Medicare Basics: A Plain-English Guide for 2026
Medicare is the federal health insurance program for people 65 and older, and for some younger people with certain disabilities or health conditions. Here is a simple overview of how it works. When you’re ready to look at your own situation, we’re happy to talk it through with a licensed Medicare agent.
MAX Your Benefits Insurance Agency is an independent Medicare agency based in Huntington Beach, helping people throughout Southern California, with licensed agents in California, Arizona, Florida, and South Carolina.
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Last reviewed October 17, 2026, by licensed agents at MAX Your Benefits Insurance Agency, CA agency license #6018686.
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- The four parts of Medicare, in plain English
- 2026 costs, IRMAA, and when to sign up
- A Medigap chart, key forms, and a checklist
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What Are the Four Parts of Medicare?
Medicare in 60 Seconds
Medicare has four parts. Part A helps pay for hospital stays. Part B helps pay for doctor visits and outpatient care. Part D helps pay for prescriptions. Part C, called Medicare Advantage, is a Medicare-approved plan from a private company. It covers everything Parts A and B cover, and most plans also include Part D. Most people sign up around their 65th birthday. Signing up late can mean penalties that may last as long as you have that coverage.
Part A: Hospital Coverage
Helps cover inpatient hospital stays, limited skilled nursing facility care, hospice, and some home health care. Most people don’t pay a monthly premium for Part A.
Part B: Medical Coverage
Helps cover doctor visits, outpatient care, preventive services, lab work, and medical equipment. Most people pay a standard monthly premium for Part B.
Part C: Medicare Advantage
Another way to get your Part A and Part B benefits, through a private plan approved by Medicare. Most plans include drug coverage, and some may offer extra benefits Original Medicare doesn’t cover, like some vision, hearing, and dental services.
Part D: Prescription Drug Coverage
Helps pay for prescription drugs. It is offered by private plans, either as a stand-alone plan or built into a Medicare Advantage plan.
Who Can Get Medicare?
There are four main ways to qualify.
Age 65 or older
You are a U.S. citizen, or a lawful permanent resident who has lived in the U.S. for at least 5 years in a row.
Under 65 with a disability
You have received Social Security (or certain Railroad Retirement) disability benefits for 24 months. Medicare usually starts on its own in month 25.
Kidney failure (End-Stage Renal Disease, or ESRD)
You need regular dialysis or have had a kidney transplant, and you (or your spouse or parent) have enough Social Security work history. You must sign up. Coverage usually starts in the 4th month of dialysis, and can start sooner in some cases.
ALS (Lou Gehrig's disease)
Medicare starts the same month your Social Security disability benefits begin. There is no 24-month wait.
What Original Medicare Doesn't Cover
Knowing the gaps ahead of time helps you plan for them.
- Long-term care help with daily tasks like bathing and dressing, at home or in a nursing home
- Most dental care including cleanings, fillings, and dentures
- Routine eye exams and glasses or contact lenses
- Hearing aids and exams to fit them
- Routine foot care in most cases
- Cosmetic surgery
- Care outside the U.S. except in a few rare situations
Many Medicare Advantage plans include some dental, vision, and hearing benefits. Some Medigap plans help with emergency care when you travel abroad. Medi-Cal may help with long-term care if you qualify.
Original Medicare vs. Medicare Advantage
Original Medicare (Parts A and B) is run by the federal government and works with any provider in the U.S. that accepts Medicare. Medicare Advantage (Part C) plans come from private companies approved by Medicare, usually use a provider network, and most include drug coverage.
Original Medicare
Parts A and B, run by the federal government. Many people add a stand-alone Part D drug plan, and some add a Medicare Supplement (Medigap) policy to help with costs Original Medicare doesn’t pay, like deductibles and coinsurance. Medigap policies work only with Original Medicare, not with a Medicare Advantage plan.
Medicare Advantage
An all-in-one alternative to Original Medicare, offered by private companies approved by Medicare. You still have Medicare and generally still pay your Part B premium. Plans usually use a network of doctors and hospitals, and benefits and costs can change each year.
In the diagrams, solid boxes are included and dashed boxes are optional or vary by plan.
| Original Medicare | Medicare Advantage | |
|---|---|---|
| Who runs it | The federal government | Private companies approved by Medicare |
| Doctors | Any doctor in the U.S. who accepts Medicare | Usually a network of doctors and hospitals |
| Drug coverage | Add a stand-alone Part D plan | Most plans include it |
| Medigap | You can add a Medigap policy | Medigap does not work with these plans |
| Yearly out-of-pocket limit | No yearly limit | Every plan has one for covered Part A and Part B services |
| Part B premium | You pay it | You generally still pay it |
| Extra benefits | Routine dental, vision, and hearing care are mostly not covered. You can buy separate coverage. | Many plans include some dental, vision, and hearing benefits |
| Approval before care | Rarely needed, though a few services require it | Often needed for some services (called prior authorization) |
Each path has trade-offs. The right fit depends on your doctors, your prescriptions, your budget, and how you like to get care.
