Sebastian Frey( Seasoned Professional )

Seb Frey is a REALTOR® and founder of Team Sixty Plus, a curated network connecting older adults and their families with trusted professionals across California. With decades of experience helping homeowners 60+ navigate major life transitions—like downsizing, aging in place, or passing on a legacy—Seb brings deep market knowledge, a compassionate approach, and a commitment to simplifying complex decisions. When he’s not advising clients, he’s sharing expert insights on real estate, retirement strategies, and quality-of-life resources for the 60+ community.

Key Takeaways

Medicare is individual coverage, not family coverage. Original Medicare leaves significant gaps: no dental, no vision, no hearing, no prescriptions, no long-term care. You have two main options for filling those gaps: a Medicare Supplement plan paired with a standalone Part D drug plan, or a Medicare Advantage plan that bundles everything together.

Your Initial Enrollment Period lasts seven months around your 65th birthday. In 2026, your maximum out-of-pocket for prescription drugs is $2,100. Higher-income beneficiaries pay more through IRMAA surcharges based on income from two years prior. And if anyone calls claiming to be Medicare, hang up.

You’re Turning 65…Now What?

Here’s the thing nobody tells you when you’re approaching Medicare age: the system is far more complicated than it should be. There are four parts. Two routes for supplemental coverage. A prescription drug plan that has three distinct stages. Spam callers pretending to be Medicare. And income-based surcharges that can quietly inflate your monthly costs if you’re not paying attention.

Over 62 million Americans are currently enrolled in Medicare, and that number keeps climbing as baby boomers hit 65. If you’re one of them, or approaching that milestone, this guide is your plain-English roadmap to understanding what Medicare covers, what it costs, and how to make smart decisions that protect both your health and your wallet in 2026.

First, a Warning About Those Medicare Phone Calls

Before we get into the nuts and bolts, let’s address something important: if someone calls you and says they are calling from Medicare, they are not. Medicare does not call you unsolicited. Do not give out your Medicare number, Social Security number, or any personal information to an unknown caller. This kind of fraud is rampant and can result in serious financial harm.

What Is Medicare, Exactly?

Medicare is a federal health insurance program and the largest in the United States. It covers U.S. citizens and legal residents, primarily those 65 and older, though people under 65 who have certain qualifying disabilities or serious conditions like end-stage renal disease or ALS (Lou Gehrig’s disease) can qualify earlier.

A few things Medicare is NOT:

• It is not Medicaid (called MediCal in California), which is a separate, income-based program
• It is not a Social Security benefit, though the two programs are closely linked
• It is not family coverage. This surprises a lot of couples who are used to carrying family health plans through their employer. Medicare is strictly individual. Each person has their own plan, their own premiums, and their own coverage. For some couples, this ends up costing more than their previous employer-sponsored family plan, though that varies significantly depending on individual circumstances.

The ABCs (and D) of Medicare

Medicare Part A: Hospital Coverage

Part A covers inpatient hospital care, including:

• Room and board during a hospital stay
• Intensive care services
• Skilled nursing facility care
• Operating room and surgical services
• Hospice and rehabilitation services
• Some limited home health care
• Medications administered during a hospital stay

Cost: If you or your spouse have worked and paid into Medicare taxes for at least 10 years as a U.S. citizen or legal resident, Part A has no monthly premium. You have, in effect, already prepaid for it.

That said, Part A does have cost-sharing if you use it. In 2026, there is a $1,736 deductible per benefit period (typically 60 to 90 days). If a hospital stay extends beyond 60 days, you also start paying a daily co-insurance of $444. Longer stays increase that cost further. It is a sobering reminder that Original Medicare alone is not a complete safety net.

Medicare Part B: Outpatient and Preventive Care

Part B is your everyday medical coverage. Think of it as everything that happens outside a hospital:

• Annual wellness exams and preventive care (note: this is a wellness exam, not a full annual physical in the traditional sense)
• Lab tests and diagnostic imaging
• Mental health care
• Durable medical equipment
• Ambulance services
• Physical therapy, occupational therapy, and other rehabilitation therapies

Cost in 2026: The standard monthly premium for Part B is $185.00. If you are already receiving Social Security benefits, this is automatically deducted before your payment arrives. If you are not yet taking Social Security income, you will receive a quarterly bill.

There is also a Part B deductible of $257 per year. After meeting that deductible, you are responsible for 20% of the Medicare-approved amount for most services.

