Medicare Supplement: The Complete Guide

The Short Answer

A Medigap policy — also called a Medicare Supplement — is a separate insurance policy you buy from a private company that pays most or all of the costs Original Medicare leaves you owing: the 20% coinsurance, the hospital deductible, and more, depending on the plan. You keep Original Medicare exactly as it is — any doctor, any hospital, nationwide, no networks — and the Medigap policy just fills in behind it. The tradeoff is a higher monthly premium in exchange for costs that are far more predictable. It’s the other major path through Medicare, alongside Medicare Advantage, and the two are genuinely different products solving the same problem in opposite ways.

Key Takeaways

  • Medigap doesn’t replace Medicare — it works alongside Original Medicare to pay the gaps.
  • Plans are standardized by letter (A, B, D, G, K, L, M, N) — but in practice, Plan G and Plan N account for the vast majority of new enrollments, and several of the other letters are rarely chosen once the numbers are compared.
  • Every insurer selling “Plan G,” for example, has to cover the exact same benefits — the only real differences between companies are premium, customer service, and financial strength.
  • Medigap doesn’t include drug coverage — you’ll pair it with a separate Part D plan.
  • Your best window to enroll without medical underwriting is your 6-month Medigap Open Enrollment Period, which starts the month you’re 65 and enrolled in Part B.
  • Medigap and Medicare Advantage don’t work together — you pick one path or the other.

What a Medigap Policy Actually Does

Original Medicare covers a lot, but it doesn’t cover everything, and it doesn’t cap what you could owe in a bad year. After Medicare pays its share of a covered service, you’re typically responsible for 20% of the bill — with no ceiling on how high that 20% could add up if you have a serious illness or a long hospital stay.

A Medigap policy exists to close that gap. Depending on which lettered plan you choose, it can pay some or all of:

  • The 20% coinsurance Original Medicare leaves you owing
  • The Part A hospital deductible ($1,736 in 2026)
  • Skilled nursing facility coinsurance
  • The first three pints of blood, if you ever need a transfusion
  • In some plans, a portion of the Part B deductible ($283 in 2026) — though this benefit is being phased out for anyone new to Medicare since 2020

Paul’s Honest Take: The easiest way I explain this to a client: Original Medicare is like a really good insurance policy with a 20% co-pay that never stops. Medigap is what takes that 20% off your plate. Once it’s in place, most people go years without ever seeing a real medical bill beyond their monthly premium.

Medigap vs. Medicare Advantage: The Distinction Almost Nobody Explains Well

If you’ve read our [Medicare Advantage guide], you’ve already seen this comparison from the other side. It’s worth repeating here, because this is the decision point that confuses more people than anything else in Medicare.

Path 1: Original Medicare + Medigap. You keep Original Medicare exactly as it is — nationwide access, no networks, no referrals — and layer a Medigap policy on top to cover the gaps. You pay a higher monthly premium for the privilege, but your costs at the doctor’s office or in the hospital become extremely predictable, often close to $0 depending on the plan. You’d add a standalone Part D plan alongside it for drug coverage.

Path 2: Medicare Advantage. You give up the “any doctor, anywhere” structure for a plan that usually includes drug coverage and extras like dental and vision, often with a low or $0 monthly premium. Your costs show up as copays when you use care, capped at a yearly maximum, but you don’t know the exact bill until after you’ve gotten care.

Original Medicare + Medigap Medicare Advantage
Monthly premium Higher — varies by plan and age, plus a separate Part D plan Often $0–$50, plus your Part B premium
Doctor access Any doctor or hospital in the U.S. that accepts Medicare Limited to plan's network, usually within your service area
Referrals needed? No Often yes, for HMO plans
Drug coverage Requires a separate Part D plan Usually built in
Extra benefits (dental, vision, hearing) Not included — buy separately if wanted Usually included
Yearly cost cap No hard cap, but costs are far more predictable month to month Yes — $9,250 in-network max for 2026
Cost when you actually get sick Minimal to none, depending on your plan Copays and coinsurance, up to your yearly max
Traveling out of state or abroad Covered nationwide; some plans include limited foreign travel coverage Usually limited or not covered outside your service area
Enrolling later without medical questions Best window is a one-time 6-month period; after that, may require underwriting Easier to get into anytime during an enrollment period

Paul’s Honest Take: If I had to boil this down to one sentence: Medigap trades a higher monthly cost for predictability. Medicare Advantage trades predictability for a lower monthly cost. I’ve enrolled thousands of people in both, and the right answer depends on your health, your finances, and your personality. Some people sleep better knowing exactly what a hospital stay will cost before it happens — that’s who Medigap is really built for.

