How does Medicare work? — Parts, costs, choices, and what to do at 65

Original Medicare is Parts A and B — federal coverage that lets you see any doctor or hospital that accepts Medicare nationwide. To round it out, most people add a Medigap supplement (covers what A and B don't) plus a standalone Part D drug plan.

Medicare Advantage (Part C) is a private alternative bundle. Insurance companies contract with Medicare to provide your Parts A and B coverage, almost always with a built-in Part D drug benefit. Networks are usually narrower than Original Medicare and care often requires plan approval, but plans frequently include extras like dental, vision, and gym memberships.

The right choice depends on your health, providers, prescriptions, and state. Free, unbiased help is available through SHIP at 1-877-839-2675 or Chapter Medicare.

If you have group health insurance through current active employment with 20+ employees (yours or your spouse's), you can usually delay Medicare Part B without the late-enrollment penalty. When that coverage ends, you get an 8-month Special Enrollment Period.

Most people in this situation still enroll in Part A at 65 because it's premium-free if you have 40 work credits — but check first if you're contributing to a Health Savings Account (HSA), because Medicare enrollment ends HSA contributions.

If you missed your 7-month Initial Enrollment Period without qualifying coverage, the General Enrollment Period runs January 1 to March 31 each year. Coverage starts the month after you enroll.

The Part B late-enrollment penalty is 10% added to your premium for every 12 months you were late — permanently. If you delayed 3 years past your IEP, your Part B premium is 30% higher for life.

No. Medicare does not cover most dental, vision, hearing aids, long-term custodial care, or care outside the United States (with limited exceptions). It also has cost-sharing — deductibles, copays, and a 20% coinsurance for most Part B services with no annual out-of-pocket cap on Original Medicare.

This is why most people add either a Medigap supplement (covers most cost-sharing) or pick a Medicare Advantage plan that bundles in extras and caps annual out-of-pocket spending.

Part A is premium-free for people with 40 work credits (about 10 years of paying Medicare taxes). Part B has a standard premium of $202.90 in 2026, more for higher incomes (IRMAA).

There's no version of Medicare that costs nothing for everyone. Even Medicare Advantage plans with $0 premiums still leave you responsible for the Part B premium, plus copays and coinsurance up to the plan's annual out-of-pocket maximum.

IRMAA is the Income-Related Monthly Adjustment Amount — an extra charge on top of your Part B and Part D premiums if your modified adjusted gross income is above certain thresholds. The 2026 starting threshold is $109,000 for single filers and $218,000 for joint filers.

IRMAA is based on your tax return from two years ago. If your income has dropped because of a life-changing event — retirement, divorce, death of a spouse, work reduction — you can request reconsideration with Form SSA-44.

Once you enroll in any part of Medicare — including Part A — you can no longer make new HSA contributions. You can still spend down what's in your HSA tax-free for qualified medical expenses, including some Medicare costs.

If you're working past 65, contributing to an HSA, and considering delaying Medicare Part A: Social Security retirement benefits trigger automatic Part A enrollment that goes back up to 6 months. People sometimes have to repay HSA contributions made during that lookback period.

Retiree health plans are NOT considered active employer coverage for Medicare late-enrollment purposes. If you're retired with retiree benefits, sign up for Medicare during your IEP — don't delay.

Once you have both Medicare and retiree coverage, Medicare typically pays first. Some retiree plans coordinate with Medicare and become a kind of supplement; others reduce coverage substantially when you become Medicare-eligible. Read your retiree plan documents carefully and consider how Medigap or Medicare Advantage compares.

If your spouse was covered as a dependent on your employer plan, your move to Medicare may make them ineligible to stay on the plan — confirm with HR. Sometimes the spouse can elect COBRA for up to 36 months. Sometimes they need to find their own coverage on the marketplace until they reach 65.

This is one of the most common 'I didn't realize' moments at SSA. If your spouse is younger than 65 and depended on your group plan, plan their alternative coverage before you trigger your Medicare or Social Security enrollment.

Two free resources for unbiased help: SHIP (State Health Insurance Assistance Program) at 1-877-839-2675 — federally funded, state-administered, no plan sales — and Chapter Medicare at (352) 841-0632, which provides a free plan comparison from licensed Medicare advisors and is a trusted partner of 24Help.

Do NOT make this decision based on a TV ad, a mailer, or a cold call. Cold-calling about Medicare plans is barred by federal rules — if someone cold-calls you about a Medicare plan, hang up and report it.