Medicare, explained one part at a time.
Medicare isn't one plan — it's four parts and one supplement, each covering something different. Here's what each one actually pays for, what it costs in 2026, and when you can enroll.
The four parts of Medicare
Parts A and B make up "Original Medicare," run directly by the federal government. Parts C and D are delivered through private insurance companies that Medicare approves and regulates.
Part A
Covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care. Most people pay no premium because they (or a spouse) paid Medicare payroll taxes for 10+ years.
- Premium$0 for ~99% of enrollees
- If you buy inup to $565/mo
- Inpatient deductible$1,736 / benefit period
- Days 61–90 coinsurance$434 / day
Part B
Covers doctor visits, outpatient care, preventive services, durable medical equipment, and some home health care. Almost everyone pays a monthly premium for this one.
- Standard premium$202.90 / mo
- Higher-income premiumup to $689.90 / mo
- Annual deductible$283
- After deductibleyou pay 20% coinsurance
Part C
An all-in-one alternative to Original Medicare, sold by private insurers. Bundles Part A and B — usually Part D too — and often adds dental, vision, hearing, or OTC benefits.
- Premiumvaries by plan, many at $0
- You still oweyour Part B premium
- Network rulesHMO / PPO, plan-specific
- Annual out-of-pocket maxrequired on every plan
Part D
Covers prescription medications through private plans. Every plan must meet a minimum standard set by Medicare, but premiums, formularies, and pharmacy networks vary.
- Average premium≈ $34.50 / mo
- Max annual deductible$615
- Out-of-pocket cap$2,100 / year
- Insulincapped at $35 / month
Medigap: filling in what Original Medicare leaves behind
Medicare Supplement Insurance is sold by private companies to help pay the deductibles, copays, and coinsurance that Original Medicare doesn't cover.
How it actually works
Medigap only pairs with Original Medicare (Parts A & B) — it cannot be used alongside a Medicare Advantage plan. You keep paying your Part B premium, plus a separate Medigap premium, and the policy picks up some or all of what's left over.
Plans are standardized and labeled by letter (A, B, D, G, K, L, M, N — Plan F is closed to most new enrollees). Every insurer's "Plan G," for example, covers the exact same benefits — only the price differs.
- Best time to buyThe 6-month Medigap Open Enrollment Period starting the month you're 65+ and enrolled in Part B — insurers can't deny you or charge more for health conditions during this window.
- What it doesn't coverPrescription drugs (you'd still need a separate Part D plan) and anything Original Medicare doesn't cover in the first place.
- Miss the window?Insurers can medically underwrite you afterward in most states — meaning they can charge more or deny coverage based on health history.
When you can enroll or make changes
Missing a window can mean waiting months to make a change — or a permanent late-enrollment penalty. These are the windows that come up most.
Initial Enrollment Period (IEP)
Starts 3 months before the month you turn 65, includes your birthday month, and runs 3 months after. Your first chance to sign up for Parts A and B.
Annual Enrollment Period (AEP)
Switch between Original Medicare and Medicare Advantage, change Advantage plans, or change your Part D plan. Changes take effect January 1.
MA Open Enrollment Period
If you're already in a Medicare Advantage plan, switch to a different Advantage plan or drop back to Original Medicare — once.
General Enrollment Period (GEP)
Missed your IEP and don't qualify for a Special Enrollment Period? Sign up for Part A and/or B here; coverage starts the next month.
Special Enrollment Period (SEP)
Losing employer coverage, moving, gaining or losing Medicaid/Extra Help, and other qualifying events can open a new enrollment window.
Medigap Open Enrollment
Your one guaranteed-issue window to buy any Medigap policy sold in your state, regardless of health history.
2026 costs at a glance
Costs are set annually by CMS. These are the standard 2026 figures — actual amounts can vary by income (Part B/D) and by plan (Part C/D).
| Part | Premium | Deductible / Cap |
|---|---|---|
| Part A — Hospital | $0 for most · up to $565/mo if buying in | $1,736 / benefit period |
| Part B — Medical | $202.90/mo standard · up to $689.90/mo (IRMAA) | $283 / year |
| Part D — Drugs | ≈ $34.50/mo average · varies by plan | $615 deductible max · $2,100 OOP cap |
| Part C — Advantage | Varies by plan · many at $0 (plus Part B premium) | Set by each plan |
What's changing for 2027
CMS finalized the Contract Year 2027 Medicare Advantage & Part D rule on April 2, 2026 — the biggest annual update to Star Ratings, Part D, and marketing rules since the Inflation Reduction Act. Here's what's locked in, what's still a projection, and what actually changes for people on Medicare.