The Lettered Plans, Explained

Every Medigap plan is standardized by law, named with a letter. That standardization is actually one of the best consumer protections in all of Medicare: a Plan G from one company covers the exact same benefits as a Plan G from any other company, in the same state. The only things that differ between insurers are price, customer service, and financial stability.

The plans available today are: A, B, D, G, K, L, M, and N. (Plans C, F, and the high-deductible version of F are closed to anyone who became eligible for Medicare on or after January 1, 2020 — if you already have one of these, you can keep it, but new enrollees can’t buy them.)

The two plans almost everyone actually compares

Plan G is the most comprehensive plan available to anyone new to Medicare since 2020, and it’s become the most popular Medigap plan sold today. It covers everything except the Part B deductible ($283 in 2026) — you pay that once, out of pocket, and after that, Plan G covers your share of virtually everything else.

Plan N covers nearly as much as Plan G, but asks you to share a bit more of the cost in exchange for a noticeably lower premium: you pay small copays (up to $20 for a doctor visit, up to $50 for an ER visit that doesn’t result in admission), and you may be responsible for “excess charges” — the difference some doctors are legally allowed to charge above what Medicare approves, which Plan G covers in full and Plan N does not.

Paul’s Honest Take: Plan G vs. Plan N is the single most common comparison I run for clients, and it genuinely comes down to math. If the premium difference in your area is bigger than what you’d realistically pay in Plan N’s copays over a year, Plan N usually wins. If it’s close, most people prefer Plan G’s simplicity — no copay to think about, no excess charge to worry about, ever.

High-Deductible Plan G: the third option most people never hear about

There’s a lower-premium version of Plan G with a real tradeoff built in: High-Deductible Plan G. It pays the exact same benefits as standard Plan G, but only after you’ve paid $2,950 out of pocket yourself in a calendar year (2026 figure, adjusted annually — this includes your Part B deductible). Once you hit that number, it covers 100% of your Medicare-approved costs for the rest of the year, just like standard Plan G does from day one.

Paul’s Honest Take: High-Deductible Plan G is one of the most underused plans in Medicare, and it’s the one I recommend most often when I genuinely believe it’s the right fit — even though it pays me a lower commission than standard Plan G. I say that on purpose: if I’m recommending a plan that earns me less, you know it’s about what’s right for you, not what’s right for my paycheck. For someone in reasonably good health who wants real protection against a catastrophic year without paying a high premium every single month for coverage they may barely use, the math on High-Deductible Plan G can be excellent.

The other standardized plans, briefly

  • Plan A — the most basic level of coverage, covering the core benefits only. Rarely the best value once you compare total costs.
  • Plan B — Plan A’s benefits plus the Part A deductible.
  • Plan D — Broad coverage similar to Plan G, but without the Part B excess charge protection.
  • Plan K and Plan L — Lower premiums in exchange for cost-sharing on most benefits, with an annual out-of-pocket limit that caps your worst-case year.
  • Plan M — Covers half the Part A deductible, no Part B deductible coverage.

For most people shopping today, the real decision is almost always between Plan G, Plan N, and High-Deductible Plan G — the rest exist, but rarely come out ahead once you run the numbers.

The Plans Almost Nobody Actually Buys

It’s worth saying plainly: Plan G and Plan N account for the overwhelming majority of new Medigap enrollments today, and High-Deductible Plan G has been steadily gaining ground behind them. Plans A, B, D, K, L, and M still technically exist and are still sold in most states, but very few people newly shopping Medigap actually end up choosing them — the coverage-to-premium math on Plan G or Plan N almost always comes out ahead. If an agent is showing you one of these lesser-used letters, it’s worth asking directly why, compared to Plan G or Plan N, for your specific situation.