IRMAA: The Income Surcharge You Need to Know About

Here is where things get interesting for higher-income beneficiaries. Medicare uses something called the Income-Related Monthly Adjustment Amount, or IRMAA, to determine your actual Part B and Part D premiums.

The Social Security Administration looks back two years at your Modified Adjusted Gross Income. For 2026, they are reviewing your 2024 tax return. If you filed as an individual and your 2024 income was under $106,000, you pay the standard $185.00 Part B premium. Filing jointly under $212,000 also qualifies for the standard rate.

Above those thresholds, your monthly premium increases on a sliding scale. The higher your income bracket, the more you pay. This applies to both Part B and Part D drug coverage. If you recently retired and your income has dropped significantly since 2024, there is a process to appeal your IRMAA determination, which a knowledgeable Medicare agent can help you navigate.

What Original Medicare Does NOT Cover

This is where a lot of people get caught off guard. Original Medicare (Parts A and B) does not include:

• Prescription drugs (these require a separate Part D plan)
• Dental care (cleanings, fillings, implants, dentures)
• Vision care (eyeglasses, contacts, routine eye exams)
• Hearing aids and related exams
• Long-term care (assisted living, custodial home care)
• Most care received outside the United States

That is a significant list of gaps. Which is exactly why most people choose to add coverage beyond Original Medicare.

The Two Routes for Additional Coverage

Once you have Original Medicare Parts A and B, you have two fundamentally different paths for filling in those gaps.

Route 1: Medicare Supplement (Medigap) Plans

Medigap plans work alongside Original Medicare. You keep your Medicare coverage and the supplement plan picks up costs that Medicare does not fully cover, specifically the Part A deductibles, co-pays, and a portion of Part B deductibles and co-pays.

There are currently eight standardized Medigap plans available to new Medicare beneficiaries, identified by letter. The two most popular are Plan G and Plan N. Plan G offers the most comprehensive coverage. Plan N is somewhat less expensive but includes some cost-sharing on office visits and emergency room trips. There are also high-deductible versions of some plans for people who want lower monthly premiums and are comfortable with more out-of-pocket risk.

Key features of Medigap coverage:

• Additional monthly cost: Premiums range from roughly $50 to $350 per month, depending on the plan, your age, and where you live, on top of your Part B premium
• No drug coverage: A Medigap plan does not include prescription drug coverage. You must add a standalone Part D plan separately
• No dental, vision, or hearing: Unless offered as a paid add-on by a specific carrier
• Nationwide coverage: Because Medigap plans follow Original Medicare, you can see any doctor or specialist in the country who accepts Medicare, with no network restrictions
• Guaranteed issue window: When you first become eligible for Medicare at 65 or when you first enroll in Part B, you have a six-month window to enroll in any Medigap plan without medical underwriting. They cannot reject you for pre-existing conditions during this window. Once that window closes, insurers can use underwriting, and in California, acceptance is not guaranteed
• Guaranteed renewable: As long as you pay your premiums, the plan cannot be canceled

Route 2: Medicare Advantage (Part C)

Medicare Advantage is the all-in-one alternative. Instead of Original Medicare plus a supplement and a drug plan, Medicare Advantage replaces your Original Medicare coverage through a private insurer that contracts with Medicare. Most plans bundle Part A, Part B, and Part D prescription drug coverage into one package.

Medicare Advantage plans often include benefits Original Medicare does not cover at all, such as dental, vision, hearing aids, fitness memberships, and over-the-counter allowances for health and wellness products. These extras have made Advantage plans very attractive, particularly to beneficiaries watching their monthly expenses.

Things to understand about Medicare Advantage:

• Geographic limitations: These plans are generally specific to a county or zip code. The network of doctors available to you depends on where you live
• Premiums: Some plans have zero additional premium beyond your Part B. Others charge $50 to $200+ per month. Premiums have been rising in many California markets in 2025 and 2026
• Copays and co-insurance: Even zero-premium plans have cost-sharing. A primary care visit might cost $5. A specialist visit might cost $15 to $45. Those amounts vary by plan
• Maximum out-of-pocket protection: This is one of the most valuable features of Medicare Advantage. Each plan has an annual cap on your out-of-pocket costs. Once you hit that ceiling, the plan pays 100% for the remainder of the year
• Network requirements: Depending on whether you choose an HMO or PPO structure, you may need referrals from your primary care physician to see specialists
• Special Needs Plans: There are Dual Special Needs Plans (D-SNPs) for people who qualify for both Medicare and Medicaid, and Chronic Special Needs Plans (C-SNPs) designed for people with specific conditions like diabetes, heart failure, or end-stage renal disease. These plans have specific eligibility requirements

Medicare Part D: Prescription Drug Coverage

Part D is where Medicare gets genuinely confusing for most people. Here is a structured breakdown for 2026.

