Navigating Medicare can feel overwhelming as you approach retirement. Between deciding when to enroll and choosing which parts to sign up for, even experienced retirees can feel daunted. With options like Part A, Part B, Part D, Medigap supplemental plans, and Medicare Advantage, it’s important to understand the basics before making decisions. The annual Medicare Open Enrollment period runs from October 15 to December 7, giving beneficiaries a chance to make changes for the upcoming year.
The digital version of the 2026 “Medicare & You” handbook is available for download and provides detailed explanations about coverage, prescription plans, your rights, and upcoming changes to Medicare. Here’s a concise guide to 12 essential things to know about Medicare in 2026.
1. Medicare Coverage Comes With Costs
Medicare is divided into multiple parts. Part A, which covers hospital care, is usually free if you or your spouse contributed to Medicare through payroll taxes for at least 10 years. Those who don’t qualify for free Part A must pay a monthly premium of several hundred dollars. The 2026 Part A hospital deductible has increased to $1,736, up $60 from 2025.
Part B covers outpatient care and doctor visits. In 2026, the standard monthly premium is $202.90, a $17.90 increase from the previous year.
Part D provides prescription drug coverage, with premiums varying by plan. On average, a stand-alone Part D plan costs $34.50 per month, slightly lower than the 2025 average of $38.31. Keep in mind that all Medicare parts may include co-payments, deductibles, and other out-of-pocket costs.
2. Annual Cap on Out-of-Pocket Part D Costs
For 2026, Medicare Part D plans limit out-of-pocket prescription drug costs to $2,100 per year, with the cap adjusted annually based on per capita drug spending. Beneficiaries can spread payments throughout the year via the Medicare Prescription Payment Plan (MPPP) after approval from their Part D or Medicare Advantage plan. Note that this cap only applies to Part D medications, not drugs covered under Part B, which typically include in-office injections, infusions, and some outpatient medications.
3. Medigap Plans Fill Coverage Gaps
If you enroll in Original Medicare, a Medigap (supplemental insurance) policy can help cover deductibles, co-pays, and other expenses not covered by Parts A and B. Medigap plans are offered by private insurers and are labeled A through N, with each lettered plan offering the same standard benefits.
Popular Plan F is no longer available to new enrollees after 2020. A close alternative is Plan G, which covers the same benefits except for the Part B deductible. Switching Medigap plans after the initial six-month enrollment period could involve higher premiums or denial of coverage depending on your health.
4. Medicare Advantage Offers an All-in-One Option
Medicare Advantage (Part C) combines hospital, medical, and sometimes prescription drug coverage through private insurers. If enrolled in an Advantage plan, you cannot maintain a Medigap policy.
Premiums for Medicare Advantage vary, but they often cost less than a combination of Original Medicare plus a Medigap plan. Advantage plans also have an out-of-pocket maximum, which for 2026 is $9,250 in-network or $13,900 including out-of-network care. However, provider networks can be more limited than Original Medicare. Some sicker beneficiaries find that switching back to Original Medicare can be financially beneficial.
5. Higher Income Means Higher Premiums
If your income exceeds certain thresholds, you’ll pay extra for Parts B and D. For 2026, single filers with AGI above $109,000 ($212,800 for married couples) pay additional surcharges on top of the standard premium. Part D income-related surcharges range from $14.50 to $91 per month, depending on income. These additional fees apply whether you have Original Medicare or a Medicare Advantage plan.
6. Timing Your Medicare Enrollment
If you’re already receiving Social Security, you’ll automatically be enrolled in Parts A and B. You can decline Part B, but Part A cannot be waived. Those not yet on Social Security must enroll during a seven-month initial enrollment window, which begins three months before your 65th birthday and ends three months afterward.
Working retirees with employer coverage may delay enrollment without penalty, but must enroll within eight months of leaving employer coverage to avoid late penalties.
7. The Four Medicare Enrollment Windows
- General Enrollment – January 1 to March 31 for those who missed the initial period. Coverage starts July 1 with a 10% lifetime penalty for each year delayed.
- Special Enrollment – For those covered by employer insurance, lasts eight months after losing coverage. No penalty applies.
- Open Enrollment – October 15 to December 7. You can switch Part D or Medicare Advantage plans, or move between Original Medicare and Advantage.
- Advantage Plan Changes – From January 1 to March 31, current Advantage enrollees can switch plans or return to Original Medicare. A five-star Advantage or Part D plan can also be selected outside of these periods.
8. Free Preventive Care and Vaccines
Medicare covers a variety of preventive services, including an annual wellness visit, cardiovascular screenings every five years, mammograms, flu shots, and cancer screenings for cervical, prostate, and colorectal cancers.
9. Telehealth Coverage
Medicare Advantage has long covered telehealth, while Original Medicare initially limited it to specific devices and facilities. Telehealth coverage was extended by the Consolidated Appropriations Act of 2026. After December 31, 2027, most telehealth services will require rural-based offices, though mental and behavioral health services can still be accessed from home.
10. What Medicare Doesn’t Cover
Medicare generally does not cover long-term custodial care, dental, hearing aids, or routine vision services. Coverage for skilled nursing or home healthcare is provided under limited conditions after hospitalization. Long-term care must be paid through savings, long-term-care insurance, or Medicaid if eligible.
11. Using an HSA for Medicare Costs
Once enrolled in Medicare, you cannot contribute to a Health Savings Account (HSA). However, you can withdraw funds tax-free to pay Medicare premiums, co-pays, and qualified medical expenses, including costs from previous years. HSA funds can pay for Parts B, D, and Medicare Advantage premiums, but not Medigap premiums.
12. You Can Appeal Medicare Decisions
If you disagree with a coverage or payment decision, Medicare and Medicare Advantage plans have a five-level appeals process. For urgent cases where your health is at risk, a fast appeal can be requested, which must be decided within 72 hours if approved. Gather supporting documentation from your providers to strengthen your case.
