Who is eligible for Medicare?
Most people qualify at 65. You also qualify before 65 after 24 months of Social Security or Railroad Retirement Board disability benefits, as soon as disability benefits start if you have ALS, and at any age with end-stage renal disease, meaning permanent kidney failure treated with dialysis or a transplant, if you or a spouse or parent meet the work requirements.
Eligibility and premium-free Part A are separate questions. Part A costs nothing if you or your spouse worked about 10 years, or 40 quarters, in jobs that paid Medicare tax, as about 99% of beneficiaries have. With 30 to 39 quarters you can buy Part A for $311 a month in 2026, and with fewer than 30 it costs $565. Part B carries a premium however long you worked, though Medicaid or a Medicare Savings Program pays it for some people with limited income.
Enrollment is automatic for some people. If you start Social Security or Railroad Retirement benefits at least four months before you turn 65, you are enrolled in Parts A and B and your card arrives about three months before coverage starts. Everyone else applies through Social Security, or the Railroad Retirement Board for railroad workers, during a limited window; Medicare enrollment periods explains each window and the penalties for missing one.
The parts of Medicare and what each covers
Medicare is built from separate pieces, and you choose how to combine them.
Original Medicare is Parts A and B, run by the federal government. You can see any doctor or hospital that takes Medicare, but there is no yearly cap on your share of costs, so many people add a Part D drug plan and a Medigap supplement. Medicare Advantage, also called Part C, is the alternative: a Medicare-approved private plan that bundles Parts A and B and usually D, often with a provider network, prior approval for some services and a yearly out-of-pocket limit. You keep paying the Part B premium either way.
- Part A, hospital insurance: inpatient hospital stays, skilled nursing facility care, hospice and home health care.
- Part B, medical insurance: doctor visits, outpatient care, durable medical equipment such as walkers, and many preventive services.
- Part C, Medicare Advantage: private plans that deliver your Part A and Part B benefits, usually with drug coverage included.
- Part D, drug coverage: optional plans from private insurers, bought on their own or inside a Medicare Advantage plan.
- Medigap: private supplement policies, standardized by letter in most states, that pay some of Original Medicare’s deductibles and coinsurance.
What Medicare costs in 2026
Medicare is not free, even with premium-free Part A. In 2026 the standard Part B premium is $202.90 a month, up from $185.00 in 2025, and the Part B deductible is $283 a year. After the deductible you usually pay 20% of the Medicare-approved amount for doctor and outpatient services.
Part A has no premium for most people, but it has cost sharing. The Part A deductible is $1,736 per benefit period in 2026, which covers days 1–60 of a hospital stay. Days 61–90 cost $434 a day, and 60 lifetime reserve days cost $868 a day. In a skilled nursing facility, days 21–100 cost $217 a day. Because a new benefit period can begin within the same year, you can owe the Part A deductible more than once.
Higher earners pay more. IRMAA surcharges raise Part B and Part D premiums when modified adjusted gross income from two years earlier tops $109,000 for a single filer or $218,000 on a joint return in 2026. The biggest planning fact isn’t a premium at all: Original Medicare has no annual out-of-pocket maximum.
What Medicare doesn’t cover
Original Medicare leaves out several costs that grow with age. The largest is long-term care. Help with bathing, dressing and other daily activities, at home or in a nursing home, is custodial care, and neither Medicare nor Medigap pays for it. Medicare covers skilled nursing facility care for up to 100 days per benefit period, not an open-ended stay. That gap is what long-term care insurance, savings or Medicaid fill.
Original Medicare also excludes most dental care, eye exams for prescription glasses, hearing aids and the exams to fit them, routine physicals, cosmetic surgery, and care from doctors who have opted out of Medicare except in emergencies. Many Medicare Advantage plans add some vision, hearing and dental benefits, one reason people choose them, but the extras differ from plan to plan.
Most prescriptions you fill at a pharmacy also fall outside Parts A and B. They need a Part D plan, bought on its own or inside a Medicare Advantage plan, and going without creditable drug coverage can bring a lasting late penalty.
How Medicare fits a retirement plan
Medicare turns health insurance from an employer benefit into a line in your retirement budget, and a few timing rules shape the plan around it.
