Key Takeaways

• Many Medicare questions go unspoken because they seem too basic, but they are often the ones that lead to costly mistakes.

• Understanding enrollment periods, penalties, coverage limitations, and cost-sharing responsibilities is crucial to avoiding financial and healthcare surprises.

What Happens If You Miss the Initial Enrollment Period?

Missing your Initial Enrollment Period (IEP) can cost you more than just time. Your IEP is a 7-month window: it starts three months before the month you turn 65, includes your birth month, and ends three months after.

If you miss it, you may need to wait until the General Enrollment Period (January 1 to March 31) to sign up for Medicare Part A and/or Part B, with coverage beginning July 1. This delay may result in late enrollment penalties:

• Part B Penalty: An additional 10% for every 12-month period you were eligible but didn’t enroll.

• Part D Penalty: Calculated based on how long you were without creditable prescription drug coverage.

These penalties are not one-time charges; they are added to your monthly premium permanently.

Do You Really Need Medicare Part B if You Have Employer Coverage?

This depends on the size of your employer and whether the coverage is considered creditable. If you (or your spouse) are actively working and have health coverage through an employer with 20 or more employees, you can delay Part B without penalty. However, once you stop working, you must enroll during a Special Enrollment Period (SEP), which lasts 8 months from when your employment or coverage ends.

If the employer has fewer than 20 employees, Medicare usually becomes primary, and delaying Part B could result in lack of proper coverage and penalties.

Is Medicare Free?

This is a common question, and the answer is: not entirely.

• Part A is usually premium-free if you or your spouse worked and paid Medicare taxes for at least 10 years (40 quarters).

• Part B has a standard monthly premium that increases with income.

• Part D also requires a premium and may include deductibles, copayments, and coinsurance.

• Part C (Medicare Advantage) and Medicare Supplement (Medigap) plans have separate costs, but since these are private plans, we won’t discuss their pricing here.

In addition, there are out-of-pocket costs like deductibles and coinsurance, which vary based on the service you receive and whether it is covered by Original Medicare.

Can You Enroll in Medicare and Keep Working?

Yes, many people work past age 65. In fact, delaying retirement has become more common. If you continue working, your Medicare enrollment options depend on your employer’s size and coverage:

• For large employers (20+ employees), you can delay Part B and avoid the premium.

• For small employers (fewer than 20 employees), Medicare becomes your primary insurance. Not enrolling in Part B in this case may result in denied claims and penalties.

When you stop working, you have 8 months to enroll in Part B under the SEP.

What Does Medicare Actually Cover?

Understanding what Medicare covers will help you avoid unexpected costs. Here is what Original Medicare includes:

• Part A covers inpatient hospital stays, skilled nursing facility care (limited), hospice care, and some home health services.

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

However, it does not cover:

• Most dental care

• Eye exams related to prescription glasses

• Hearing aids

• Routine foot care

• Long-term custodial care

These gaps often surprise enrollees and are a major reason why people seek additional coverage.

How Do You Get Prescription Drug Coverage?

Prescription drug coverage is not included in Original Medicare. You must enroll in a Part D plan or choose a Medicare Advantage plan that includes drug coverage.

Enrollment in Part D is optional, but if you go without creditable drug coverage for more than 63 days after your IEP, you may face a lifetime penalty added to your monthly premium.

What Are the Out-of-Pocket Costs?

Out-of-pocket costs in 2025 include deductibles, coinsurance, and copayments:

• Part A deductible: $1,676 per benefit period

• Part A coinsurance:

  • $0 for first 60 days of inpatient care

  • $419 per day for days 61-90

  • $838 per day for lifetime reserve days

• Part B premium: $185 monthly

• Part B deductible: $257 annually

• Part B coinsurance: 20% of approved costs after deductible

There is no annual out-of-pocket maximum under Original Medicare unless you add a Medigap policy or enroll in a Medicare Advantage plan.

Can You Have Medicare and Employer Insurance Together?

Yes, you can have both, but how they work together depends on the size of your employer:

• If the employer has 20 or more employees, your employer insurance is primary.

