicaid. Only active employer group health plan coverage from a current employer (yours or a spouse's) with 20+ employees qualifies. Source: medicare.gov
Sources: medicare.gov/basics/get-started-with-medicare/medicare-basics/working-past-65 | cms.gov/medicare/enrollment-renewal/original-part-a-b
2026 figures — verified from CMS
What Medicare Costs in 2026
All figures below come from the official CMS 2026 Medicare Costs fact sheet (Product No. 11579, December 2025). These numbers change annually — always verify at medicare.gov.
Part A premium
$0
For most people with 40+ work quarters. Up to $565/mo if you must buy it.
Part A deductible
$1,736
Per benefit period — not per year. Days 61–90: $434/day.
Skilled nursing (days 21–100)
$217/day
Days 1–20 are free. After day 100 you pay all costs.
Part B premium
$202.90
Standard monthly amount. Higher if 2024 income exceeded $109,000 (single).
Part B deductible
$283/yr
Annual. After that, Medicare pays 80% of covered services.
Part D base premium
$38.99
National base per month. Actual plan premiums vary. Used to calculate penalties.
Part B IRMAA — income-adjusted premiums for 2026
Based on your 2024 income as filed with the IRS. If income dropped since then (retirement, life event), you can appeal using Form SSA-44.
| Individual income (2024) |
Joint income (2024) |
Monthly Part B (2026) |
| $109,000 or less | $218,000 or less | $202.90 |
| $109,001 – $137,000 | $218,001 – $274,000 | $284.10 |
| $137,001 – $171,000 | $274,001 – $342,000 | $405.80 |
| $171,001 – $205,000 | $342,001 – $410,000 | $527.50 |
| $205,001 – $499,999 | $410,001 – $749,999 | $649.20 |
| $500,000 or above | $750,000 or above | $689.90 |
Income dropped since 2024? If you retired or had a major life event, you can appeal your IRMAA by contacting Social Security and filing Form SSA-44. You may qualify for the standard rate.
Source: CMS Product No. 11579, December 2025 — medicare.gov/publications/11579-medicare-costs.pdf
Know before you miss your window
Penalties — Permanent, Monthly, and Avoidable
These are not one-time fees. They are added to your premium every single month for as long as you have Medicare. The longer you wait, the higher they go.
B
Part B Late Enrollment Penalty
10% added to your Part B premium for each full 12-month period you were eligible but didn't enroll — without qualifying coverage. This stays with you for life.
Example: 2 years late → 20% penalty. $202.90 becomes ~$243.48/month — permanently.
What does NOT protect you: COBRA, retiree coverage, marketplace plans, VA coverage (usually), or Medicaid. Only active employer group health coverage from a 20+ employee company qualifies. Source: medicare.gov
D
Part D Late Enrollment Penalty
1% of the national base premium ($38.99 in 2026) for each month you went without creditable drug coverage — after going 63+ consecutive days uninsured. Stays with you for life.
Example: 14 months without coverage → 14% penalty → ~$5.46/month added to your plan premium permanently.
VA exception: VA prescription drug coverage does count as creditable for Part D. Veterans can delay Part D without penalty as long as they maintain VA drug coverage without a gap exceeding 63 days. Source: cms.gov
A
Part A Late Enrollment Penalty (rare)
Only affects people who must buy Part A — those with fewer than 40 work quarters. If they delay, their premium goes up 10% and that penalty lasts twice as long as the delay period. Most people get Part A free and this never applies.
Example: 2 years late → 10% penalty → paid for 4 years.
Sources: medicare.gov/basics/costs/medicare-costs/avoid-penalties | cms.gov creditable coverage guidance | CMS Product No. 11579 (December 2025)