The four parts

Part A — Hospital insurance. Inpatient hospital stays, skilled nursing facility care after a qualifying stay, hospice and some home health care. Most people pay no premium because they or a spouse paid Medicare taxes for at least 40 quarters. CMS notes that approximately 99% of Medicare beneficiaries do not pay a Part A premium.

Part B — Medical insurance. Doctor visits, outpatient care, durable medical equipment, preventive services, lab work. Always has a premium.

Part C — Medicare Advantage. Not extra coverage. It is an alternative delivery of Parts A and B through a private insurer approved by CMS, usually with Part D drug coverage bundled and often with extras such as dental, vision and hearing.

Part D — Prescription drug coverage. Sold by private insurers, either standalone alongside Original Medicare or bundled inside a Medicare Advantage plan.

2026 costs, from CMS

CMS publishes these figures each autumn for the following calendar year. For 2026:

  • Part B standard monthly premium: $202.90, an increase of $17.90 from 2025.
  • Part B annual deductible: $283, an increase of $26 from 2025.
  • Part B income-related premiums (IRMAA): $284.10 to $689.90 per month, depending on modified adjusted gross income, generally from your tax return two years prior.
  • Part A inpatient hospital deductible: $1,736 per benefit period, an increase of $60 from 2025.
  • Part D national base beneficiary premium: $38.99 per month.
  • Part D maximum deductible: $615.
  • Part D income-related adjustment: $14.50 to $91.00 per month for higher-income beneficiaries.

Two details people miss. The Part A deductible applies per benefit period, not per year — a new benefit period begins after 60 consecutive days out of a hospital or skilled nursing facility, so two separate hospitalizations in one year can each carry the full deductible. And the Part D base beneficiary premium is a national reference figure used in calculations; the premium of any specific Part D plan is set by that plan.

Original Medicare versus Medicare Advantage

Original Medicare (Parts A and B), usually with a Medigap policy and a standalone Part D plan. You can see any provider in the country who accepts Medicare, with no networks and no referrals. Medigap covers most or all of the coinsurance and deductibles Original Medicare leaves you. The trade-off is three premiums — Part B, Medigap, Part D — and Medigap adds real monthly cost.

Medicare Advantage (Part C). Often a low or $0 additional premium beyond Part B, with drug coverage and extra benefits bundled in, and — unlike Original Medicare — an annual out-of-pocket maximum, which Original Medicare does not have. The trade-offs are provider networks, prior authorization requirements for some services, and benefits that can change every year.

The decision that is hardest to reverse concerns Medigap. During your six-month Medigap open enrollment period, which begins when you are 65 or older and enrolled in Part B, insurers must sell you any Medigap policy they offer regardless of health. Outside that window, in most states insurers can medically underwrite and decline you. That means switching from Medicare Advantage back to Original Medicare with Medigap years later may not be possible at any price. Understand that before choosing.

Enrollment windows and the penalties

Initial Enrollment Period. Seven months: the three months before the month you turn 65, that month, and the three months after.

Special Enrollment Period. If you have continued working past 65 with qualifying employer group coverage, you can generally delay Part B without penalty and enroll within eight months of that coverage or employment ending. The rules differ for employers with fewer than 20 employees, and for COBRA and retiree coverage, which do not count as active employer coverage for this purpose.

General Enrollment Period. January 1 to March 31 each year, for those who missed their windows.

Medicare Open Enrollment. October 15 to December 7 each year, to change Advantage and Part D plans for the following year.

Medicare Advantage Open Enrollment. January 1 to March 31, to switch Advantage plans or return to Original Medicare.

The penalties are permanent. The Part B late enrollment penalty adds 10% to your premium for each full 12-month period you could have had Part B and did not, for as long as you have Medicare. The Part D penalty adds 1% of the national base beneficiary premium for each month you went without creditable drug coverage, also for life.

What Medicare does not cover

Original Medicare generally does not pay for long-term custodial care, most dental care, routine vision exams and eyeglasses, hearing aids, or care outside the United States. Many Medicare Advantage plans add limited dental, vision and hearing benefits, which is a significant part of their appeal — read the actual annual maximums, which are often modest.

Long-term custodial care is the largest uncovered exposure in American retirement planning, and it is not what Medicare is for. That is the domain of long-term care insurance, Medicaid after a spend-down, or private savings.

Frequently asked questions

Not necessarily. If you have qualifying coverage through active employment at a firm with 20 or more employees, you can usually delay Part B without penalty and use a Special Enrollment Period later. Verify with your benefits administrator and with Medicare directly — COBRA and retiree coverage do not qualify for this exception.
No. Many plans charge no additional premium beyond Part B, but you continue paying the Part B premium, and you pay copays, coinsurance and deductibles under the plan. The absence of a plan premium is not the absence of cost.
No. Medigap policies only work with Original Medicare, and it is unlawful for anyone to sell you a Medigap policy while you are enrolled in a Medicare Advantage plan.
That is IRMAA, the income-related monthly adjustment amount, based on your modified adjusted gross income from your tax return two years earlier. If your income has dropped since — through retirement, for example — you can request a reconsideration from Social Security using form SSA-44.

Sources

Every figure above is drawn from the following publications. Links open on the publisher's own site.

IW

InsureWiseHub editorial team

We write plain-language explainers about U.S. insurance and cite a primary source for every number. We do not sell insurance and we are not paid by insurers. Read our editorial policy.

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