Medicare Enrollment Guide 2026: Original Medicare, Medigap, and Medicare Advantage

Most people approaching 65 know Medicare is coming — but few understand that the decision you make at initial enrollment has permanent consequences. Choosing Original Medicare vs. Medicare Advantage shapes your costs, your provider access, and — critically — your future flexibility. This guide covers the enrollment windows, the 2026 costs, the late-enrollment penalties that trip people up, and the Medigap vs. Medicare Advantage tradeoff that advisors spend the most time on.

How Medicare is structured: 4 parts

Medicare has four main components. Understanding which does what is the foundation of every enrollment decision:

Parts A and B together are called "Original Medicare." You can supplement Original Medicare with a Medigap policy (to cover gaps in A+B) plus a standalone Part D drug plan — or you can replace the whole thing with a Medicare Advantage plan.

2026 Medicare Part A costs

Part A covers hospital inpatient care. Most people don't pay a monthly premium for Part A because they (or their spouse) worked at least 40 quarters (10 years) while paying Medicare taxes.¹

Even with no premium, Part A has cost-sharing when you use it:

• Hospital deductible: $1,736 per benefit period in 2026 (not per year — per admission).¹ A second hospitalization in the same year that begins a new benefit period triggers a second deductible.
• Skilled nursing facility coinsurance: Days 1–20 are covered in full; days 21–100 cost $217.00/day in 2026; after day 100, Medicare pays nothing.
• Hospital coinsurance: Days 61–90 cost $434/day; lifetime reserve days cost $868/day.

2026 Medicare Part B costs

Part B covers outpatient care and physician services. Unlike Part A, everyone pays a Part B premium — and the standard amount can be increased by income (IRMAA).

• Standard Part B premium: $202.90/month in 2026 (up from $185.00 in 2025).¹
• Part B deductible: $283/year in 2026 (you pay this before 80/20 cost-sharing begins).
• Coinsurance: After the deductible, Part B covers 80% of approved charges. You pay 20% — with no out-of-pocket cap. A $200,000 surgery leaves you with $40,000 in Part B exposure.

If your income exceeds certain thresholds, you'll pay an IRMAA surcharge on top of the standard premium. In 2026, IRMAA begins at $109,000 MAGI for single filers ($218,000 for married filing jointly). See our IRMAA calculator for exact brackets and planning strategies.

Enrollment periods: when you must sign up

Initial Enrollment Period (IEP)

When you turn 65, you have a 7-month Initial Enrollment Period to sign up for Medicare Parts A and B:

• 3 months before the month you turn 65
• The month you turn 65
• 3 months after the month you turn 65

If you enroll in the 3 months before your birthday month, coverage starts the first day of your birthday month. If you enroll in your birthday month or after, coverage is delayed 1–3 months. Enrolling in month 4 or 5 of your IEP causes the longest delay — plan ahead.

If you're already collecting Social Security before 65, you are enrolled in Parts A and B automatically and don't need to do anything.

Special Enrollment Period (SEP) — for those still working at 65

If you (or your spouse) are still working at 65 and covered by an employer group health plan, you can delay Part B without penalty and sign up during a Special Enrollment Period after employment or coverage ends:

• You have 8 months from the date coverage ends to enroll in Part B without penalty.
• COBRA and marketplace coverage do not qualify as employer coverage for SEP purposes — once your employer group plan ends, your 8-month window starts, and COBRA is not a replacement.
• For Part D, you need creditable drug coverage (employer plan, TRICARE, VA, etc.) to avoid the Part D late-enrollment penalty. Ask your HR department whether your employer plan is "creditable" each year.

General Enrollment Period (GEP) — the penalty window

If you miss your IEP and don't qualify for an SEP, you can enroll during the General Enrollment Period (January 1–March 31 each year), with coverage starting July 1. But you'll pay the late-enrollment penalty permanently.