Not sure which path fits?
Bring your list of doctors and prescriptions. A licensed agent can walk you through both options.
HMO vs. PPO Medicare Advantage Plans and Special Needs Plans (SNPs)
Most Medicare Advantage plans are HMOs or PPOs. The main difference: an HMO usually requires you to use the plan's network, except in emergencies, and to get referrals to see specialists. A PPO lets you see doctors outside the network, usually for a higher cost.
- You use doctors and hospitals in the plan's network. The exceptions are emergencies, urgent care when you are outside your plan's service area, and dialysis when you are temporarily out of the area.
- You usually choose a primary care doctor
- You usually need a referral to see a specialist. Some services, like a yearly screening mammogram, don't need one.
- Costs are often lower
Some HMOs, called HMO-POS (Point of Service) plans, let you get certain services out of network for a higher cost.
- You can see doctors outside the network who accept Medicare, but you usually pay more. Check with your plan first that the service is covered.
- You usually don't need to choose a primary care doctor
- You usually don't need a referral to see a specialist
- Premiums and copays are often higher than an HMO's
How an HMO Medical Group Works
In California, many HMO plans work through a medical group. When you pick your primary care doctor, you are also picking that doctor's medical group. The medical group is the hub of your care.
It manages your network
- Works with your plan on which specialists and hospitals you can use
- Checks that its doctors meet quality standards
- Reminds you about preventive care, like screenings and vaccines
It keeps your records together
- Many medical groups use shared electronic records, so your doctors can see the same chart
- That can mean fewer repeat tests and safer prescribing
- Your records can arrive before you do, so referrals and surgeries go more smoothly
How care usually flows in an HMO
- Youthe member
- Primary care doctoryour first stop for care
- In-network specialistlike cardiology or orthopedics
- In-network hospitalfor surgery or a hospital stay
Emergencies are different: you can go to any emergency room, in or out of network.
This is how many HMOs work in California. Some plans, and many plans in other states, don't use a medical group this way, and some HMOs (often called open-access HMOs) don't require referrals to see in-network specialists. Each plan sets its own rules, so check your plan's Evidence of Coverage or ask us.
Special Needs Plans (SNPs)
These Medicare Advantage plans are built for people with certain health or coverage needs. You must qualify to join. All SNPs include Part D drug coverage, and you can stay in the plan only while you still qualify.
C-SNP: Chronic Condition Special Needs Plan
- For people with certain long-term conditions, like diabetes, chronic heart failure, or chronic lung disease
- Doctors, drug lists, and benefits are tailored to that condition
- Your doctor must confirm the condition
D-SNP: Dual Eligible Special Needs Plan
- For people who have both Medicare and Medi-Cal (Medicaid)
- Coordinates your benefits from both programs
- Medi-Cal may help pay your Medicare costs, and many plans include extra benefits
There are also Institutional Special Needs Plans (I-SNPs). They are for people who live in a nursing home or need that level of care at home.
Medicare Supplement (Medigap) Plans
Medigap plans help pay costs Original Medicare doesn't, like deductibles and coinsurance. They are sold by private insurance companies and work only with Original Medicare.
Same letter, same benefits
Plans are standardized and named by letter. Plan G from one company covers the same things as Plan G from any other. Price and service are what differ.
A protected time to buy
Your 6-month Medigap Open Enrollment Period starts the month you are 65 or older and have Part B. During it, companies can't turn you down or charge more because of your health. In some cases, a plan may wait up to 6 months to cover a health problem you had before.
Drug coverage is separate
Medigap plans sold today don't include drug coverage, so most people add a stand-alone Part D plan.
| Benefit | A | B | D | G | K | L | M | N |
|---|---|---|---|---|---|---|---|---|
| Part A coinsurance, plus 365 extra hospital days | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Part B coinsurance or copays | ✓ | ✓ | ✓ | ✓ | 50% | 75% | ✓ | ✓* |
| Blood (first 3 pints) | ✓ | ✓ | ✓ | ✓ | 50% | 75% | ✓ | ✓ |
| Hospice care coinsurance | ✓ | ✓ | ✓ | ✓ | 50% | 75% | ✓ | ✓ |
| Skilled nursing facility coinsurance | – | – | ✓ | ✓ | 50% | 75% | ✓ | ✓ |
| Part A deductible | – | ✓ | ✓ | ✓ | 50% | 75% | 50% | ✓ |
| Part B excess charges | – | – | – | ✓ | – | – | – | – |
| Emergency care outside the U.S. | – | – | 80% | 80% | – | – | 80% | 80% |
| Part B deductible | – | – | – | – | – | – | – | – |
| Yearly out-of-pocket limit | – | – | – | – | $8,000 (2026) $8,360 (2027) | $4,000 (2026) $4,180 (2027) | – | – |
covered in full 50% covered in part not covered.
*Plan N may have a copay of up to $20 for some office visits and up to $50 for an emergency room visit that doesn't lead to being admitted as an inpatient. Plans C and F also cover the Part B deductible, but they are not sold to people who first became eligible for Medicare on or after January 1, 2020. Excess charges are extra amounts some doctors may bill above Medicare's approved amount. After you reach the K or L yearly limit and pay your Part B deductible ($283 in 2026), the plan pays 100% of covered services for the rest of the calendar year.
Outside the open enrollment period, a company may be able to use medical questions to decide whether to sell you a plan. This does not apply if you have a special right called a guaranteed issue right, like when employer coverage ends. Already have a Medigap plan? California's "birthday rule" gives you 60 days each year, starting on your birthday. During that time you can switch to a plan with the same or fewer benefits, from any company, with no health questions. Ask us how it works for you.
When Can I Sign Up or Make Changes? Medicare Enrollment Periods
Most people first sign up during a 7-month window around their 65th birthday. Each year from October 15 to December 7, anyone with Medicare can switch between Original Medicare and Medicare Advantage, or change Medicare Advantage or Part D plans.
Initial Enrollment Period: 7 months around your 65th birthday
- 3 months before
- The month you turn 65
- 3 months after
Every year
Initial Enrollment Period
A 7-month window that starts 3 months before the month you turn 65, includes that month, and ends 3 months after. Signing up on time helps you avoid late enrollment penalties, unless you have other qualifying coverage, like from a current employer.
Annual Enrollment Period
Also called Medicare Open Enrollment. You can switch between Original Medicare and Medicare Advantage, change Medicare Advantage plans, or join, switch, or drop a Part D drug plan. Changes start January 1.
Medicare Advantage Open Enrollment
If you’re in a Medicare Advantage plan, you can make one change: switch to a different Medicare Advantage plan, or drop your plan, go back to Original Medicare, and join a Part D drug plan. If you’re new to Medicare Advantage, this window runs during your first 3 months of coverage.
Special Enrollment Periods
Certain life events, like moving, losing employer coverage, or qualifying for Medi-Cal (Medicaid) or Extra Help, can open a window to make changes outside the usual dates. How long you have depends on the event. It is often 2 months. To sign up for Part B, you have up to 8 months after your job or your job-based coverage ends, whichever happens first. COBRA and retiree coverage don't extend this window.
General Enrollment Period
Missed your Initial Enrollment Period and don't qualify for a Special Enrollment Period? You can sign up for Part B during this time, and Part A if you have to pay a premium for it. Most people can sign up for premium-free Part A at any time. Coverage starts the first of the month after you sign up, and a late penalty may apply.
Medigap Open Enrollment
Starts the month you are 65 or older and have Part B, and lasts 6 months. This is a protected time to buy a Medigap plan, because companies can't turn you down or charge more because of your health. In some cases, a plan may wait up to 6 months to cover a health problem you had before.
How to Avoid Late Penalties
Part B penalty
10%for each full 12 months you waited
If you don’t sign up for Part B when you’re first eligible, and you don’t have other qualifying coverage (like a current employer plan), your premium can go up 10% for each full 12 months you waited. This usually lasts as long as you have Part B.
Part D penalty
63 daysin a row without creditable drug coverage
If you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period ends, a penalty may be added to your premium for as long as you have Medicare drug coverage. Creditable means coverage Medicare counts as at least as good as a standard Part D plan. Your employer or union can tell you if yours is.
Turning 65 soon?
A licensed agent can walk you through your dates, one on one or at a group seminar.
What Does Medicare Cost in 2026?
In 2026, the standard Part B premium is $202.90 a month and the Part B deductible is $283. Here are the standard 2026 amounts set by Medicare. They change every January.
Quick terms: premium, deductible, coinsurance, copay
A premium is what you pay each month for coverage. A deductible is what you pay first, before coverage starts to pay. Coinsurance is your share of the cost as a percentage, like 20%. A copay is a set dollar amount.
Part A (Hospital)
- $0Monthly premium for most people. If you don’t qualify for premium-free Part A, it’s $311 or $565 a month, depending on your work history.
- $1,736Deductible per benefit period. A benefit period starts when you’re admitted and ends after you’ve been out of the hospital or skilled nursing care for 60 days in a row.
Part B (Medical)
- $202.90Standard monthly premium. Higher incomes pay more (see IRMAA below).
- $283Yearly deductible.
- 20%After the deductible, you usually pay 20% of the Medicare-approved amount for most services. Original Medicare has no yearly limit on what you pay out of pocket.
Part D (Prescription Drugs)
- Varies by planMonthly premium.
- $615Deductible: no plan can charge more than $615 in 2026.
- $2,100Yearly cap: once you pay $2,100 out of pocket for covered drugs in 2026, you pay $0 for covered drugs for the rest of the year.
- $35Insulin: no more than $35 for a month’s supply of each covered insulin.
- $0Recommended adult vaccines, like shingles and Tdap, cost nothing under Part D.
- Monthly paymentsThe Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly bills from your plan during the calendar year, instead of paying at the pharmacy. You sign up through your plan. It doesn't lower what you pay in total. It only spreads it out.
If You Stay in the Hospital (Part A)
Hospital stay, after the $1,736 deductible:
- Days 1 to 60$0 a day
- Days 61 to 90$434 a day
- Lifetime reserve days (60 extra days you can use once in your lifetime)$868 a day
Skilled nursing facility:
- Days 1 to 20$0
- Days 21 to 100$217 a day
Medicare Advantage (Part C)
Premiums, copays, and extra benefits vary by plan. Every plan has a yearly limit on what you pay for covered Part A and Part B services.
Shopping for 2027 coverage? For 2027, Part D plans can charge a deductible of up to $700, and the yearly out-of-pocket cap for covered drugs rises to $2,400. We’ll update the other amounts on this page when Medicare announces 2027 figures.
Sources: CMS, 2026 Medicare Parts A & B Premiums and Deductibles; Social Security, Medicare premiums for higher-income beneficiaries; and Medicare.gov.
Does My Income Change What I Pay? (2026 IRMAA)
Most people pay the standard Part B premium. IRMAA only applies if your income is above $109,000 (single) or $218,000 (married, filing jointly). Skip to help with costs
If it is, you pay an extra monthly amount on top of your Part B and Part D premiums. This is called IRMAA, the Income-Related Monthly Adjustment Amount. For 2026, Social Security looks at your 2024 tax return (your modified adjusted gross income). Find your income range below.
| If you file single (2024 income) | If you file jointly (2024 income) | Your Part B monthly premium | Part D add-on per month |
|---|---|---|---|
| $109,000 or less Most people | $218,000 or less | $202.90 | $0 |
| More than $109,000 up to $137,000 | More than $218,000 up to $274,000 | $284.10 | $14.50 |
| More than $137,000 up to $171,000 | More than $274,000 up to $342,000 | $405.80 | $37.50 |
| More than $171,000 up to $205,000 | More than $342,000 up to $410,000 | $527.50 | $60.40 |
| More than $205,000 and less than $500,000 | More than $410,000 and less than $750,000 | $649.20 | $83.30 |
| $500,000 or more | $750,000 or more | $689.90 | $91.00 |
The Part D add-on is paid to Medicare, on top of your plan’s premium. It applies to any Medicare drug coverage, including drug coverage that’s part of a Medicare Advantage plan. Married and filing separately? Different amounts apply, and we’re happy to walk you through them.
Did Your Income Go Down?
If your income went down because of a life-changing event, like stopping or cutting back on work, marriage, divorce, the death of a spouse, or losing pension income, you can ask Social Security to lower your IRMAA using form SSA-44.
Limited Income? Help Is Available
Extra Help is a Medicare program that lowers Part D premiums and drug costs for people with limited income and resources.
Medicare Savings Programs help pay Medicare premiums, and sometimes deductibles and coinsurance. In California they are part of Medi-Cal. You can apply online at BenefitsCal.org, by mail, by phone, or in person at your county social services office. In other states, contact your state Medicaid office.
| Program | Helps pay | Monthly income limit (single / couple) |
|---|---|---|
| QMB (Qualified Medicare Beneficiary) | Part A and B premiums, deductibles, and coinsurance | $1,330 / $1,804 |
| SLMB (Specified Low-Income Medicare Beneficiary) | Part B premium | $1,596 / $2,165 |
| QI (Qualifying Individual) | Part B premium | $1,796 / $2,436 |
QI is only for people who have Part A and don't get Medi-Cal. If you qualify for a Medicare Savings Program, you automatically qualify for Extra Help too. Starting January 1, 2026, the California asset limit is $130,000 for one person, plus $65,000 for each additional household member. The home you live in and one car usually don't count. Some income is not counted, so you may qualify even if your income is a little higher. Source: California DHCS.
