Preparing for Medicare: What You Need to Know Before You Turn 65

Article Key Takeaways: What You Need to Know About Medicare at 65

• What is Medicare and when should you enroll?
  Medicare is a federal health insurance program for people age 65+. Your Initial Enrollment Period starts 3 months before your 65th birthday and ends 3 months after—and missing it can lead to lifelong penalties.
• Why is enrolling in Medicare on time so important?
  Delaying enrollment without qualifying coverage can result in permanent premium increases and gaps in healthcare coverage.

• What does each part of Medicare cover?

  • Part A: Hospital stays, skilled nursing, hospice (usually no premium)

  • Part B: Doctor visits, outpatient care, preventive services (monthly premium + 20% coinsurance)

  • Part C (Medicare Advantage): Bundled private plans that combine A & B (often include extras like dental/vision)

  • Part D: Prescription drug coverage (varies by plan and provider)

• How much does Medicare cost in 2026?

  • Part B standard premium: $202.90/month

  • Part B deductible: $283/year

  • Part A deductible: $1,736 per benefit period

  Costs vary based on income, plan type, and coverage choices.

• Do you have to enroll in Medicare if you’re still working?
  Not always. If you have employer-sponsored coverage, you may be able to delay enrollment without penalties—but it depends on your employer size and plan details.
• What is Medicare Advantage vs. Original Medicare?
  Medicare Advantage plans are all-in-one alternatives that may lower out-of-pocket costs and add extra benefits, while Original Medicare (Parts A & B) offers more provider flexibility.
• Do you need supplemental insurance (Medigap)?
  Medigap helps cover out-of-pocket costs like deductibles and coinsurance for Original Medicare—but you can’t have both Medigap and Medicare Advantage.
• What happens if you miss your Medicare enrollment window?
  You may face late enrollment penalties, delayed coverage, and higher lifetime costs—especially for Parts B and D.
• How can you reduce healthcare costs in retirement?
  Planning ahead, enrolling on time, and choosing the right combination of Medicare coverage can help you control long-term healthcare expenses.

Full Article

Most people spend decades saving, investing and planning for retirement. But one of the biggest financial decisions of your retirement years has little to do with your portfolio. Rather, it has to do with a government program, an important birthday and a deadline you really don't want to miss.

That program is Medicare, and you have a short window around your 65th birthday to sign up. Doing so will help you take full advantage of all that Medicare has to offer and give you more flexibility as you navigate healthcare spending in retirement.

Here we’ll explain what you need to know about your Medicare benefits and how to prepare.

Signing Up for Medicare

Medicare was created in 1965 to ensure seniors have access to affordable healthcare in retirement. While it isn't free, you've likely already paid for a big chunk of it through decades of payroll taxes—a compelling reason to start taking advantage of your benefits as soon as you're eligible.

The enrollment window opens three months before the month of your 65th birthday and closes three months after. If you don’t enroll during your Initial Enrollment Period, you could face coverage delays and higher monthly premiums for the rest of your life. These penalties are designed to discourage people from waiting until they get sick to buy coverage. You can enroll and choose plans on the Social Security website.

Note that seniors who continue to receive private health insurance through an employer might be exempt from Medicare enrollment obligations and penalties. It depends on the company’s size and plan details.

Let’s take a closer look at each part of Medicare, and what you need to consider.

Part A: Hospital Coverage

Part A covers inpatient hospital stays, skilled nursing facility care, hospice services and some home healthcare. For most people, there’s no monthly premium. That’s because Part A is what you funded through payroll deductions, assuming you or your spouse contributed for at least 10 years. But you will be responsible for deductibles: $1,736 in 2026 for the first 60 days of a hospital stay, with substantial copayments beyond that.

Assuming you have paid into Medicare through your lifetime earnings, there’s no financial penalty for delaying Part A enrollment—but also no reason not to enroll.

Part B: Outpatient Coverage

Part B covers outpatient services, including emergency room and doctor visits, preventive care, lab work and medical equipment. In 2026, standard monthly premiums for Part B are $202.90, and they can be higher, depending on your income and filing status. There is also an annual deductible of $283, plus a 20% copay for most doctor visits.

Missing your Initial Enrollment Period will add a permanent 10% surcharge to your Part B premium for every full 12-month period delayed.

Part C: Medicare Advantage

Part C, commonly known as Medicare Advantage, refers to optional plans offered by private insurers that combine Parts A and B and sometimes Part D. Part C plans offer lower out-of-pocket costs and have fixed copays for office visits (instead of 20% for Part B), with smaller or no annual deductibles. By law, they must include a maximum annual out-of-pocket cost, which varies depending on whether you see doctors in or outside the plan’s network. The plans may also include benefits like dental, vision and hearing.

When you sign up for Part C, you’ll still need to pay your Part B premium. While you might need to pay an additional premium on top of that, some Medicare Advantage plans charge no additional premium.

Part D: Prescription Drug Coverage

Part D covers prescription drugs, with plans offered through private insurance companies. In 2026, the average monthly Part D premium is $34.50, but it varies based on the plan details and where you live. You may also pay an annual deductible (in 2026, up to $615) and co-insurance on each prescription, which can vary depending on the drug’s “tier” or pricing scale. Note that most Medicare Advantage plans also include Part D coverage.

You won’t have to pay for Part D if you have creditable drug coverage already (from a current employer, for instance) or qualify for extra help. Otherwise, you are required to have Part D, and delaying enrollment will add a permanent 1% surcharge to your premium for every month delayed.

Medigap: The Final Piece of the Puzzle

Medigap policies are supplemental private policies that help pay out-of-pocket costs for Parts A and B. They charge higher premiums, sometimes several hundred dollars more a month. However, they fill in the gaps of what isn’t covered by Parts A and B.

You can’t have both Medigap and Medicare Advantage. The Medigap enrollment period is six months beginning the first day you are 65 and have Part B coverage. Enroll in this period and you can’t be denied coverage based on preexisting conditions.

Medicare has a lot of moving parts, and we can help you unpack them. If you have any questions, reach out. After all, understanding Medicare—and when to sign up for what—is good for your health and wealth. With smart preparation, you’ll almost certainly pay less for healthcare in retirement, even as your medical needs grow.

Multnomah Group is a registered investment adviser registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice.