Your Medicare guide
Medicare 101
Everything you need to know about Medicare — explained in plain language, without the confusion.
What is Medicare?
Medicare is the federal health insurance program for Americans age 65 and older, as well as certain younger individuals with qualifying disabilities or conditions. It is not the same as Medicaid, which is income-based assistance.
Medicare is divided into parts — each covering a different category of healthcare. Understanding how the parts work together is the first step to choosing the right coverage for your situation.
The four parts of Medicare
Each part covers a different category of healthcare. Most people use a combination of parts.
Part A
Hospital Insurance
Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services.
- Most people pay $0 in premiums if they or their spouse worked and paid Medicare taxes for at least 10 years
- 2026 inpatient deductible: $1,676 per benefit period
- Covers up to 60 days in a hospital with no coinsurance after the deductible
- Days 61–90 require a daily coinsurance payment
Part B
Medical Insurance
Part B covers doctor visits, outpatient care, preventive services, lab tests, and durable medical equipment.
- Standard 2026 monthly premium: $185.00 (may be higher based on income)
- Annual deductible: $257 in 2026
- After the deductible, Medicare pays 80% — you pay the remaining 20%
- No out-of-pocket maximum — the 20% can add up significantly without a supplement
Part C
Medicare Advantage
Part C (Medicare Advantage) is an alternative to Original Medicare offered by private insurers. These plans bundle Parts A and B and often include extras like dental, vision, and hearing.
- Must still pay your Part B premium
- Plans often have $0 additional premium but come with networks and prior authorizations
- Out-of-pocket maximums vary by plan — review carefully each year
- Plans change annually — your coverage today may not be the same next year
Part D
Prescription Drug Coverage
Part D adds prescription drug coverage to Original Medicare. It is offered through private insurance companies approved by Medicare.
- Premiums, deductibles, and copays vary by plan and the drugs you take
- Enrollment is voluntary but late enrollment penalties apply if you go without creditable coverage
- The 2026 out-of-pocket cap for Part D is $2,000 — a major improvement for those on costly medications
- Review your plan every year during Annual Enrollment (Oct 15 – Dec 7)
When to enroll
Missing your enrollment window can result in permanent late penalties and coverage gaps. Here are the key periods to know.
Initial Enrollment Period (IEP)
7 monthsYour first opportunity to enroll. Begins 3 months before the month you turn 65, includes your birthday month, and extends 3 months after. This is your most important window.
Special Enrollment Period (SEP)
VariesIf you or your spouse are still working and covered by employer insurance at 65, you can delay Medicare without penalty. You have 8 months after that coverage ends to enroll.
Annual Enrollment Period (AEP)
Oct 15 – Dec 7Each fall, you can switch Medicare Advantage plans, change Part D drug plans, or move between Original Medicare and Medicare Advantage. Changes take effect January 1.
Medicare Advantage Open Enrollment
Jan 1 – Mar 31If you are already in a Medicare Advantage plan, you can switch to a different Advantage plan or return to Original Medicare once during this period.
Common Medicare mistakes to avoid
Missing your Initial Enrollment Period
Enrolling late in Part B or Part D results in permanent premium penalties — 10% per year for Part B, 1% per month for Part D. These penalties last for life.
Assuming employer coverage counts as creditable
Not all employer plans qualify as creditable coverage for Medicare purposes. Verify with your HR department before delaying enrollment.
Not reviewing your plan annually
Medicare plans change every year. Premiums, drug formularies, and provider networks can shift significantly. Review your Annual Notice of Change (ANOC) letter every fall.
Underestimating the 20% gap in Part B
Original Medicare pays 80% of covered services. Without a Medicare Supplement (Medigap) plan, the remaining 20% has no cap and can become a serious financial burden.
Choosing a plan based on premium alone
A $0 premium plan may cost far more in copays, prior authorizations, and network restrictions. Total out-of-pocket cost matters more than the monthly premium.
Frequently asked questions
Answers to the questions Pearl hears most often from people approaching Medicare.
Still have questions? Pearl can help.
With 13 years of independent Medicare experience across 9 states, Pearl can walk you through your options at no cost to you.