Medicare is one of the few money decisions with a penalty that never goes away. Sign up for Part B 3 years late and the premium is 30% higher for life. At 2026 rates that's about $730 a year, every year.
Most of the rules fit on one page. Here they are.
Medicare in one minute
- What it is: federal health insurance, run by CMS (the Centers for Medicare & Medicaid Services).
- Who gets it: people 65 and older who are U.S. citizens or have been legal permanent residents for at least 5 years. Some people qualify younger: after 24 months of Social Security disability benefits, or right away with end-stage kidney disease or ALS.
- Who pays for it: workers and employers each pay 1.45% of wages in Medicare tax, plus premiums from people on Medicare and general federal funds. About 10 years of Medicare-taxed work (40 quarters), mine or a spouse's, makes Part A premium-free.
- When it starts: the first day of the 65th birthday month for most people, if they sign up in time.
- How to sign up: through Social Security, online at ssa.gov. Anyone already collecting Social Security at 65 is enrolled in Parts A and B automatically.
- The two main paths: Original Medicare (Parts A and B, usually with a Part D drug plan and often a Medigap plan), or Medicare Advantage, a private plan that bundles everything.
What each part covers
- Part A: hospital stays, skilled nursing after a hospital stay, and hospice. Usually no premium. 2026 deductible: $1,736 per benefit period.
- Part B: doctors, outpatient care and preventive services. 2026: $202.90 a month and a $283 annual deductible.
- Part D: prescription drugs, through private plans. Cost varies by plan.
- Medicare Advantage (Part C): private plans that bundle A, B and usually D. Cost varies by plan.
- Medigap: private coverage that fills Original Medicare's gaps. Cost varies by plan.
Higher earners pay more for Part B and Part D. For 2026 the surcharge starts above $109,000 of income for a single filer and $218,000 for a joint return, based on the tax return from 2 years earlier. A big Roth conversion or a home sale at 63 can raise the premium at 65.
CMS usually announces the next year's premiums in November. When the 2027 numbers come out, this page gets updated.
The sign-up windows
- Initial Enrollment Period: 7 months around the 65th birthday. It starts 3 months before the birthday month and ends 3 months after.
- Still working at 65: coverage from a current job at a company with 20 or more employees (mine or a spouse's) generally lets Part B wait without a penalty. When that job or coverage ends, an 8-month Special Enrollment Period opens.
- COBRA and retiree coverage don't count. Neither one extends the window. Someone on COBRA at 65 should sign up for Medicare on time.
- Missed it? The General Enrollment Period runs January 1 to March 31 each year, and the penalty still applies.
- Already on Medicare: open enrollment runs October 15 to December 7. That's the window to switch between Original Medicare and Medicare Advantage, or change a Part D plan, for the next year.
The penalties that last for life
- Part B: 10% added to the premium for each full 12 months of delay. At $202.90 a month, a 3-year delay adds about $61 a month.
- Part D: 1% of a base premium for each month without drug coverage that counts as creditable after first becoming eligible.
Both last as long as the coverage does. That's why I'd put the 65th birthday on the calendar, mine or a parent's, at least 3 months ahead.
The HSA catch
Once Medicare starts, HSA contributions have to stop. Part A can be backdated up to 6 months when someone signs up after 65, so Medicare.gov says to stop HSA contributions 6 months before applying for Medicare or Social Security. Money already in the HSA can still be spent on medical costs, including Medicare premiums.
What Medicare doesn't cover
Original Medicare doesn't pay for long-term custodial care, most dental, routine vision exams or hearing aids. Those need their own plan, and long-term care is the expensive one.