Chapter one
What are the four parts of Medicare?
Two of the four parts are the real Medicare (A and B), one is a private replacement for it (C), and one is drug coverage (D). Once you see it that way, the alphabet stops being scary.
Hospital insurance
Covers hospital stays, skilled nursing after a hospital stay, and hospice. Premium-free for almost everyone who worked 10+ years. There's a $1,736 deductible per hospital benefit period in 2026.
Medical insurance
Doctors, outpatient care, tests, equipment. Costs $202.90 a month in 2026 (more for high earners). After a $283 yearly deductible, Medicare pays 80% and you pay 20%, with no cap. That uncapped 20% is why the next two things exist.
Medicare Advantage
Not extra coverage. A private plan that replaces A and B (and usually includes D). You still pay the Part B premium; the plan runs your care through its network and its rules.
Drug coverage
Prescription coverage from private insurers. Standalone plans run $0 to $50ish a month. In 2026, your out-of-pocket costs for covered drugs are capped at $2,100 a year, a genuinely big recent improvement.
Missing from the alphabet: Medigap, also called Medicare Supplement. It's private insurance that pays the 20% Original Medicare leaves you. It pairs with A and B, never with C.
Chapter two
What's the actual decision I need to make?
One fork: Original Medicare plus Medigap plus a drug plan, or a Medicare Advantage plan. Everything else is detail that follows from which side you take.
Path one costs more every month, roughly $340 to $460 all-in at 2026 rates, and in exchange you get any doctor in America who takes Medicare, no referrals, no prior authorizations for most care, and bills so predictable that many Medigap holders never see one. Path two costs $203 to $255 a month, often bundles dental and vision, and in exchange your care runs through a network with the plan sitting between you and some treatments, and copays that add up in the years you're actually sick.
Neither is a scam and neither is a free lunch. Advantage plans are how a healthy 65-year-old on a budget keeps costs down. Medigap is how a snowbird with a cardiologist she trusts sleeps at night. The decoder's whole job is figuring out which of those people you are, and it takes five minutes.
The one-way door most people miss
You can switch from Medigap to Advantage almost any year. Coming back the other way is the hard part: outside your original 6-month window, most states let Medigap insurers review your health and decline you or charge more. So "I'll try the cheap plan and upgrade later if I get sick" often doesn't work, precisely because you'll be sick. This single fact should carry real weight in your decision, and it's the fact broker ads never mention.
Chapter three
What does Medicare cost in 2026?
The standard Part B premium is $202.90 a month in 2026, up $17.90 from 2025. Nearly everyone pays it, on either path. Here's the full picture:
| Item | What it is | 2026 amount |
|---|---|---|
| Part A premium | Free if you (or a spouse) worked ~10 years | $0 for most |
| Part A hospital deductible | Per benefit period, not per year | $1,736 |
| Part B premium | Everyone pays this, monthly | $202.90 |
| Part B deductible | Once per year, then 80/20 split | $283 |
| Part B surcharge (IRMAA) | Kicks in above $109k single / $218k joint income | $284.10–$689.90 total |
| Medigap Plan G | National range; varies by state, age, insurer | ~$100–$250/mo |
| Part D drug plan | Standalone; deductible up to $615 | $0–$50/mo |
| Part D out-of-pocket cap | Yearly max for covered drugs | $2,100 |
| Advantage plan premium | On top of Part B; varies by plan | Often $0–$50/mo |
Source: CMS, 2026 Medicare Parts A & B Premiums and Deductibles (released November 14, 2025) and the Federal Register Part B notice. Medigap and Advantage premium ranges are national estimates; exact prices vary by plan and zip code.
One trap in that table: IRMAA, the income surcharge, is based on your tax return from two years ago. Plenty of people retire at 65, watch their income fall off a cliff, and still get billed like their peak-earning self. If that's you, file form SSA-44 with Social Security and ask for a redetermination based on your "life-changing event." It works, and almost nobody knows to do it.
Chapter four
When do I need to sign up, and what happens if I'm late?
Your main window is 7 months long: the 3 months before your 65th birthday month, your birthday month, and the 3 months after. Medicare enforces its deadlines with permanent premium penalties, so these dates are worth writing down.
7 months around your 65th birthday
October 15 – December 7, every year
January 1 – March 31
Chapter five
What is the Medigap window everyone warns about?
For 6 months after your Part B starts, every Medigap insurer in your state must sell you any plan at the standard price, no health questions asked. It's the only federally guaranteed window like it, and it doesn't repeat. Don't take our word for it: Medicare.gov describes the same 6-month rule here. And if you're weighing which plan to buy inside that window, we've done the Plan G vs. Plan N math.
After it closes, most states allow medical underwriting: the insurer can review your health history and charge you more or turn you down flat. A handful of states are kinder (New York and Connecticut guarantee access year-round; a few others have birthday rules or switching rights), but planning around your state being the exception is a gamble.
Practical translation: if there's any real chance you want Medigap, the time to decide is inside that window, while the door is legally propped open. This is the deadline the decoder weighs most heavily, because it's the one you can't fix later with money.
Chapter six
I'm still working at 65. Do I have to enroll?
If your coverage comes from a current employer with 20 or more employees, no. You can delay Part B penalty-free and enroll within 8 months of that coverage ending. Under 20 employees, Medicare becomes primary at 65, so enroll on time.
Three fine-print points that catch people. First, COBRA and retiree coverage don't count as "current employment," so they don't protect you from the penalty. Second, most people enroll in premium-free Part A even while working, unless they're contributing to an HSA, which Part A enrollment shuts down. Third, get the 20-employee answer from HR in writing; "I think we're big enough" is a bad basis for a lifelong premium.
Show your work
Where every number on this page comes from
Every dollar figure above is a published federal amount, not our estimate. Here are the primary sources, so you can check us:
- CMS.gov2026 Medicare Parts A & B Premiums and Deductibles: the official fact sheet behind the Part B premium ($202.90), Part B deductible ($283), Part A deductible ($1,736), and the IRMAA surcharge brackets.
- FederalRegister.govPart B premium and deductible notice for 2026: the legal publication of the same figures.
- Medicare.govDrug coverage costs: the Part D late penalty formula and the $38.99 national base premium, plus the 2026 rules for deductibles and the $2,100 out-of-pocket cap.
- Medicare.govBuying a Medigap policy: the 6-month Medigap open enrollment window and what happens after it closes.
- SSA.govSign up for Medicare: where enrollment actually happens, and form SSA-44 for reducing an income surcharge after retirement.
- Medicare.govThe Medicare & You handbook: the official 100-page version of this page. Everything we decode, it says first.
Figures checked against these sources in July 2026. When CMS publishes 2027 amounts (usually each fall), this page gets updated within weeks.