Medicare Explained (2026)
Parts A, B, C, D, Medigap — and which combination makes sense.
About 66 million Americans are on Medicare (CMS 2025), with 3–4 million joining each year as the Boomer generation continues aging in. The system looks complex because it is — four parts that can be combined in two very different ways (Original + Medigap + Part D, or Medicare Advantage). Below we explain each piece and walk through the Advantage vs. Original decision that almost every enrollee needs to make.
The 4 parts of Medicare
- Part A — Hospital
- Inpatient hospital stays, skilled nursing, hospice, some home health. Premium-free for most (based on work history). Deductible $1,632 per benefit period (2026 est.).
- Part B — Medical
- Doctor visits, outpatient services, preventive care, medical equipment. Premium $180/mo (2026 est.), higher for high-income. Deductible ~$247/yr. Then 20% coinsurance with no annual out-of-pocket cap (which is why Medigap exists).
- Part C — Medicare Advantage
- All-in-one private plan combining A, B and usually D. Often $0 premium on top of Part B. Extras like dental, vision, hearing. Network restrictions (HMO, PPO) and prior authorization. Annual out-of-pocket max applies.
- Part D — Prescription Drugs
- Separate private plan ($35/mo average). Deductible up to $590. Coverage gap ("donut hole") reduced; out-of-pocket capped at $2,000/yr starting 2025 under the Inflation Reduction Act.
- Medigap (Medicare Supplement)
- Private insurance that fills Original Medicare gaps. Standardized by plan letter. Plan G most popular. Premium $100–$300/mo. No network; any Medicare-accepting provider. Purchase during Medigap Open Enrollment to avoid underwriting.
Two paths: Advantage vs. Original + Medigap
| Medicare Advantage (Part C) | Original + Medigap + Part D | |
|---|---|---|
| Premium (on top of Part B) | Often $0 | $135–$335/mo |
| Doctor network | Limited (HMO/PPO) | Any Medicare provider |
| Referrals required? | Usually yes (HMO) | No |
| Out-of-pocket max | Yes (~$8,850/yr max) | With Medigap: usually $0 for Part A/B |
| Dental/vision/hearing | Often included | Not included |
| Travel out of area | Limited | Full (anywhere US) |
| Best for | Healthy seniors, homebodies, low/moderate spend | Chronic conditions, frequent specialists, travel, want stability |
Enrollment windows
- Initial Enrollment Period: 7 months around your 65th birthday (3 before + birthday month + 3 after).
- Annual Open Enrollment: October 15 – December 7. Switch Advantage plans, switch to/from Original, change Part D.
- Medicare Advantage Open Enrollment: January 1 – March 31. Switch Advantage plans or return to Original.
- Medigap Open Enrollment: 6 months from Part B enrollment. After this, insurers can medically underwrite.
- Special Enrollment Period: 8 months after losing employer coverage at or after 65.
Medicare questions
Medicare is federal health insurance for people 65 and older, some younger people with disabilities, and people with End-Stage Renal Disease. It has four parts: Part A (hospital), Part B (medical), Part C (Medicare Advantage — all-in-one alternative), and Part D (prescription drugs). Most Americans automatically qualify at age 65 based on work history.
Your Initial Enrollment Period is 7 months: 3 months before your 65th birthday month, your birthday month, and 3 months after. If you're still working and have employer coverage, you can delay Part B without penalty. If you miss your enrollment window and don't qualify for a Special Enrollment Period, you may pay a lifelong 10% late-enrollment penalty on Part B premiums.
Part A: usually $0 premium if you've worked 10+ years in the US. Part B: $174.70/month for most enrollees in 2025 (2026 TBD, typically ~3% higher — expected around $180/month), deductible $240/yr. Part D: ~$35/month average, deductible up to $590. Medicare Advantage (Part C): often $0 premium above Part B but includes Part D and may have out-of-pocket maximums. Medigap (supplement): $100–$300/month depending on plan letter and state.
Medicare Advantage (Part C) bundles Parts A, B and usually D into one private plan, often with $0 premium above Part B, plus extras like dental and vision. Downsides: network restrictions (HMO/PPO), requires referrals, prior authorization for services. Original Medicare + Medigap + Part D: no network restrictions, see any doctor accepting Medicare, predictable costs — but costs more upfront ($100–$300/mo Medigap + $35 Part D). Best for people with chronic conditions, frequent specialist visits, or who travel.
Medigap (Medicare Supplement) is private insurance that fills gaps in Original Medicare (Parts A & B). Plans are standardized by letter (A, B, C, D, F, G, K, L, M, N). Plan G is the most popular for new enrollees (Plan F is being phased out for new enrollees). Medigap has no network — any US doctor who accepts Medicare accepts your Medigap. Must be purchased during your Medigap Open Enrollment Period (6 months starting the month you turn 65 and enroll in Part B) to avoid medical underwriting.
Part A: inpatient hospital, skilled nursing facility, hospice, some home health. Part B: doctor visits, outpatient services, preventive care, durable medical equipment, some home health. Part D: prescription drugs. What's NOT covered: routine dental, routine vision, hearing aids, long-term nursing home care (over 100 days), most cosmetic, acupuncture (with limited exceptions). Medicare Advantage may cover some of these extras.
Officially closed in 2020, but you still see a coverage gap. For 2026, after you and your plan spend $5,030 on covered drugs, you enter the coverage gap and pay 25% of costs. After out-of-pocket of $8,000 you exit to catastrophic coverage with minimal copays. The Inflation Reduction Act is capping out-of-pocket at $2,000/year starting 2025 — a major win for high-drug-cost seniors.
Yes. If you have employer health coverage and are still working at 65, you can delay Part B without penalty as long as your employer has 20+ employees. When you retire or lose coverage, you have 8 months to enroll in Part B (Special Enrollment Period). If your employer has under 20 employees, you should usually enroll in Part A and B at 65 because the employer plan becomes secondary.
October 15 – December 7 each year. You can switch Medicare Advantage plans, switch between Advantage and Original Medicare, add/drop/switch Part D plans. Changes take effect January 1. Medicare Advantage Open Enrollment (January 1 – March 31) allows additional changes but is more limited.
Medicare does not cover long-term custodial care in a nursing home (beyond the first 100 days of skilled nursing after hospitalization). You'll need Medicaid (if you spend down to qualifying asset levels, roughly $2,000 for single person), long-term care insurance (expensive and declining in popularity), self-pay, or a combination. Plan early — long-term care insurance must be purchased while healthy.