Why Doctors and Hospitals Tend to Prefer Medigap Patients

This doesn’t get talked about much, but it’s real, and it’s worth knowing: many doctors and hospitals genuinely prefer treating patients on Original Medicare with a Medigap policy over patients on Medicare Advantage. A few honest reasons why:

  • No prior authorization hassle. Original Medicare rarely requires a provider to get advance approval before performing a service. Medicare Advantage plans frequently do, which means more paperwork, more delays, and more denied or reduced claims for the provider’s office to fight.
  • Simpler, faster claims. Billing Original Medicare is a well-worn, predictable process. Billing dozens of different Medicare Advantage plans, each with its own rules, is genuinely more administrative work for a practice.
  • Providers are typically paid Medicare’s standard rate promptly, without the extra negotiation, documentation, or appeals that can come with a Medicare Advantage claim.

Paul’s Honest Take: I’ve had more than one doctor’s office tell a client, off the record, that they simply prefer seeing Original Medicare patients. That’s not a knock on Medicare Advantage — plenty of practices handle it well — but it’s a real, practical reason some people find their appointments easier to book and their care less encumbered by paperwork once they’re on Original Medicare with a Medigap policy behind it.

Medigap Doesn’t Include Drug Coverage

This trips people up constantly: a Medigap policy does not include prescription drug coverage. If you go the Medigap route, you’ll need to separately enroll in a standalone Part D plan to cover your medications. It’s an extra decision and an extra monthly premium, but it also means you can pick the Part D plan that best matches your specific medications, rather than being stuck with whatever drug formulary comes bundled into a Medicare Advantage plan.

When to Enroll: The Window That Matters Most

Here’s the single most important timing rule in this entire guide: your Medigap Open Enrollment Period is a 6-month window that starts the month you’re both 65 or older and enrolled in Part B. During this window, insurance companies have to sell you any Medigap policy they offer, at their best available rate, regardless of your health history. No medical questions, no denials, no charging you more because of a pre-existing condition.

Miss that window, and it’s a different story. Outside of it, insurers in most states are allowed to ask health questions, charge you more, or deny you coverage entirely based on your medical history — unless you qualify for a guaranteed issue right, which applies in specific situations like losing employer coverage or a Medicare Advantage plan leaving your area.

Paul’s Honest Take: This is the single biggest Medigap mistake I see, and it’s almost always avoidable. Someone enrolls in Medicare Advantage at 65, decides five years later they want to switch to Medigap, and discovers they now have to answer health questions — and depending on what’s changed with their health, they might get a higher rate or even get turned down. If there’s any chance you might want Medigap down the road, it’s worth having that conversation before your Open Enrollment window closes, not after.

You Can Apply to Switch Medigap Plans Any Month — But That Doesn’t Mean You’ll Get Approved

This is a distinction that trips people up: you can apply to switch your Medigap policy in any month of the year. There’s no calendar restriction on when you’re allowed to submit an application. What most states don’t guarantee, outside of your original Open Enrollment window or a qualifying guaranteed issue event, is that you’ll actually be approved.

In most states, once you’re outside those protected windows, the new insurer is legally allowed to ask health questions and can decline your application or charge you a higher rate based on your health history. So “I can switch anytime” and “I’m guaranteed to get the new plan” are two different things — and it’s the second one that actually matters.

The Birthday Rule: A Growing List of Exceptions

There’s an important, and fairly recent, wrinkle to this: a growing number of states have passed their own Medigap Birthday Rule — a state-level law that gives existing Medigap policyholders a short annual window, tied to their birthday, to switch to a different plan or carrier without medical underwriting, even outside their original enrollment window.

Here’s how it generally works where it exists: for a set number of days around your birthday each year — commonly 30 to 63 days, depending on the state — you can apply to switch to a Medigap plan with equal or lesser benefits, and the new insurer has to accept you at their standard rate, no health questions asked. Some states restrict you to switching within your current insurance company; others let you move to any carrier. The exact window length and rules vary meaningfully state to state.

As of 2026, the birthday rule has been adopted in a growing list of states, including California, Idaho, Illinois, Kentucky, Louisiana, Maryland, Nevada, Oklahoma, Oregon, Rhode Island, Utah, Virginia, Wyoming, and — newly added for 2026 — Delaware, Indiana, and West Virginia. New Mexico’s version is set to take effect January 1, 2027. A handful of other states, including New York, Connecticut, Maine, and Massachusetts, take a different approach and offer broader year-round guaranteed-issue protections instead of a birthday-specific window.

Paul’s Honest Take: This is one of the fastest-moving parts of Medigap right now — new states are adding birthday rules almost every legislative session, and the details genuinely differ from state to state: window length, which carriers you can move to, whether you need the same plan letter or just “equal or lesser” benefits. If you’re in a birthday rule state, this can be a real opportunity to shop your premium down every single year without medical underwriting — but only if you actually know your window and use it. I check this for every Medigap client I have, every year, because most people have no idea the option exists.