Locked in for 2027 — Part D
- Standard deductible (max)$700
- Out-of-pocket cap$2,400
- National base premium$41.33
- Coverage gap ("donut hole")eliminated for good
Still pending — Parts A & B
- Part B standard premium≈ $209–$221 / mo
- Part B annual deductible≈ $292–$310
- Part A inpatient deductible≈ $1,788
Star Ratings get simpler
CMS is removing 11 quality measures that gave shoppers little useful signal, adding a new depression-screening measure, and dropping a proposed "Health Equity Index" in favor of the existing reward factor. Expect average Star Ratings to trend higher in 2027.
- Measures removed11
- New measure addedDepression screening & follow-up
- Health Equity Indexnot implemented
Part D redesign made permanent
The $0 cost-sharing in catastrophic coverage and the end of the coverage gap — first rolled out under the Inflation Reduction Act — are now written directly into Medicare regulation for 2027 and beyond, not just annual guidance.
- Coverage gappermanently eliminated
- Catastrophic phase$0 cost-sharing
- OOP capindexed annually
Tighter rules on extra benefits
Plans offering chronic-illness supplemental benefits (SSBCI) must now publicly post their eligibility criteria, and any benefit delivered on a debit card requires real-time verification and expires with the plan year. Cannabis products remain barred everywhere, even where state-legal.
- SSBCI eligibility rulesmust be public
- Debit-card benefitsreal-time verification
- Cannabis productsnever allowed
Fewer limits on agent contact
CMS rolled back several 2023-era marketing restrictions, easing limits on when and how licensed agents can follow up with beneficiaries, and dropping the requirement for plans to send mid-year reminders about unused extra benefits.
- Agent contact restrictionseased
- Mid-year "unused benefit" noticesno longer required
- EffectiveOctober 1, 2026
Medicaid, Extra Help, and Special Needs Plans
A whole layer of programs sits underneath Medicare for people with limited income, a qualifying chronic condition, or a long-term care need. Getting the category right changes what a client is eligible for, what they'll actually pay, and what an agent is allowed to say.
Dual eligibility & Medicaid
"Dual eligible" means a person has both Medicare and Medicaid. It comes in two very different flavors, and mixing them up is one of the most common agent mistakes.
Full-Benefit Dual Eligible (FBDE)
Has full Medicaid — doctor visits, long-term care, and more — on top of Medicare. Medicaid benefits and rules vary by state.
Partial dual (MSP-only)
Qualifies for a Medicare Savings Program only. Medicaid pays some Medicare premiums and cost-sharing but provides no additional Medicaid benefits.
Medicare Savings Programs (MSP)
State-run programs that pay some or all of a person's Medicare costs. Enrollment in any of the first three automatically qualifies someone for Extra Help too — no separate application needed.
| Program | Roughly covers | Income band (federal baseline) | Worth knowing |
|---|---|---|---|
| QMB Qualified Medicare Beneficiary |
Part A & B premiums, plus all Medicare deductibles, coinsurance, and copays | ≈ 100% FPL and below | Most comprehensive MSP. Providers cannot bill a QMB member for Medicare cost-sharing — that's a federal violation. |
| SLMB Specified Low-Income Medicare Beneficiary |
Part B premium only | ≈ 100–120% FPL | No cost-sharing help beyond the premium. |
| QI Qualifying Individual |
Part B premium only | ≈ 120–135% FPL | Limited annual funding, first-come first-served — must reapply every year. |
| QDWI Qualified Disabled & Working Individual |
Part A premium only | ≈ 200% FPL | For people under 65 who lost premium-free Part A by returning to work. |
Extra Help (Part D Low-Income Subsidy)
A federal subsidy, administered by Social Security, that pays down what a person owes for Part D — premium, deductible, and the copay at the pharmacy counter.
Extra Help / LIS
Anyone with full Medicaid, an MSP, or SSI is auto-enrolled — no separate application. Everyone else applies through Social Security.
