How to Choose Medicare: The Four Parts of Retirement Health Coverage and When to Enroll

Families approaching 65 usually ask the same questions: what Medicare actually covers, what they need to buy separately, and when they have to sign up. Below we go through the four parts one by one, using 2026 figures throughout.

What Medicare is

Medicare is the federal health insurance program for people 65 and older, people who have received disability benefits for a qualifying period, and people with end-stage renal disease. It pays for most medical costs, but you still bear deductibles, coinsurance, and most dental, eyeglasses, and long-term care.

The four parts of Medicare

Part A (hospital insurance)

Part A covers inpatient hospital stays, short-term care in a skilled nursing facility after discharge, hospice, and some home health care. If you or your spouse paid Medicare taxes for 40 quarters (about 10 years), Part A is premium-free. Those without enough quarters can buy it for $311 or $565 a month in 2026, although green card holders generally must have lived in the U.S. continuously for 5 years to do so. Premium-free does not mean a hospital stay is free: in 2026 the inpatient deductible is $1,736 per “benefit period” (which runs from admission until you have gone 60 days in a row without inpatient care).

Part B (medical insurance)

Part B covers doctor visits, outpatient care, preventive services such as annual wellness visits and vaccines, and medical equipment such as wheelchairs. In 2026 the standard monthly premium is $202.90 and the annual deductible is $283; after that, you generally pay 20% for most services.

Higher-income enrollees also pay IRMAA, an income-related surcharge added to the premium. The 2026 premium is based on your 2024 tax return: the surcharge starts above $109,000 for single filers and $218,000 for joint filers, and the top bracket pays $689.90 a month. That means the year you sell a house, do a Roth conversion, or take a large withdrawal around retirement shows up in your premium two years later.

Part C (Medicare Advantage)

Medicare Advantage plans are run by Medicare-approved private insurers and replace Original Medicare (Part A plus Part B administered directly by the government). Most include Part D, and some add dental or vision benefits, but you usually have to use the plan’s network, and coverage is limited outside your service area.

The other route is Original Medicare plus Medigap. Medigap is supplemental insurance sold by private companies that fills in deductibles and the 20% coinsurance, and you can see any doctor who accepts Medicare. You cannot use the two together. The 6 months after you turn 65 and enroll in Part B is your Medigap open enrollment period, when insurers cannot deny you or charge more because of your health; after that, most states allow insurers to underwrite.

Part D (prescription drug coverage)

Part D helps pay for prescription drugs. It is offered by private insurers, either as a standalone plan or inside a Medicare Advantage plan. Each plan has its own drug list, so check your medications against it. The old “donut hole” (a stage where your share of drug costs jumped after spending a certain amount) was eliminated in 2025. In 2026, plan deductibles are capped at $615, and once your out-of-pocket spending reaches $2,100, you pay nothing for covered drugs for the rest of the year.

How to choose a Medicare plan

• Start with your needs: List your health conditions, regular medications, preferred doctors, and medical budget, then compare plans against them.
• Compare plans: Use Medicare’s Plan Finder with your drug list and ZIP code to compare premiums, deductibles, and networks.
• Know the deadlines: Your Initial Enrollment Period (IEP) runs 7 months, from 3 months before to 3 months after the month you turn 65. If you miss it, you have to wait for the General Enrollment Period (GEP), January 1 to March 31 each year; since 2023, coverage starts the month after you enroll. If you still have employer group coverage through your own or your spouse’s current job after 65, you can use a Special Enrollment Period (SEP) within 8 months after the job or coverage ends without a penalty; COBRA and retiree coverage do not count.
• Fit it into your overall plan: Medicare premiums and IRMAA interact with retirement income, withdrawal order, and tax planning, and Meta Mega Group considers them together when doing retirement planning.

Key Medicare reminders

• Enroll on time: Penalties usually last for life. Part B goes up 10% for each full year you were late; for Part D, if you go 63 days or more without creditable drug coverage, you pay an extra 1% of the national base premium ($38.99 in 2026) for each month you were late.
• Review every year: Medicare Advantage and Part D plans change premiums, drug lists, and networks each year, and you can switch plans from October 15 to December 7.
• Watch for updates: Figures change annually; check Medicare.gov and CMS for the latest numbers.

How to decide

Start by confirming two things: whether you or your spouse have 40 quarters of work history, and whether you will still have active employer coverage at 65. If you won’t, enroll in Parts A and B during your IEP. If your regular doctors are outside a plan’s network, you spend a lot of time away from home, or you want predictable medical costs, Original Medicare plus Medigap is usually the better fit, ideally bought during the 6-month open enrollment period. If you are healthy, get care mostly locally, and care more about the monthly premium, Medicare Advantage may fit better. If you expect large income around retirement, estimate the IRMAA it will trigger two years later.

If you’d like to plan Medicare together with your retirement income and taxes, feel free to contact Meta Mega Group.