How Medigap Premiums Are Priced

Medigap premiums aren’t priced the same way everywhere, and this matters more than most people realize. Insurers use one of three rating methods:

  • Community-rated: Everyone pays the same premium regardless of age. Premiums only rise due to inflation or claims experience, not because you got older.
  • Issue-age-rated: Your premium is locked in based on your age when you first bought the policy — it won’t go up just because you get older, though it can still rise due to inflation.
  • Attained-age-rated: Your premium is based on your current age, and increases as you age, in addition to any inflation-related increases.

Paul’s Honest Take: Two people can buy the exact same Plan G and end up on very different pricing trajectories over 15 years, depending purely on which rating method their state and carrier use. This is exactly the kind of thing I check before recommending a specific company — not just today’s premium, but how it’s likely to move over time.

Premiums Have Been Rising Faster Than People Expect — Especially Since COVID

Medigap has always carried a higher monthly premium than Medicare Advantage in exchange for its predictability. What’s changed more recently is the pace those premiums have been climbing. Since the pandemic, Medigap carriers across the board have pushed through noticeably larger annual rate increases than the years before it — driven by higher medical costs, rising utilization, and inflation working through the healthcare system generally.

Paul’s Honest Take: This is exactly why I don’t just enroll a client in a Medigap plan and disappear. A rate that’s competitive today can be one of the pricier options in three or four years, especially with an attained-age-rated carrier. I review my clients’ Medigap premiums regularly — not just at enrollment — because “set it and forget it” isn’t really a safe strategy with this kind of coverage anymore.

Original Medicare Is Getting Its Own Prior Authorization Pilot

One more thing worth knowing, because it’s new and it’s genuinely changing the landscape: for years, one of Original Medicare’s biggest selling points over Medicare Advantage has been that it rarely requires prior authorization before you get care. That’s starting to shift. CMS has launched a pilot program — called the WISeR Model — that requires prior authorization or pre-payment review for a specific list of outpatient services under Original Medicare, currently running in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington, for services delivered from January 2026 through 2031.

This pilot only applies to a defined list of about 17 outpatient services (things like certain nerve stimulators, skin substitutes, and specific pain-management injections) — it does not touch routine visits, hospital stays, or most of what a typical Medigap client experiences day to day. But it’s a real shift worth watching: if the pilot expands, more of Original Medicare could eventually look a little more like the prior-authorization process people associate with Medicare Advantage today.

Paul’s Honest Take: I bring this up with clients not to scare anyone — this pilot is narrow, and it doesn’t apply outside these six states right now. But “Original Medicare never requires prior authorization” has been one of the strongest arguments for Medigap for years, and it’s not quite as absolute a statement as it used to be. I’ll keep watching this one closely and update clients if it expands.

Who Medigap Tends to Fit Well

  • You want the freedom to see any doctor or specialist in the country, anytime, without a referral
  • Predictable monthly costs matter more to you than the lowest possible premium
  • You travel frequently, split time between two states, or spend part of the year outside your home area
  • You have a chronic or serious health condition where minimizing surprise costs matters
  • You’re within your 6-month Medigap Open Enrollment window and want to lock in coverage without medical underwriting

Who Should Take a Harder Look at the Alternative

  • Keeping your monthly premium as low as possible is the top priority
  • You’d like dental, vision, and hearing coverage bundled into one plan
  • You’re comfortable with a network of doctors and occasional referrals
  • You’re generally healthy and comfortable with some unpredictability in exchange for lower fixed costs

     

