Medicare decisions around your 65th birthday can affect your costs for years. Knowing the parts and the deadlines makes them manageable.
Key points
- Part A covers hospital care; Part B covers doctor visits and outpatient care; Part D covers prescription drugs.
- Medicare Advantage (Part C) plans are an alternative way to get your Medicare benefits through private insurers.
- Your initial enrollment period lasts seven months around your 65th birthday.
- Signing up late for Part B can mean a penalty of 10% for each full 12 months you could have had it.
- In 2026, out-of-pocket costs for covered Part D drugs are capped at $2,100.
Medicare is federal health insurance for people 65 and older and some younger people with disabilities. It comes in parts, and the choices you make when you first become eligible matter.
The parts of Medicare
| Part | What it covers |
|---|---|
| Part A | Hospital stays, skilled nursing facility care, hospice and some home health care |
| Part B | Doctor visits, outpatient care, preventive services and medical equipment |
| Part C (Medicare Advantage) | Private plans that provide Part A and B benefits, often with drug coverage |
| Part D | Prescription drug coverage |
Most people don’t pay a premium for Part A because they or a spouse paid Medicare taxes while working. Part B has a monthly premium.
Original Medicare or Medicare Advantage
- Original Medicare (Parts A and B): you can use any provider that accepts Medicare. Many people add a Part D drug plan and a Medigap policy.
- Medicare Advantage: private plans with networks, often including drug coverage and extra benefits, with their own costs and rules.
When to enroll
Your initial enrollment period lasts seven months: the three months before the month you turn 65, your birthday month and the three months after. If you miss it, the general enrollment period runs from January 1 to March 31 each year.
Important
If you don’t sign up for Part B when first eligible and don’t have qualifying coverage from current employment, you may pay a late enrollment penalty of 10% for each full 12-month period you could have had Part B, for as long as you have it.
Drug costs
Since 2025, there’s an annual cap on out-of-pocket costs for covered Part D drugs. In 2026, the cap is $2,100. Monthly premiums don’t count toward it.
Getting help
Free counseling is available from your State Health Insurance Assistance Program (SHIP). If you’re leaving a job near 65, see our guide to COBRA and job loss, and for terms such as deductibles and coinsurance, our guide to health insurance terms.
Frequently asked questions
Do I need Part B if I’m still working?
If you or your spouse have health coverage through current employment, you may be able to delay Part B without a penalty and sign up later during a special enrollment period. Check how your employer coverage works with Medicare first.
What is Medigap?
Medicare Supplement Insurance, or Medigap, is private insurance that helps pay costs Original Medicare doesn’t, such as deductibles and coinsurance. It works with Original Medicare, not Medicare Advantage.
When can I change my plan?
During open enrollment, October 15 to December 7 each year, you can switch between Original Medicare and Medicare Advantage or change drug plans.
Where can I get free, unbiased help?
Your State Health Insurance Assistance Program (SHIP) offers free counseling. You can also call 1-800-MEDICARE.
This guide is general information, not insurance, tax or legal advice. Rules, limits and deadlines change each year, so check HealthCare.gov, Medicare.gov or your insurer for your situation.