- Income limit$23,940/yr single · $32,460/yr couple
- Resource limit$18,090 single · $36,100 couple
- Resource limit includes$1,500/person burial allowance
- Part D deductible$0 for most LIS categories
| LIS category | Deductible | Generic | Brand |
|---|---|---|---|
| Institutionalized / qualifying HCBS full-benefit dual | $0 | $0 | $0 |
| Full-benefit dual, income ≤100% FPL | $0 | $1.60 | $4.90 |
| Full-benefit dual, income >100–150% FPL | $0 | $5.10 | $12.65 |
| QMB-only / SLMB-only / QI / SSI-only / other LIS | $0 | $5.10 | $12.65 |
Special Needs Plans: D-SNP, C-SNP, I-SNP
SNPs are Medicare Advantage plans restricted to people who meet a specific eligibility profile. Confirming that profile — not assuming it — is the job before ever discussing benefits.
D-SNP
Restricted to people who qualify for both Medicare and Medicaid. Coordinates benefits across both programs and often layers in extra benefits.
- Coordination-only — coordinates with Medicaid but doesn't require the same insurer for both.
- HIDE SNP — Highly Integrated Dual Eligible: the same parent company runs both the Medicaid plan and the D-SNP.
- FIDE SNP — Fully Integrated Dual Eligible: one plan, one entity, for both Medicare and Medicaid benefits.
C-SNP
Restricted to people with a specific CMS-approved chronic condition — diabetes, heart failure, ESRD, chronic lung disorders, and others.
- Verification required — a qualifying condition must be confirmed through the carrier's approved process, not an informal conversation.
- Time-limited — most carriers require verification within a set window after enrollment or eligibility lapses.
- Never diagnose — an agent doesn't determine or promise eligibility based on symptoms described on a call.
I-SNP
Restricted to people who live in — or require the level of care of — a long-term care facility for 90 days or more.
- Institutional-equivalent — a related version covers people in the community who need that same level of care.
- Verify first — facility residency or level-of-care documentation is required before enrollment.
VA, TRICARE & other coverage
Plenty of people carry coverage besides Medicare. Knowing how each one actually interacts changes what's safe to recommend — and what an agent must never tell someone to cancel.
VA health benefits
VA care and Medicare are separate systems — the VA doesn't bill Medicare, and Medicare doesn't pay for care received at a VA facility.
Most veterans are still encouraged to enroll in Part B when first eligible. Skipping it to rely on the VA alone can mean a lifetime late-enrollment penalty if they change their mind later, and a VA facility isn't always the closest option in an emergency.
Never advise someone to cancel or delay Part B because they have VA coverage — that decision belongs to the beneficiary, with full information.
TRICARE For Life (TFL)
Medicare-wraparound coverage for military retirees — it behaves like a Medigap plan, paying much of what Medicare doesn't.
Requires the person to keep both Medicare Part A and Part B active. Dropping Part B risks losing TFL entirely.
Employer, union & retiree coverage
Whether Medicare pays first or second depends on employer size and active-employment status — governed by Medicare Secondary Payer rules, not a simple preference.
Never advise someone to drop employer coverage without understanding those coordination rules first; a wrong move can create a gap in coverage or a penalty.
Medicaid
Can be full-benefit or premium-only (MSP) — see the Medicaid section above. That distinction changes plan eligibility, D-SNP access, and cost-sharing rules.
Glossary: terms every agent should know cold
The shorthand you'll hear on every call, training, and compliance document — defined once, in plain language.
- AEP Annual Enrollment Period
- October 15 – December 7. Switch MA plans, PDP plans, or move between Original Medicare and Medicare Advantage. Changes take effect January 1.
- IEP Initial Enrollment Period
- The 7-month window around a person's 65th birthday when they first sign up for Parts A and B.
- MA OEP MA Open Enrollment Period
- January 1 – March 31. Lets someone already in a Medicare Advantage plan switch plans or return to Original Medicare — once.
- GEP General Enrollment Period
- January 1 – March 31. For people who missed their IEP and have no Special Enrollment Period; coverage starts the next month.
- SEP Special Enrollment Period
- An enrollment window opened by a qualifying life event — losing employer coverage, moving, gaining or losing Medicaid/Extra Help, and others.
- Medigap OEP Medigap Open Enrollment
- The 6-month guaranteed-issue window starting the month someone is 65+ and enrolled in Part B — no medical underwriting allowed.
- TPMO Third-Party Marketing Organization
- Any organization — including agencies and agents — that markets Medicare plans on a carrier's behalf. Subject to specific disclosure and recording rules.