If you retire before 65, you need coverage for the gap, usually COBRA or an ACA Marketplace plan, where subsidies depend on income. Once you have Medicare Part A, you no longer qualify for Marketplace premium help.
Income choices in your early 60s echo into Medicare costs. A large Roth conversion, capital gain or retirement-account withdrawal can lift MAGI over an IRMAA tier two years later, and the tiers are cliffs: one dollar over charges the full surcharge for the year.
A health savings account can’t take contributions from the first month you are enrolled in Medicare, including months Part A covers retroactively. The balance can still pay Part B, Part D and Medicare Advantage premiums tax-free after 65, though not Medigap premiums.
Illustrative numbers
A 70-day hospital stay under Original Medicare in 2026
Part A deductible, covering days 1–60$1,736
Days 61–70 coinsurance (10 × $434)$4,340
Part B deductible$283
20% of the next $8,000 of Medicare-approved doctor charges$1,600
Total out of pocket, before premiums$7,959
With Original Medicare alone, this one illness costs $7,959 on top of the year’s premiums, and a second admission in a new benefit period would restart the Part A deductible. A Medigap policy, or a Medicare Advantage plan’s yearly out-of-pocket limit, is what caps exposure like this.
At a glance
The parts of Medicare at a glance (2026)
| Part | Covers | 2026 premium | Main cost sharing |
|---|---|---|---|
| Part A | Hospital stays, skilled nursing, hospice, home health | $0 for most people; $311 or $565 if bought | $1,736 deductible per benefit period |
| Part B | Doctors, outpatient care, equipment, preventive care | $202.90 standard, more with IRMAA | $283 deductible, then usually 20% |
| Part C (Medicare Advantage) | Private plan covering A and B, usually D | Plan premium plus the Part B premium | Plan copays, with a yearly out-of-pocket limit |
| Part D | Prescription drugs | Varies by plan | Deductible up to $615; $2,100 out-of-pocket cap |
| Medigap | Part of Original Medicare’s cost sharing | Varies by policy and location | Depends on the lettered plan |
Put it in your plan
Medicare in MoneyWhatIf
MoneyWhatIf’s Medicare setting, under Health cover, is on by default and charges each person from the plan year containing their 65th birthday: the standard Part B premium ($202.90 a month in 2026), the $38.99 Part D base premium as a placeholder, and any monthly supplement you enter for Medigap or Medicare Advantage. The total grows at plan inflation plus two points, and IRMAA is a separate row set from MAGI two years earlier. A healthcare spending category can step down at 65 so private cover isn’t counted twice. Part A deductibles and coinsurance aren’t modeled, so budget them as healthcare spending.
Common questions
Medicare FAQs
Is Medicare free at 65?
Only partly. Most people get Part A without a premium because they or a spouse paid Medicare tax for about 10 years. Part B isn’t free: the standard premium is $202.90 a month in 2026, plus a $283 deductible and usually 20% coinsurance. Drug plans and Medigap policies carry their own premiums, Medicare Advantage premiums vary by plan, and higher earners pay IRMAA surcharges.
Do I have to sign up for Medicare if I’m still working at 65?
Not always. If you or your spouse have group health coverage from current employment, you can usually delay Part B without a penalty and sign up within 8 months after the job or the coverage ends. Premium-free Part A can start at 65 either way, unless you want to keep contributing to an HSA. If the employer has fewer than 20 employees, the job-based plan may not pay for care unless you have Parts A and B, so check with the plan first.
What is the difference between Medicare and Medicaid?
Medicare is federal health insurance based mainly on age or disability, with no income test for eligibility. Medicaid is run jointly by the federal government and each state for people with limited income and resources, and it covers some care Medicare doesn’t, such as nursing facility services. People can qualify for both, and Medicaid can then help pay Medicare premiums and cost sharing.
How is Medicare paid for?
Through two trust funds held by the U.S. Treasury. The Hospital Insurance fund pays for Part A and is financed mainly by payroll taxes on workers, employers and the self-employed, plus income tax on some Social Security benefits and premiums from people who buy Part A. The Supplementary Medical Insurance fund pays for Parts B and D from enrollee premiums plus money Congress authorizes. The standard Part B premium covers about 25% of Part B’s cost; IRMAA payers cover 35% to 85%.