Frequently Asked Questions

No. It’s actually illegal for someone to knowingly sell you a Medigap policy while you’re enrolled in Medicare Advantage, because the two aren’t designed to work together.
No. You’ll need a separate standalone Part D plan alongside any Medigap policy.
Plan N has a lower premium but asks you to pay small copays for office and ER visits, and it doesn’t cover “excess charges” that Plan G covers in full. For most people, it comes down to whether the premium savings outweigh the potential copays over a year.
Yes, but outside your initial 6-month Open Enrollment window or a guaranteed issue situation, the new insurer can generally ask health questions and may charge you more or decline coverage based on your health
Only if you were eligible for Medicare before January 1, 2020. If you’re newly eligible, Plan F (including its high-deductible version) is no longer sold to you — Plan G is the closest equivalent available today.
Because while the benefits are standardized by law, the price isn’t. Company financial strength, rating method (community, issue-age, or attained-age), and simple business strategy all affect price — this is exactly why shopping the same lettered plan across multiple carriers matters.
You can apply any month. Whether you’re approved is a different question — outside your original Open Enrollment window or a guaranteed issue event, most states allow the insurer to ask health questions and potentially decline or upcharge you.
 A state-level law, now active in a growing number of states, that gives existing Medigap policyholders a short annual window around their birthday to switch plans or carriers without medical underwriting. Rules and window length vary significantly by state.
Historically, almost never. That’s beginning to change on a limited basis — a CMS pilot program called WISeR now requires prior authorization for a specific list of outpatient services in six states (Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington). It doesn’t affect routine care, and it isn’t nationwide, but it’s a trend worth watching.
 Mainly ease of administration — less prior authorization, more predictable claims processing, and prompt payment at Medicare’s standard rate. This isn’t universal, but it’s a common reason some practices are more accommodating to patients on Original Medicare with a Medigap policy

The Bottom Line

Medigap isn’t the “expensive” option and Medicare Advantage isn’t the “cheap” one — they’re two different philosophies for handling the same gap in Original Medicare, and the right one depends on how you value predictability versus a lower monthly cost. If freedom to see any doctor, anywhere, without a referral, and knowing almost exactly what a bad health year will cost you matters most, Medigap is very likely worth the higher premium. If keeping your monthly cost low matters more and you’re comfortable with a network, Medicare Advantage may make more sense.

If you want to run the actual numbers for your situation — comparing specific Medigap carriers, or comparing Medigap against Medicare Advantage side by side — that’s exactly the conversation I have with clients every day, at no cost to you. I represent 40+ carriers, so there’s no company I’m pushed to recommend over another.

Call 631-358-5793 or visit paulbinsurance.com to set up a time to talk it through.

Paul Barrett, CMIP, is the founder of The Modern Medicare Agency and has spent 18+ years exclusively helping people navigate Medicare — never life insurance, never annuities, just Medicare. He’s licensed in 37 states, represents more than 40 carriers, and has personally helped over 5,000 clients choose coverage that actually fits their lives.

Figures current as of 2026 and sourced from CMS. Medigap availability, pricing, and rating methods vary by state — always verify specific plan rates for your state before enrolling.

What Is Medicare Part B and What Does It Actually Cover?

The complete guide to Medicare’s medical insurance — every service it covers, exactly what it costs in 2026, how it works with group insurance and VA benefits, and the excess charges most people have never heard of until they get a surprise bill.

The Short Answer

Medicare Part B is medical insurance — it covers doctor visits, outpatient care, preventive services, durable medical equipment, and more. Unlike Part A, Part B is not premium-free for anyone: everyone pays a monthly premium (202.90in2026formostpeople),anannualdeductible(283), and 20% coinsurance on most covered services, with no yearly cap on that 20% under Original Medicare alone. Whether you need to enroll at 65, and whether delaying is safe, depends heavily on your employment status and your employer’s size — getting this wrong is one of the most consequential and permanent mistakes in all of Medicare.

Key Takeaways

  • Part B is never premium-free — everyone pays a monthly premium, and higher earners pay significantly more through IRMAA.
  • The 20% coinsurance under Original Medicare alone has no yearly cap — this is the single biggest financial risk in Medicare, and it’s the reason Medigap and Medicare Advantage exist.
  • Whether you can safely delay Part B without a penalty depends on your employer’s size: 20+ employees generally allows delay; fewer than 20 generally does not.
  • Missing your enrollment window triggers a permanent 10% penalty for every 12-month period you went without coverage.
  • Veterans can and generally should enroll in Part B even with VA benefits, since Medicare and VA coverage don’t coordinate — each only pays for care received within its own system.
  • “Excess charges” from non-participating providers can add up to 15% on top of what Medicare approves, and only some Medigap plans protect you from them.

What Part B Actually Covers

While Part A handles hospital room and board, Part B is the half of Original Medicare that covers medical care and most services delivered outside a hospital admission — doctor visits, outpatient procedures, and ongoing medical needs.