• If the employer has fewer than 20 employees, Medicare is primary.

It is important to know who pays first to avoid coverage issues. Coordination of benefits rules determine who pays what.

Can You Change Your Medicare Coverage Each Year?

Absolutely. Medicare provides multiple opportunities each year to review and change your coverage:

• Open Enrollment Period (October 15 to December 7): Change between Original Medicare and Medicare Advantage or switch Part D plans. Changes take effect January 1.

• Medicare Advantage Open Enrollment (January 1 to March 31): If enrolled in Medicare Advantage, you can switch to another Advantage plan or return to Original Medicare.

Changes made during these periods are crucial for keeping your coverage aligned with your current health needs.

How Does Income Affect Medicare Costs?

Higher-income beneficiaries pay more for Parts B and D due to the Income-Related Monthly Adjustment Amount (IRMAA). For 2025, IRMAA applies if your 2023 income is:

• Above $106,000 for individuals

• Above $212,000 for joint filers

Your premiums increase in tiers depending on your modified adjusted gross income (MAGI). This is reevaluated each year based on tax returns.

What Happens if You Travel or Move?

• Domestic travel: Original Medicare is accepted anywhere in the U.S. where providers accept Medicare.

• International travel: Original Medicare does not cover care outside the U.S., except in very limited cases. Some Medigap plans offer limited foreign travel coverage.

• Moving within the U.S.: You may qualify for a Special Enrollment Period if you move out of your Medicare Advantage or Part D plan’s service area.

How Does Medicare Coordinate With Other Benefits?

If you have Veterans Affairs (VA) benefits, TRICARE, or retiree insurance, each will have different coordination rules:

• VA benefits and Medicare do not coordinate; you must use VA facilities for VA-covered care.

• TRICARE requires Medicare Part B to remain eligible.

• Retiree insurance may require Part B enrollment and act as secondary payer.

Coordination is essential to avoid denied claims or duplicate coverage.

What If You Need Long-Term Care?

This is one of the most misunderstood areas. Medicare does not pay for long-term custodial care. It only covers short-term skilled care after hospitalization.

If you require extended care for help with activities of daily living (ADLs), you will need to pay out of pocket or rely on Medicaid, which requires meeting strict income and asset limits.

Should You Get Extra Coverage?

Since Original Medicare does not cap out-of-pocket costs, many people consider either:

• A Medigap (Medicare Supplement) plan, which helps pay for deductibles, coinsurance, and copayments.

• A Medicare Advantage (Part C) plan, which offers an all-in-one alternative to Original Medicare, sometimes including extra benefits.

While you can’t have both, each has pros and cons. Your choice depends on your health, travel needs, and budget. Compare carefully during Open Enrollment.

What If You Need Help Paying for Medicare?

There are several programs in place for people with limited income and resources:

• Medicare Savings Programs (MSPs): Help with Part A and B premiums, deductibles, and coinsurance.

• Extra Help: Reduces prescription drug costs under Part D.

• Medicaid: If eligible, it can wrap around Medicare and cover long-term care and other expenses.

Apply through your state Medicaid office or Social Security.

How Do You Know If You’re Making the Right Choice?

The truth is, Medicare decisions are complex. Your best option in 2025 might not be the same next year. Health needs change. Budgets shift. Policies evolve.

Use available resources like:

• Annual Notice of Change (ANOC) letters

• Medicare Plan Finder

• Customer service lines

• Local SHIP (State Health Insurance Assistance Program) counselors

Or, get personal guidance from a licensed agent listed on this website.

Preparing for Medicare Shouldn’t Be a Guessing Game

Too many people go through Medicare enrollment blindly, only to regret it later. You deserve to understand the implications of every decision you make. Whether it’s understanding penalties, weighing your coverage options, or asking the questions you thought were too obvious, you’re not alone.

Get clear, personalized guidance that helps you take full control of your Medicare journey. Speak to a licensed agent listed on this website who can walk you through your options and make sure you feel confident in your next step.