MEDICARE BASICS 2026

IMPORTANT : 

Medicare enrollment depends on your eligibility, but everyone gets a 7-month Initial Enrollment Period (IEP) surrounding their 65th birthday. This window starts three months before your birth month and ends three months after. During this time, you can sign up for Original Medicare (Parts A and B).

Original Medicare: Medicare generally pays 80% of approved costs of covered services, and you pay the other 20%. Some services, like flu shots, may cost you nothing.

Original Medicare (therefore a Medicare Supplement policy) does not cover regular eye, dental, or hearing exams. It does cover diseases of the mouth and of the eyes. Some Medicare Advantage plans include eye, dental, and hearing coverage

Part A: Hospital Coverage – When a person has worked and paid taxes for 40 quarters during their life, they may be entitled to premium-free Medicare Part A. Medicare Part A is part of the federal health insurance program for adults aged 65 and over as well as younger adults with qualifying disabilities.

Part B: Medical Coverage –  Most people pay a monthly premium for Medicare Part B. The standard premium is $202.90 for 2026. Higher-income earners may pay more due to IRMAA (Income-Related Monthly Adjustment Amount).If you qualify for state-based help due to a lower income, you may be able to pay less than this amount. There is an annual Part B deductible of $283 for 2026 which applies to certain covered services.

Since 20% of Medicare-approved charges are out-of-pocket costs with no maximum limit, people opt to enroll in supplemental insurance. There are two options:

Medicare Supplement (Medigap) with a separate Prescription Drug Plan

Medicare Advantage with prescription drug coverage

Medicare Supplement policies cover the remaining 20% of Medicare-approved charges once the Part B deductible is met. This includes your part of coinsurance and copayments. Medicare Supplement policies are accepted by any doctor in the U.S. who bills Original Medicare. Monthly premium amounts vary by plan and carrier. The most comprehensive policy is Plan G. Prescription drug coverage is not included in Medicare Supplement policies; this coverage is sold separately.

Prescription Drug Plans (Part D) are used to help cover the cost of prescription medications. There are 5 tier levels that every covered medication will fall under. You may also have an annual deductible of $615 depending on your plan and medication. Some medications are not covered by any plan. Since coverage varies by carrier and pharmacy (standard vs preferred), we look at your specific medications to help determine which plan will work best. Part D plans may undergo changes throughout the year; therefore, many people choose to review their plan every year during the Annual Enrollment Period (AEP).

In 2026, Medicare Part D catastrophic coverage begins after a beneficiary's out-of-pocket costs for prescription drugs reach $2,100. Once this cap is met, the plan pays 100% for the rest of the year, and the individual pays nothing for covered Part D drugs.

Medicare Advantage plans (Part C) are offered as HMO (Health Maintenance Organization), POS (Point of Service), or PPO (Preferred Provider Organization). These include a network of providers that, typically, you must use for care. PPO plans are the exception as they offer out-of-network coverage at a higher cost. Medicare Advantage plans include monthly premiums, deductibles, copays, and a yearly maximum out-of-pocket cost. Most plans have prescription drug coverage embedded, which means you cannot enroll in a separate Prescription Drug Plan. Costs and coverage vary by carrier; therefore, we look at your medications, providers, and facilities to help determine which plan will work best.

John Potter

425-381-2901

john@holmesharborinsurance.com