- SOA Scope of Appointment
- The documented agreement on which product categories a beneficiary wants to discuss, required before a personal marketing appointment.
- PTC Permission to Contact
- Documented proof a beneficiary agreed to be contacted — required before any outbound marketing call.
- PECL Pre-Enrollment Checklist
- The CMS-required checklist reviewed with a beneficiary before completing enrollment in an MA or Part D plan.
- MOOP Maximum Out-of-Pocket
- The most a person pays out-of-pocket in a plan year before the plan covers 100% of covered services. Required on every MA plan.
- IRMAA Income-Related Monthly Adjustment Amount
- A surcharge added to Part B and Part D premiums for higher-income beneficiaries, based on tax return data from two years prior.
- Formulary Drug list
- The list of drugs a plan covers, organized into cost tiers. Varies by plan even within the same carrier.
- Star Ratings CMS quality score
- CMS's 1–5 star rating of MA and Part D plan quality and performance — also determines a plan's bonus payments.
- Benefit Period Part A measurement
- How Part A hospital/SNF coverage is measured — starts on inpatient admission, ends after 60 consecutive days with no inpatient care.
- Creditable Coverage Drug coverage standard
- Drug coverage that's at least as good as standard Part D. Having it avoids the Part D late-enrollment penalty when someone eventually enrolls.
- Guaranteed Issue No medical underwriting
- A right to buy a policy — usually Medigap — without health questions or a higher price for pre-existing conditions.
- Dual Eligible Medicare + Medicaid
- Anyone enrolled in both Medicare and Medicaid, whether full-benefit or through an MSP only.
- FBDE Full-Benefit Dual Eligible
- A dual-eligible person who receives full Medicaid benefits, not just help with Medicare premiums or cost-sharing.
- QMB / SLMB / QI / QDWI Medicare Savings Programs
- The four state-run programs that pay some or all of a person's Medicare premiums and cost-sharing. See the Medicaid & SNPs section for details.
- LIS / Extra Help Part D subsidy
- The federal subsidy that reduces or eliminates Part D premiums, deductibles, and copays for people with limited income and resources.
- D-SNP / C-SNP / I-SNP Special Needs Plans
- MA plans restricted to dual-eligible beneficiaries, people with a qualifying chronic condition, or long-term facility residents, respectively.
- FIDE / HIDE SNP D-SNP integration levels
- How tightly a D-SNP's Medicare and Medicaid benefits are integrated — FIDE is fully integrated under one entity; HIDE shares a parent company across both.
- MSP ⚠ two meanings
- Watch for context: "Medicare Savings Program" (state help paying Medicare costs) and "Medicare Secondary Payer" (the rules for who pays first when other coverage exists) share the same acronym.
- AOR Agent of Record
- The licensed agent officially attached to a beneficiary's policy for servicing and commission purposes.
- MAPD MA Prescription Drug plan
- A Medicare Advantage plan that bundles Part C and Part D coverage together.
- PDP Prescription Drug Plan
- A standalone Part D plan, paired with Original Medicare rather than bundled into an MA plan.
- Ready-to-Sell (RTS) Carrier certification status
- The status confirming an agent is currently certified and authorized to sell a specific carrier's plans — required before every sale.
- AHIP Annual agent certification
- America's Health Insurance Plans' standard annual training and testing that most carriers require before certifying an agent for the plan year.
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Official Medicare resources
Every figure on this page is publicly available from the federal government. Here's where to verify anything, or get help directly.
CMS.gov
The Centers for Medicare & Medicaid Services — the federal agency that runs Medicare and sets these rules and costs.
cms.gov ↗Medicare.gov
The official consumer site — compare plans, check coverage, and enroll.
medicare.gov ↗1-800-MEDICARE
1-800-633-4227 — free help by phone, 24 hours a day, seven days a week.
Call now ↗SHIP
State Health Insurance Assistance Program — free, unbiased, one-on-one counseling in your state.
shiphelp.org ↗Agent platform & CRM
Where quoting, e-App enrollment, and client records actually live day to day — separate from the consumer resources above.
IntegrityCONNECT
The all-in-one agent platform — integrated quote & e-App across health and life carriers, Sunfire-powered MA/PDP comparisons and enrollment, client records, task tracking, and single sign-on. This is not a consumer or Medicare.gov resource — agent login required.
Open IntegrityCONNECT ↗