What’s covered

  • Doctor visits — primary care and specialists
  • Outpatient surgeries and procedures
  • Diagnostic lab work, X-rays, and MRIs
  • Emergency room visits
  • Ambulance services
  • Outpatient mental health care
  • Physical, occupational, and speech therapy
  • Chemotherapy and radiation received in an outpatient clinic
  • Durable Medical Equipment (DME) — wheelchairs, oxygen equipment, blood sugar monitors, walkers, and similar equipment
  • Ambulatory surgical center services

Preventive services: the part Medicare gets genuinely right

Most preventive services are covered at 100%, with no deductible and no copay, as long as your provider accepts Medicare assignment. This includes:

  • Your one-time “Welcome to Medicare” wellness visit, available within your first 12 months on Part B
  • Annual wellness visits after that
  • Flu shots and most other recommended vaccines
  • Mammograms
  • Colonoscopies and other cancer screenings
  • Diabetes and cardiovascular screenings
  • Many other screenings recommended by the U.S. Preventive Services Task Force

Paul’s Honest Take: This is one of the most underused parts of Medicare, full stop. I’ve had clients who paid for a private physical every year out of habit and never realized their annual wellness visit through Medicare was completely free. If you haven’t used your Welcome to Medicare visit or your annual wellness visit, that’s real value sitting on the table.

What’s NOT covered

  • Routine dental care — cleanings, fillings, dentures, extractions
  • Routine vision exams and eyeglasses
  • Hearing aids (though diagnostic hearing tests ordered by a doctor may be covered)
  • Long-term custodial nursing home care — help with daily living activities, as opposed to short-term skilled or medical care
  • Routine prescription drugs you pick up at a retail pharmacy — that’s Part D’s job, not Part B’s
  • Cosmetic surgery, unless medically necessary (such as reconstruction after an accident or mastectomy)
  • Most care received outside the United States, with very limited exceptions
  • Routine foot care, such as nail trimming, in the absence of a qualifying medical condition
  • Acupuncture, except for a narrow, specific chronic low back pain benefit
  • Concierge medicine fees and membership-style charges some practices add on top of standard care
  • Long-term care insurance-style services, including most home-based personal care that isn’t tied to a skilled medical need

Paul’s Honest Take: The dental and vision exclusions are the ones that surprise people most, especially since they’re such routine parts of healthcare for most adults. This is exactly why so many Medicare Advantage plans build dental, vision, and hearing benefits into their coverage — Original Medicare was simply never designed to include them, and that gap doesn’t go away on its own.

What Part B Costs in 2026

Part B has three separate cost components, and understanding all three matters:

Cost Component

2026 Amount

Standard monthly premium

$202.90

Annual deductible

$283

Coinsurance on most covered services

20%

The premium is deducted automatically from your Social Security check if you’re already collecting benefits. If you’re not yet collecting Social Security, you’ll receive a bill, typically every three months.

The deductible works differently than Part A’s — it’s a straightforward annual figure. You pay the first $283 of Medicare-approved outpatient costs each calendar year, and then Medicare’s cost-sharing kicks in.

The coinsurance is where the real risk lives. After your deductible is met, Medicare pays 80% of the Medicare-approved amount for most covered services, and you’re responsible for the remaining 20%. There is no yearly cap on this 20% under Original Medicare alone. If you have a $100,000 course of cancer treatment, your 20% share is $20,000 — unless you have a Medigap policy or Medicare Advantage plan absorbing that cost.

Paul’s Honest Take: I put this in bold because it’s genuinely the single most important number in this entire guide. That uncapped 20% is the whole reason Medigap and Medicare Advantage exist as products in the first place. Original Medicare by itself was never designed to protect you from a truly expensive year — it was designed to cover 80% of it and leave the rest to you.

IRMAA: What Higher Earners Actually Pay

If your income is above certain thresholds, you’ll pay more for Part B through the Income-Related Monthly Adjustment Amount (IRMAA) — based on your tax return from two years prior. For 2026, that means your 2024 income determines your premium tier.

2024 Income (Individual)

2024 Income (Married, Joint)

Total Part B / Month

$109,000 or less

$218,000 or less

$202.90

$109,001 – $137,000

$218,001 – $274,000

$284.10

$137,001 – $171,000

$274,001 – $342,000

$405.80

$171,001 – $205,000

$342,001 – $410,000

$527.50

$205,001 – $499,999

$410,001 – $749,999

$649.20

$500,000 and above

$750,000 and above

$689.90

At the top tier, you’re paying more than three times the standard premium. If your income has recently dropped — retirement, the loss of a spouse, or certain other life-changing events — you can appeal your IRMAA determination using Form SSA-44.

Do You Have to Enroll? And What Happens If You Don’t?

Technically, Part B is optional — Medicare won’t force you into it. But opting out without a valid alternative is genuinely risky, because of how the penalty structure works.

If you don’t sign up during your Initial Enrollment Period (the 7-month window around your 65th birthday) and you don’t have qualifying employer coverage, you’ll face a permanent 10% penalty added to your premium for every full 12-month period you went without Part B. That penalty doesn’t expire — you pay it for as long as you have Part B, which for most people means for the rest of your life.

Example: If you delayed enrollment by 24 full months without a valid exception, you’d pay an extra 20% on top of the standard $202.90 premium in 2026 — roughly $40.58 more, every month, permanently.

How Part B Works with Group Insurance

Just like Part A, whether you can safely delay Part B without penalty comes down to one specific number: how many employees your company has.

Companies with 20 or more employees: If you or your spouse are actively working and covered by a genuine group health plan, your workplace insurance is primary, and you can legally delay Part B without any penalty. When that employment or coverage eventually ends, you get an 8-month Special Enrollment Period to enroll in Part B penalty-free.

Companies with fewer than 20 employees: Medicare automatically becomes your primary insurer at 65, regardless of your employment status. You need to enroll in Part B right on schedule. If you don’t, your small employer’s plan can legally refuse to pay claims that Medicare should have covered first — potentially leaving you responsible for the full cost.

Paul’s Honest Take: I say this in nearly every guide I write, because it’s genuinely one of the costliest misunderstandings I encounter: “I have good coverage at work” and “I’m protected from Medicare’s enrollment deadlines” are two completely different statements, and whether the second one is true depends entirely on your employer’s size — not how generous the coverage feels. Confirm the actual employee count before you decide to delay anything.

Retiree Coverage Is Not the Same as Active Employer Coverage

This is a distinction that catches a genuinely large number of people off guard: the “20 or more employees” exception only applies to active employment. If you retire and your former employer offers you retiree health benefits — sometimes a genuinely good, comprehensive plan — that coverage does not create a Special Enrollment Period the way active group coverage does, and it does not exempt you from enrolling in Part B on time.

Paul’s Honest Take: I’ve seen this mistake more than once, and it’s an especially painful one because it happens to people who did everything right during their working years. Someone retires with a strong retiree health plan from a large employer, assumes it works the same way their active coverage did, and delays Part B — only to find out later that retiree coverage was never a valid reason to delay in the first place. The moment you stop actively working, that clock starts, regardless of how good your retiree plan looks on paper. If you’re retiring and keeping employer retiree benefits, treat enrolling in Part B as something to handle right on schedule, not something retiree coverage lets you postpone.

Why You Need Both Part A and Part B for Medigap or Medicare Advantage

Here’s a foundational requirement worth understanding clearly, since it shapes every other coverage decision in Medicare: you must be enrolled in both Part A and Part B before you can buy a Medigap policy or enroll in a Medicare Advantage plan. Neither product exists as a standalone substitute for Original Medicare — both are built specifically to work alongside it.

  • Medigap fills the cost-sharing gaps left by Original Medicare (Parts A and B) — it has nothing to fill in if you’re not enrolled in both parts to begin with.
  • Medicare Advantage legally must provide at least the same coverage as Parts A and B combined, which is only possible because you’re required to be enrolled in both before a Medicare Advantage carrier can enroll you.

Paul’s Honest Take: This surprises people who assume they can somehow “skip” Part B and go straight into a Medicare Advantage plan to avoid the extra premium. It doesn’t work that way — Part B enrollment, and its premium, is a prerequisite either way, whether you end up on Original Medicare with Medigap or on a Medicare Advantage plan. There’s no path through Medicare that avoids the Part B premium once you’re actually using the system.

Does Medicare Work If You’re a Veteran?

Yes — and if you have VA health benefits, understanding how the two systems relate is genuinely important, because they work differently than most people assume.

Medicare and VA benefits do not coordinate. These are two entirely separate systems that each pay only for care received within their own network. Medicare doesn’t pay for care you receive at a VA facility, and VA benefits don’t pay for care you receive from a non-VA doctor or hospital. You, the veteran, choose which system to use each time you seek care.

