Medicare FAQ: The 20 Questions
Everyone Asks

Medicare has four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage, offered by private insurers), and Part D (prescription drug coverage). Most people become eligible at age 65, though you can qualify earlier if you receive Social Security Disability Insurance for 24 months or are diagnosed with ALS or ESRD.

Even with premium-no-cost Part A, you still pay deductibles and coinsurance. The Part A deductible is $1,676 per benefit period in 2025. Part B has an annual deductible of $257 in 2025, after which you pay 20% of Medicare-approved amounts. Higher-income beneficiaries pay more through IRMAA surcharges.

If you miss your IEP, you can enroll during the General Enrollment Period (January 1 through March 31 each year, with coverage starting July 1) but you may face permanent late enrollment penalties. If you have active employer coverage, you may qualify for a Special Enrollment Period that gives you 8 months after employment or coverage ends to enroll without penalty.

With Original Medicare, many people add a Medigap policy to cover the 20% coinsurance on Part B services and a standalone Part D plan for drugs. Medicare Advantage bundles everything into one plan and often adds dental, vision, hearing, and fitness benefits at no extra premium. The trade-off is network restrictions and prior authorization requirements.

Part A has a per-benefit-period deductible of $1,676 in 2025. After the deductible, days 1 through 60 of a hospital stay are fully covered. Days 61 through 90 require a daily coinsurance of $419. Beyond 90 days, you use lifetime reserve days at $838 per day. Skilled nursing facility care requires a preceding 3-day inpatient hospital stay under Original Medicare.

After meeting the annual deductible ($257 in 2025), you typically pay 20% of the Medicare-approved amount for most Part B services. There is no annual out-of-pocket maximum under Original Medicare, which is why many beneficiaries purchase a Medigap policy. Preventive services like mammograms and colonoscopies are covered at 100% with no cost-sharing.

Part D plans have formularies (lists of covered drugs) organized into tiers, with different cost-sharing for generics, preferred brands, and specialty medications. If you do not enroll in Part D when first eligible and lack creditable drug coverage, you will pay a permanent late enrollment penalty of 1% of the national base beneficiary premium ($38.99 in 2026) for each month without coverage.

Total Medicare costs depend on which coverage you choose. Original Medicare with a Medigap Plan G in Alabama typically costs $150 to $250 per month for the supplement premium, plus the $202.90 Part B premium, plus a Part D premium. Medicare Advantage plans may have $0 premiums but include copays and coinsurance at the point of care. Higher earners pay IRMAA surcharges on both Part B and Part D.

The most popular Medigap plans in 2026 are Plan G and Plan N. Plan G covers all gaps except the annual Part B deductible. Plan N covers most gaps but has small copays for office visits and emergency room visits. During your 6-month Medigap Open Enrollment Period (starting when you turn 65 and enroll in Part B), insurers cannot deny you coverage or charge more due to health conditions.

Before the Inflation Reduction Act, once you and your plan spent a combined amount on covered drugs, you entered the coverage gap and paid 25% of costs until reaching the catastrophic threshold. Now, the $2,000 annual cap means once you hit that amount in out-of-pocket costs, you pay nothing more for covered drugs for the rest of the year. You can also spread the $2,000 across monthly payments through the Medicare Prescription Payment Plan.

Over 97% of physicians in the U.S. accept Medicare. If keeping your current doctor is a top priority, Original Medicare with a Medigap supplement offers the most flexibility. Before enrolling in any Medicare Advantage plan, verify that your doctors and preferred hospitals are in the plan's network for the current plan year, as networks can change annually.

For example, if you delay Part B enrollment by 2 years without qualifying employer coverage, your Part B premium increases by 20% for life. On the 2026 standard premium of $202.90, that is an extra $40.58 per month, or roughly $487 per year, every year. You can only sign up during the General Enrollment Period (January 1 through March 31), with coverage not starting until July 1.

Original Medicare covers limited dental services that are medically necessary, such as jaw surgery or dental exams before heart valve surgery. It covers one pair of glasses after cataract surgery and diagnostic hearing exams ordered by a doctor. For comprehensive coverage, you can purchase standalone dental and vision policies or choose a Medicare Advantage plan that includes these benefits.

IRMAA is an income surcharge, not a late-enrollment penalty. In 2026 the first bracket adds $81.20 to Part B and $14.50 to Part D, or $95.70 in total IRMAA extra per month. The highest bracket adds $487.00 and $91.00, or $578.00 extra per month ($6,936 for the year). If both spouses are on Medicare, each pays that extra. If your income dropped after retirement, divorce, or death of a spouse, you can request a lower amount with Form SSA-44.

Each Part D plan has its own formulary organized into tiers. Tier 1 (preferred generics) has the lowest copays, while Tier 5 (specialty drugs) has the highest. Plans can change their formulary each year, so it is critical to review your plan during the Annual Enrollment Period to confirm your medications are still covered at the same cost. Medicare.gov's Plan Finder tool lets you compare plans based on your specific drug list.

In addition to AEP, the Medicare Advantage Open Enrollment Period (January 1 through March 31) allows you to switch between Medicare Advantage plans or return to Original Medicare with a standalone Part D plan. There are also Special Enrollment Periods triggered by qualifying life events such as moving, losing employer coverage, or qualifying for Extra Help.

Active employer coverage from a company with 20+ employees qualifies you for a Special Enrollment Period, allowing you to delay Part B and Part D enrollment without penalty. However, COBRA coverage, retiree health plans, and ACA marketplace plans do not count as active employer coverage and do not protect you from late enrollment penalties. When your employment or employer coverage ends, you have 8 months to enroll in Part B.

Qualifying for Extra Help can save you an average of $5,000 or more per year in drug costs. It also qualifies you for a Special Enrollment Period to switch Part D plans at any time. You can apply through Social Security (ssa.gov), your state Medicaid office, or by contacting a licensed insurance broker. Many people who qualify do not know they are eligible.

Long-term care is one of the most significant financial risks for retirees. The average cost of a private room in a nursing home exceeds $100,000 per year. Options for covering long-term care include long-term care insurance policies, hybrid life insurance policies with long-term care riders, and Medicaid (which requires spending down assets to qualify). Planning for long-term care should start well before retirement.

Key factors to evaluate include monthly premiums, annual out-of-pocket maximums, provider networks (for Advantage plans), prescription drug formularies, and extra benefits like dental and vision. In Alabama, an independent broker like Dalton Insurance Agency can compare plans from every major carrier and help you enroll during your enrollment window, all at zero cost because brokers are paid by the insurance companies.