Key Takeaways

• Medicare planning should begin well before you turn 65. While age opens the door to eligibility, preparation determines how effectively Medicare works for you.

• Understanding enrollment periods, cost responsibilities, and plan coordination can prevent coverage gaps and penalties.

Why Medicare Is More Than Just a Birthday Milestone

Turning 65 is often seen as a key milestone for Medicare, but eligibility alone doesn’t guarantee smooth access to healthcare. Planning is what truly determines how well your coverage works when you need it. Medicare isn’t automatic for everyone, and the choices you make in your initial enrollment window affect your costs and coverage for years.

Whether you’re still working, already retired, or somewhere in between, knowing how and when to act matters just as much as knowing what Medicare offers.

When to Start Thinking About Medicare

The right time to begin planning isn’t when you receive a government notice—it’s several months (or even years) before turning 65. Medicare offers multiple enrollment windows, and missing the right one can mean lifetime penalties or temporary gaps in care.

Initial Enrollment Period (IEP)

Your Initial Enrollment Period lasts for 7 months:

• Starts 3 months before the month you turn 65

• Includes your birthday month

• Ends 3 months after your birthday month

If you enroll early in that window, your coverage begins the month you turn 65. Waiting until later in the window can delay your coverage.

General Enrollment Period (GEP)

If you miss your IEP and don’t qualify for a Special Enrollment Period, the General Enrollment Period runs from January 1 to March 31 each year. Coverage begins July 1, and you may face late enrollment penalties.

Special Enrollment Periods (SEP)

You may qualify for a SEP if you’re covered by employer insurance and retire after 65. You have 8 months after losing coverage to sign up without penalty.

What Original Medicare Covers (and Doesn’t)

Understanding what Medicare covers—and what it doesn’t—is central to your planning.

Part A: Hospital Insurance

• Inpatient hospital stays

• Skilled nursing facility care (short-term)

• Hospice care

• Limited home health care

Costs in 2025:

• Most people pay no premium if they paid Medicare taxes for at least 10 years

• $1,676 deductible per benefit period

• Coinsurance after 60 days in a hospital or 20 days in a skilled nursing facility

Part B: Medical Insurance

• Doctor visits

• Outpatient care

• Preventive services

• Durable medical equipment

Costs in 2025:

• Monthly premium: $185

• Annual deductible: $257

• You pay 20% coinsurance after meeting the deductible

Services Not Covered by Parts A and B

• Prescription drugs

• Routine dental, vision, and hearing exams

• Long-term custodial care

• Most overseas medical care

You may need additional coverage to handle these expenses.

Why Coordination Matters: Medicare and Other Coverage

If you have other insurance—like through an employer, union, or retirement plan—you need to understand how it works with Medicare.

• If you’re working for a large employer (20+ employees), your group plan usually pays first, and Medicare acts as secondary coverage.

• If the employer has fewer than 20 employees, Medicare typically pays first.

Knowing which plan is primary affects when and how you enroll. If Medicare should be primary and you delay enrollment, you may end up with unpaid claims and late penalties.

Costs to Plan For Beyond Premiums

Medicare may be more affordable than private insurance in many cases, but it isn’t free. Even with basic coverage, you need to budget for:

• Deductibles: Amounts you pay before coverage kicks in

• Coinsurance: Your share (usually 20%) of the cost for services

• Copayments: Fixed fees for visits or prescriptions

• Out-of-pocket maximums: Traditional Medicare doesn’t have one, though some additional plans do

You can limit exposure to high costs by planning for supplemental coverage.

Your Choices for Filling the Gaps

If you only enroll in Parts A and B, you’re likely to face unexpected costs. That’s why many people choose to add additional coverage:

Medicare Supplement Insurance (Medigap)

• Helps cover out-of-pocket costs like coinsurance, copayments, and deductibles

• Standardized plans, but premiums and availability vary by state

• Must be enrolled in both Part A and Part B

Enrollment in Medigap is best during your Medigap Open Enrollment Period, which starts the month you’re 65 and enrolled in Part B. After this 6-month window, you might be subject to medical underwriting.

Medicare Part D: Prescription Drug Coverage

• Covers prescription medications

• Standalone plans for those with Original Medicare

• Late enrollment penalty applies if you go without coverage for 63+ days after eligibility

In 2025, Part D includes a $2,000 cap on out-of-pocket costs for prescription drugs, a major improvement over past years.

Medicare Advantage Plans (Part C)

• All-in-one alternative to Original Medicare, offered by private companies

• Includes Parts A and B, usually Part D, and often other benefits

• Costs and provider networks vary

You must enroll during a valid enrollment period, such as your IEP or the Annual Enrollment Period (October 15 to December 7).

How Medicare Planning Changes if You Work Past 65

Many people continue working beyond 65 and may want to delay full Medicare enrollment. But it’s not as simple as “just wait.”

If you have creditable coverage through your job (meaning it’s as good as Medicare), you may delay Parts B and D without penalty. You’ll still want to:

• Enroll in Part A (if it’s premium-free)

• Get proof of creditable coverage for when you retire

• Know your Special Enrollment Period lasts only 8 months after coverage ends

Failing to plan this correctly can result in coverage gaps or lifelong penalties.

Planning for High-Income Surcharges

If your income is above certain thresholds, you’ll pay more for Parts B and D. This is called the Income-Related Monthly Adjustment Amount (IRMAA). In 2025, thresholds begin at $106,000 for individuals and $212,000 for couples.

Planning strategies include:

• Managing retirement withdrawals to stay under IRMAA thresholds

• Timing Social Security or capital gains strategically

• Considering Roth conversions earlier in retirement

What to Do Each Year

Planning isn’t something you do once and forget. Medicare decisions evolve with your health, finances, and the program itself.

Review Plans Annually

Every fall, Medicare Open Enrollment (October 15 to December 7) lets you:

• Switch between Original Medicare and Medicare Advantage

• Change Part D plans

• Add or drop coverage

Even if you’re happy with your plan, review the Annual Notice of Change to see if:

• Premiums or copays are increasing

• Drugs are being removed from the formulary

• Providers are leaving the network

Stay Informed About Legislative Changes

Medicare isn’t static. Every year brings changes in premiums, deductibles, and covered services. In 2025, we’ve seen:

• A capped $2,000 out-of-pocket drug cost under Part D

• Higher Part B premium and deductible compared to 2024

• Adjustments to IRMAA brackets

Understanding these shifts allows you to adapt your financial and healthcare strategy.

Avoiding the Most Common Medicare Pitfalls

Poor planning can lead to irreversible mistakes. Common ones include:

• Missing enrollment deadlines

• Assuming Medicare covers long-term care

• Failing to get Part D and incurring penalties

• Overlooking out-of-pocket costs

• Not comparing plan options during open enrollment

Education is your best defense. If you feel uncertain, getting help is not just wise—it can be essential.

Planning Is the Real Medicare Advantage

Medicare is more than a government program for people over 65. It’s a framework you build around your personal needs, financial capacity, and future risks. While eligibility begins at age 65, preparation is what shapes your outcome.

The best time to plan was yesterday. The second-best time is now.

If you need help understanding your options, timelines, or how to avoid penalties, talk to a licensed agent listed on this website for professional guidance tailored to your situation.