Medicare

People who are enrolled in both Medicare and Medicaid, also known as dually eligible individuals, fall into several eligibility categories. These individuals may either be enrolled first in Medicare and then qualify for Medicaid, or vice versa.

Part A 

Covers hospitals, hospice, and skilled nursing care; no charge to Medicare beneficiaries for premiums, but deductibles and co-insurance apply.

Part B 

Covers doctors’ services, outpatient care, and preventive services; income-based premiums apply, along with an annual deductible and 20% coinsurance.

Part C 

Also known as Medicare Advantage. Coverage is the same as Part B, and may also include dental, vision, fitness, and meals. It is provided by private insurance carriers and requires payment of the Medicare Part B premium; some plans have additional premium costs. These plans are subject to restricted networks, pre-authorization requirements, and referrals for specialist care. Usually covers medications.

Part D 

This is for medications only; it is administered by a private company. Beginning in 2025, the annual out-of-pocket cost for Part D is capped at $2,000. Once enrollees have spent $2,000 in out-of-pocket costs for covered medications, there are no copayments or coinsurance costs for the rest of the year.

Health insurance sold by private insurance companies to fill the “gaps” in Traditional Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Traditional Medicare Plan does not cover, such as deductibles and coinsurance. Eligibility requirements are the same as for Medicare A. Medigap providers are any providers that accept Medicare.

​Medicare Part A:
Most people who are 65 and over who are eligible for Medicare, and have worked and paid Medicare taxes for at least 10 years, are not required to pay a Medicare Part A premium. There is also no premium for Medicare eligible individuals who are younger than age 65.

If you are in a situation where you do not qualify for free Part A coverage, and you fail to sign up and pay for Part A on time, your monthly premium may go up by as much as 10%.​

The penalty duration is for twice the number of years you didn’t sign up. For example, if you failed to sign up for 2 years, you’ll pay the penalty for 4 years, UNLESS you meet criteria to sign up for Part A during a Special Enrollment Period.​

Learn more: https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties​

Medicare Part B:
Most people need to sign up for Part B when they become eligible. Generally, you won’t have to pay a Part B penalty if you sign up on time or qualify for a Special Enrollment Period. ​

If you do not sign up when you are first eligible, you will incur a penalty of 10% for each year that you failed to sign up. This penalty is added to your monthly premium and is permanent. This penalty does not apply if you are Medicare eligible, but choose to have qualified health insurance through your employer or through your spouse’s work.

Medicare Part D:
You will incur a penalty if you fail to get a Medicare Drug plan when you first go on Medicare. The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage from the time you first sign up with Medicare. Creditable drug coverage refers to prescription drug coverage that on average is likely to pay as much as Medicare drug coverage or more.​​

The penalty is an extra 1% per month. Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” (an amount calculated by the Centers for Medicare and Medicaid Services each year) ($38.99 in 2026) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.​

​The national base beneficiary premium may change each year, so your penalty amount may also increase or decrease each year.​

​Learn more: https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/part-d-late-enrollment-penalty​