Part A is free for most people who worked at least 10 years. Part B costs $185/month in 2026 for most enrollees. Part D and Medicare Advantage premiums vary by plan.

Medicare 101: Parts A, B, C, D Explained Simply for 2026

Q: When can I sign up for Medicare?

You can first enroll during your Initial Enrollment Period, a 7-month window that starts three months before you turn 65 and ends three months after. If you miss it and do not have qualifying employer coverage, you may face permanent late enrollment penalties.

Q: What does Medicare not cover?

Original Medicare (Parts A and B) does not cover dental, vision, hearing, or most long-term care. You need separate coverage for those, either through a Medigap plan, Medicare Advantage, or standalone dental/vision insurance.

Q: What is the difference between Medicare Advantage and Medigap?

Medicare Advantage replaces Original Medicare and is provided by private insurers. Medigap supplements Original Medicare by covering cost-sharing gaps like the 20% coinsurance. Medigap has no network restrictions but usually has higher premiums than Advantage plans.

Q: Is there a cap on prescription drug costs under Medicare in 2026?

Yes. Starting in 2025, the Inflation Reduction Act capped out-of-pocket prescription drug costs at $2,000 per year under Medicare Part D. This cap remains in place for 2026.

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Medicare Has Four Parts and They All Do Different Things

Medicare can seem confusing because it is broken into parts. Each part covers different medical costs. This guide explains Parts A, B, C, and D in simple terms so you know exactly what you are signing up for.

Rates and figures as of May 2026.

Part A: Hospital Insurance

Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care.

Cost: Most people get Part A for free. If you or your spouse worked and paid Medicare taxes for at least 10 years (40 quarters), you do not pay a monthly premium. If you worked fewer than 40 quarters, you pay up to $505 per month in 2026.

Part A has a deductible of $1,632 per benefit period in 2026. This is not an annual deductible. It applies each time you start a new benefit period.

Part B: Medical Insurance

Part B covers doctor visits, outpatient care, preventive services, medical equipment, and some home health care.

Cost: The standard Part B premium in 2026 is $185.00 per month. Higher-income enrollees pay more through Income-Related Monthly Adjustment Amounts (IRMAA). Part B also has a $240 annual deductible, after which Medicare pays 80% of approved costs and you pay the remaining 20%.

Most people should enroll in Part B when they first become eligible. Delaying can result in a permanent premium penalty of 10% for each 12-month period you were eligible but did not enroll.

Part C: Medicare Advantage

Part C, called Medicare Advantage, is an alternative to Original Medicare. Instead of getting coverage directly from the government, you get it through a private insurance company that contracts with Medicare.

Medicare Advantage plans typically bundle Part A, Part B, and usually Part D (drug coverage) together. Many plans also offer extras like dental, vision, and hearing coverage that Original Medicare does not cover.

Costs vary widely by plan and location. Some plans have $0 premiums, but you still pay the Part B premium.

Part D: Prescription Drug Coverage

Part D covers prescription medications. You buy it as a standalone plan to pair with Original Medicare, or it is bundled into a Medicare Advantage plan.

Premiums vary by plan, but the national base premium for 2026 is around $36 per month. Plans have formularies, which are lists of covered drugs. Check that your prescriptions are on the formulary before you enroll.

Starting in 2025, out-of-pocket drug costs are capped at $2,000 per year under the Inflation Reduction Act. This cap remains in effect for 2026.

Medigap vs Medicare Advantage: The Big Choice

If you stick with Original Medicare (Parts A and B), you can add a Medigap (Medicare Supplement) policy to cover the gaps, mainly the 20% coinsurance under Part B and the Part A deductible.

Medigap: Higher monthly premium, but very predictable costs. You can see any doctor who accepts Medicare. No network restrictions.
Medicare Advantage: Often lower monthly premium or $0 premium. May include dental and vision. But you are limited to a network of doctors and may need referrals.

There is no universally better option. It depends on your health needs, budget, and where you live.

When to Enroll

Your Initial Enrollment Period is a 7-month window around your 65th birthday: three months before, the month of, and three months after. Missing this window can mean higher premiums and delayed coverage. If you are still working and have employer coverage, different rules apply.

Medicare planning fits into a bigger retirement picture. Make sure your savings are on track by checking the retirement savings benchmarks by age. A Roth IRA can provide tax-free income in retirement that does not affect your Medicare premiums. You should also have a solid emergency fund for unexpected medical costs not covered by Medicare.

Frequently Asked Questions

When can I sign up for Medicare?

Your Initial Enrollment Period is a 7-month window around your 65th birthday. Missing it without qualifying employer coverage can result in permanent late penalties.

Is Medicare free?

Part A is free for most who worked at least 10 years. Part B costs $185/month in 2026. Part D and Medicare Advantage vary by plan.

What does Medicare not cover?

Original Medicare does not cover dental, vision, hearing, or most long-term care. You need separate coverage for those services.

What is the difference between Medicare Advantage and Medigap?

Medicare Advantage replaces Original Medicare through private insurers, often with networks. Medigap supplements Original Medicare by covering cost gaps and has no network restrictions.

Is there a cap on prescription drug costs under Medicare in 2026?

Yes. Out-of-pocket drug costs are capped at $2,000 per year under Part D, thanks to the Inflation Reduction Act.