Late enrollment penalties

Part B penalty: 10% per year, forever

For every 12-month period you were eligible for Part B but didn't enroll, your monthly premium increases by 10% — permanently. If you delayed 3 years without a valid SEP, your 2026 standard premium isn't $202.90 — it's $202.90 × 1.30 = $263.77/month, and it stays inflated for life.²

Part D penalty: 1% per uncovered month, forever

The Part D penalty is calculated as 1% of the national base beneficiary premium ($38.99/month in 2026) × the number of full months you went without creditable drug coverage.² Example: 18 months without drug coverage → 18 × 1% × $38.99 = $7.02/month penalty, added to your drug plan premium indefinitely (it adjusts each year with the base premium). Not enormous in isolation, but easily avoidable.

What Original Medicare doesn't cover — and why that matters

Before choosing how to supplement Medicare, understand the gaps in Original Medicare (Parts A+B):

• Part B 20% coinsurance — unlimited, no cap
• Part A hospital deductible ($1,736/benefit period)
• Skilled nursing coinsurance after day 20 ($217/day in 2026)
• Most dental, vision, and hearing care
• Prescription drugs (covered by Part D separately)
• Care received outside the U.S.

A Medicare beneficiary with no supplemental coverage has essentially no catastrophic protection. Two serious hospitalizations in a year, with outpatient treatment, could easily generate $50,000+ in unreimbursed costs.

The core choice: Original Medicare + Medigap vs. Medicare Advantage

This is the most consequential healthcare decision a retiree makes. Both approaches fill the gaps in Original Medicare, but they do it very differently.

Original Medicare + Medigap in depth

How Medigap works

Medigap (also called Medicare Supplement Insurance) is a standardized private insurance policy that wraps around Original Medicare. The federal government defines 10 plan types (A, B, D, G, K, L, M, N — plus high-deductible versions of F and G). All plans of the same letter offer identical benefits regardless of which insurer sells them; the difference is in price, financial strength, and customer service.

Plan G — the most popular choice for new enrollees

Plan G is the most comprehensive Medigap plan available to new enrollees (Plan F, which also covers the Part B deductible, is only available to those who turned 65 before January 1, 2020).³ Plan G covers:

• Part A hospital deductible ($1,736 in 2026)
• Part A coinsurance and hospital costs up to an additional 365 days after Medicare coverage ends
• Part B coinsurance (the 20% — unlimited)
• Part B excess charges (if a provider doesn't accept Medicare assignment)
• Skilled nursing facility coinsurance (days 21–100)
• Foreign travel emergency (up to plan limits)

With Plan G, your only out-of-pocket exposure is the $283 Part B deductible. Everything else is covered. Premiums typically range from $150–$300/month depending on age, state, and insurer.

Plan N — the budget alternative

Plan N covers the same major gaps as Plan G but requires copayments of up to $20 for office visits and up to $50 for emergency room visits (that don't result in admission). Plan N premiums run roughly 15–25% lower than Plan G for the same insurer. It does not cover Part B excess charges — if you use a doctor who doesn't accept Medicare assignment (rare, but exists), you pay up to 15% above the Medicare-approved amount out of pocket.

The guaranteed issue window — don't miss it

During your 6-month Medigap Open Enrollment Period (OEP) — which begins the month you're 65 AND enrolled in Part B — insurers must accept your application regardless of health conditions, and cannot charge more based on pre-existing conditions.³ This is a one-time federal right. After your OEP closes, most states allow insurers to underwrite — meaning they can charge more or deny coverage based on your health history.

A few states (New York, Connecticut, Massachusetts, and a handful of others) have year-round guaranteed issue. But in the majority of states, missing the 6-month OEP means your future insurability in Medigap is not guaranteed.

Medicare Advantage in depth

Medicare Advantage (Part C) plans are offered by private insurers and approved by CMS. They bundle Parts A, B, and usually D into a single plan, often with dental, vision, and hearing coverage added. Most plans charge $0–$80/month in plan premium (on top of the $202.90/month Part B premium you continue to pay regardless).

How Medicare Advantage covers gaps

Rather than paying the 20% Medicare coinsurance directly, you pay plan-specific copayments and coinsurance up to an annual maximum. In 2026, CMS caps the maximum out-of-pocket for in-network services at $9,250; individual plans often set lower caps.⁴ In a healthy year when you have few medical needs, Medicare Advantage can cost less than Original Medicare + Medigap. In a year with serious illness or surgery, you may pay more.