Have Medicare and Medi-Cal? Medicare pays first and Medi-Cal pays second, and you may be able to join a D-SNP. Learn about D-SNPs.
Want help reading these numbers?
A licensed agent can walk you through what applies to your income.
Where Can I Find Medicare Forms?
These are the forms and programs people ask us about most. These forms are on official government websites. We are not a government agency.
Sign Up for Part A Only (Form CMS-18-F-5)
Still working past 65 with health coverage through your job or your spouse's job? Many people sign up for Part A only and delay Part B. Ask your benefits office how your plan works with Medicare first. You can apply online at Social Security or send the paper form to your local Social Security office. If you have a Health Savings Account (HSA), Medicare says to stop contributing 6 months before you apply, to avoid a tax penalty.
Sign up online at SSA.gov
Form CMS-18-F-5 (PDF)
Información en español
Sign Up for Part B (Form CMS-40B)
Use this form to sign up for Medicare Part B if you already have Part A. Many people use it when they retire or lose job-based coverage after 65.
Form CMS-40B (PDF)
Formulario CMS-40B en español (PDF)
Sign up online at SSA.gov
Proof of Job-Based Coverage (Form CMS-L564)
If you delayed Part B because you had health coverage through your job or your spouse's job, your employer fills out part of this form. Send it in with Form CMS-40B. It shows you had coverage, so you can sign up during a Special Enrollment Period.
Ask to Lower Your IRMAA (Form SSA-44)
If your income went down because of a life-changing event, like retiring, marriage, divorce or the death of a spouse, you can ask Social Security to lower your income-related premium amount.
How to request a lower IRMAA (SSA.gov)
Form SSA-44 (PDF)
Información en español
Extra Help With Part D Drug Costs
Extra Help lowers Part D premiums and drug costs for people with limited income and resources. You can apply online with Social Security or by phone at 1-800-772-1213 (TTY 1-800-325-0778).
Apply for Extra Help (SSA.gov)
Solicitar el Beneficio Adicional (en español)
Looking for a different form? See all Medicare enrollment forms on Medicare.gov. Forms can change, so always use the newest version from the official site. We are not connected with or endorsed by the U.S. government or the federal Medicare program. Not sure which form you need? Call us at (844) 629-9687.
Want free, unbiased Medicare counseling? California's Health Insurance Counseling and Advocacy Program (HICAP) offers it throughout California. Call 1-800-434-0222.
Medicare Questions We Hear Often
How much is the Medicare Part B premium in 2026?
The standard Part B premium is $202.90 a month in 2026, and the deductible is $283. People with higher incomes pay more because of IRMAA.
I’m still working at 65. Do I have to sign up for Part B?
Not always. If you or your spouse have health coverage from a current job at an employer with 20 or more employees, you can usually delay Part B without a penalty and sign up within 8 months after that job or coverage ends, whichever happens first. COBRA and retiree coverage don't count as coverage from a current job. If the employer has fewer than 20 employees, Medicare usually pays first, so you generally need Part B when you are first eligible. If you contribute to a Health Savings Account (HSA), check before enrolling in Part A. Talk with your benefits office, and with us, before you decide.
Will I be signed up automatically?
If you already get Social Security benefits, you’re usually enrolled in Parts A and B automatically, and your card arrives about 3 months before your 65th birthday. If not, you sign up through Social Security.
Can I keep my doctors?
It depends on your coverage. With Original Medicare, you can see any doctor in the U.S. who accepts Medicare. With a Medicare Advantage plan, you usually use the plan's network: HMOs usually require in-network doctors, and PPOs let you go out of network for a higher cost. Check that your doctors are in the network before you enroll, and again each fall.
Do I need Part D if I don’t take any prescriptions?
You aren’t required to enroll. But if you go 63 days or more without Part D or other creditable drug coverage after you first become eligible, you may pay a late enrollment penalty for as long as you have Medicare drug coverage.
What’s the difference between Medigap and Medicare Advantage?
Medigap policies help pay costs Original Medicare doesn’t cover, and they work only with Original Medicare. Medicare Advantage plans are an all-in-one alternative to Original Medicare, usually with a network of providers.
Does it cost anything to work with MAX?
No. There’s no charge for our help. We’re paid by the insurance companies whose plans we offer. Learn more about MAX.
Talk With a Licensed Medicare Agent in Huntington Beach and Southern California
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