Standalone Part D plans are required if you choose the Medigap route. If you choose Medicare Advantage, drug coverage is almost always included.

The average standalone Part D premium is around $56 per month in 2026, though costs vary widely. Some low-cost plans are available in California, while others exceed $100 to $200 per month.

The Three Stages of Part D Coverage

Part D coverage follows the calendar year, resetting every January 1st.

Stage 1: The Deductible Many plans have an annual deductible. The maximum allowed deductible in 2026 is $615. You pay the full cost of your medications until you have met this amount.

Stage 2: Initial Coverage Once you have met your deductible, you enter the initial coverage phase. You share costs with your plan based on the tier of each medication:

• Tier 1 and 2: Generic and preferred generic drugs (lowest cost)
• Tier 3: Preferred brand-name drugs
• Tier 4: Non-preferred brand-name drugs
• Tier 5: Specialty medications, often for serious conditions like cancer treatment (highest cost)

During initial coverage, you pay roughly 25% of medication costs, though your exact share depends on the tier.

Stage 3: Catastrophic Coverage The most important change to Part D in recent years: in 2026, your maximum annual out-of-pocket cost for prescriptions is capped at $2,100. That cap includes your deductible. Once you reach that amount, Medicare covers your medications in full for the rest of the calendar year. This is a major protection that did not always exist and is a significant improvement for people managing expensive or specialty prescriptions.

When to Enroll in Medicare

You become eligible for Medicare at age 65. Your Initial Enrollment Period runs for seven months: three months before the month of your 65th birthday, the month of your birthday itself, and three months after.

Still working at 65? If you have active employer-sponsored coverage through your own or your spouse’s current employer, you may delay Part B enrollment without penalty. You can typically enroll in Part A at no cost without any issues since there is no premium, and having Part A can be valuable if you have a hospital stay before fully transitioning to Medicare. When you are ready to retire and lose that employer coverage, you will have a Special Enrollment Period to sign up for Part B.

Planning tip: If retirement is on the horizon, working with a Medicare agent about two months before your intended retirement date gives you enough lead time to have coverage in place from the first day your employer benefits end. Gaps in coverage are avoidable with proper planning.

Birthday on the 1st of the month? Your Medicare eligibility actually starts the first of the preceding month, so the entire process shifts one month earlier.

How to Apply for Medicare

You apply for Medicare through Social Security, not through Medicare directly. Visit ssa.gov and look for the Medicare enrollment section. You will be asked whether you want to enroll in both Part A and Part B, or delay Part B. The process is relatively straightforward, though setting up your Social Security online account using the ID verification system can occasionally slow things down. There is now an option to verify your identity in person at a post office if you prefer not to upload documents online.

Should You Work with a Medicare Agent?

The honest answer is yes, and here is why: the wrong plan can cost you real money and access to the doctors you want to keep seeing. A local Medicare agent knows which medical groups participate in which plans in your area, which plans are shrinking their networks or raising rates, and how to match your specific medications and health needs to a plan that actually works for your life.

When you call an 800 number from a TV commercial, you are talking to someone who does not know your local market, your doctors, or the nuances of your county’s plan options.

And here is the part that surprises most people: working with a licensed Medicare agent costs you nothing. Agents are compensated directly by the insurance carriers at rates set by Medicare. That means there is no incentive to steer you toward one plan over another based on commission, because the commission rates are standardized regardless of which plan you choose.

The decisions you make during your first Medicare enrollment window, particularly around Medigap plans, have long-term implications. Getting it right from the start is worth a conversation with someone who knows the landscape.

This article is intended for general educational purposes and reflects Medicare program details as understood for the 2026 plan year. Individual plan availability, costs, and coverage details vary. Consult a licensed Medicare insurance agent for advice specific to your situation.

Sebastian Frey Seasoned Professional

Seb Frey is a REALTOR® and founder of Team Sixty Plus, a curated network connecting older adults and their families with trusted professionals across California. With decades of experience helping homeowners 60+ navigate major life transitions—like downsizing, aging in place, or passing on a legacy—Seb brings deep market knowledge, a compassionate approach, and a commitment to simplifying complex decisions. When he's not advising clients, he's sharing expert insights on real estate, retirement strategies, and quality-of-life resources for the 60+ community.

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