The network and prior authorization reality

Medicare Advantage plans have provider networks. HMO plans require referrals and generally only cover out-of-network care in emergencies. PPO plans allow out-of-network care but at higher cost-sharing. If your primary care physician, specialists, or preferred hospital are not in the plan's network, you'll pay significantly more — or need to switch providers. Networks change annually; providers can be dropped between plan years.

Prior authorization — insurer approval before receiving a covered service — is substantially more common in Medicare Advantage than in Original Medicare. CMS audits have repeatedly found MA plans denying care that should be covered.⁵ For routine care, this is manageable. For complex or urgent conditions, delays caused by prior authorization can be consequential.

Extra benefits: valuable or not?

Many Medicare Advantage plans offer dental, vision, hearing, gym memberships, and over-the-counter allowances. These are genuine benefits for healthy enrollees who use them. The tradeoff is that these extras are funded by the plan's total budget — the same budget that determines how the plan manages prior authorization and network adequacy. Plans that offer extensive extras may be more restrictive on medical services in ways that aren't visible when you're shopping.

Why switching from Medicare Advantage back to Medigap can be difficult

This is the scenario that catches retirees most off guard. A 65-year-old chooses Medicare Advantage for the $0 premium and dental benefits. At 72, they're diagnosed with a serious condition requiring specialized care at an academic medical center that's out of network, or requiring procedures their plan is slow to authorize. They want to switch to Original Medicare + Medigap.

In most states, if they're past their 6-month Medigap OEP, they have to apply for Medigap with full medical underwriting. With a serious condition in their medical history, they may be declined or face a premium surcharge — permanently.

There are limited exceptions (certain qualifying life events, some state continuity rules, the "trial right" for new MA enrollees). But the general rule: the guaranteed-issue window closes at 65 in most states, and it doesn't reopen.

Medicare and income: IRMAA planning

If your MAGI (modified adjusted gross income) was above $109,000 as a single filer (or $218,000 MFJ) in 2024, you'll pay an IRMAA surcharge on both Part B and Part D in 2026. The surcharge is determined by a two-year lookback — your 2026 Medicare premiums are based on your 2024 tax return.

For retirees doing Roth conversions, taking large capital gains, or with significant RMDs, IRMAA is a real planning variable. A $20,000 Roth conversion that pushes you over the first IRMAA tier can cost $1,736/year per person in extra Medicare premiums — more than offsetting the conversion benefit in some scenarios.

Use the Medicare IRMAA calculator to see your specific 2026 surcharge and strategies to reduce your tier.

Early retirement and the healthcare bridge

If you retire before 65, you need coverage for the gap years. Options include:

• ACA marketplace plan: If your income is between 100% and 400% of the federal poverty level (and even above 400% through current subsidy rules), marketplace plans may be substantially subsidized. A key variable: the income you use in the Roth conversion window affects your subsidy. Converting large amounts to Roth in a year with low income can increase your taxable income and reduce or eliminate ACA subsidies — a tradeoff that deserves careful modeling.
• COBRA: Extends your employer coverage for up to 18 months at your own expense (you pay 102% of the full group premium). Usually expensive but maintains continuity if you had good employer coverage and are transitioning.
• Spouse's employer plan: If your spouse is still working with employer coverage, joining that plan is typically the most cost-effective bridge.

During your bridge years, keep track of whether your drug coverage is creditable. ACA marketplace plans typically include prescription coverage that qualifies. If you're relying on coverage that isn't creditable, you may accumulate Part D late-enrollment months without realizing it.

How a retirement specialist can help

The Medicare enrollment decision is one of 8–10 interconnected decisions a retirement-income specialist typically addresses together: Social Security claiming, Roth conversion strategy, RMD optimization, IRMAA management, withdrawal ordering, and now — healthcare coverage. These aren't independent choices. The Roth conversion amount affects IRMAA, which affects Medicare premiums, which affects cash flow, which affects withdrawal rate.

A fee-only advisor who specializes in retirement income planning will model these as a coordinated system rather than individual decisions. If you're approaching 65 and haven't mapped out how Medicare fits your overall income plan, that's a useful starting point for an advisory conversation.