Here’s the critical point: having VA benefits does not exempt you from Medicare’s enrollment deadlines. VA coverage is not considered a qualifying reason to delay Part B without penalty. If you don’t enroll in Part B during your Initial Enrollment Period and you’re relying solely on VA benefits, you can still trigger the permanent late enrollment penalty.

Why the VA itself recommends enrolling in Medicare anyway:

  • It gives you access to civilian doctors and hospitals outside the VA system
  • VA healthcare funding depends on annual Congressional appropriations, which isn’t guaranteed to remain stable
  • If VA authorizes only part of your needed care at a non-VA facility, Medicare can help cover the rest
  • Having both gives you meaningfully more flexibility and security than relying on either system alone

Paul’s Honest Take: This is one of the most common misconceptions I run into with veterans specifically, and it’s an expensive one to get wrong. Good VA coverage feels like it should be enough, and it might genuinely handle most of your care — but it doesn’t protect you from the Part B enrollment clock the way employer coverage from a large company can. The VA itself actively encourages enrolling in Medicare Parts A and B for exactly this reason. If you have VA benefits and are approaching 65, this is worth a direct conversation before you assume you’re covered.

Veterans who enroll in Part B can also purchase a Medigap policy, which can be particularly valuable if you use non-VA providers regularly — though if you primarily rely on VA facilities for most of your care, the value of an added Medigap policy may be more limited, and worth weighing carefully.

How Long Does It Actually Take to Get Part B Approved?

This is one of the most practical, and most overlooked, pieces of planning — especially if you’re leaving a job after 65 and coordinating your Part B start date around the end of your employer coverage. Applying isn’t instant, and the timeline depends heavily on which enrollment window you’re using.

Enrollment Situation

Typical Processing Time

When Coverage Actually Starts

Initial Enrollment Period (around 65)

2–4 weeks, sometimes up to 6

1st of your birthday month (if applied in the 3 months before) or 1st of the month after you apply (if applied during or after your birthday month)

Special Enrollment Period (leaving employer coverage)

4–8 weeks, sometimes longer

1st of the month after your application is submitted

General Enrollment Period (Jan 1–Mar 31, missed window)

4–6 weeks

1st of the month after you apply

Why the Special Enrollment Period takes longer: applying after leaving employer coverage requires two forms, not one — Form CMS-40B (the actual Part B application) and Form CMS-L564 (Request for Employment Information), which your employer needs to complete to verify you had qualifying coverage. Social Security has to manually review both, which is exactly why this route consistently takes longer than a standard Initial Enrollment Period application.

Paul’s Honest Take: This timeline question comes up constantly with clients who are retiring or leaving a job after 65, and it deserves real attention — not just because of the penalty risk we’ve already covered, but because a slow approval can leave you with an actual gap in coverage if you time it too tightly. My standard advice: start this process at least 2 to 3 months before you need Part B to actually begin, not the week your employer coverage ends. If your former employer is slow to complete their portion of Form CMS-L564, that alone can hold up the entire application — so it’s worth following up with your HR or benefits department directly rather than assuming it’s been submitted.

Practical tips to avoid delays

  • Apply online through SSA.gov whenever possible. It’s consistently the fastest method — mailed or faxed forms are more prone to getting lost or delayed.
  • If you’re on a Special Enrollment Period, submit Form CMS-L564 alongside Form CMS-40B, not separately. They need to arrive together, and one incomplete form can stall the whole application.
  • Expect a short intake lag even with online applications. It can take several business days for an online submission to actually appear on a local Social Security agent’s screen — don’t panic if you call shortly after applying and they say they don’t see it yet.
  • Once approved, you don’t have to wait for your physical card. Your Medicare Beneficiary Identifier typically appears in your online Social Security or Medicare.gov account within a day or two of approval, and you can print a temporary card from there — the physical card generally arrives by mail within about 30 days.

Excess Charges: The Cost Almost Nobody Knows to Ask About

Here’s a detail that surprises even people who’ve been on Medicare for years: not every doctor who accepts Medicare agrees to accept Medicare’s approved amount as full payment.

Providers fall into three categories:

  • Participating providers accept Medicare assignment, meaning they agree to accept the Medicare-approved amount as payment in full. This covers the vast majority of providers — roughly 98% of doctors nationally.
  • Non-participating providers still accept Medicare patients but haven’t agreed to accept the standard rate. They can charge an excess charge of up to 15% above the Medicare-approved amount.
  • Opted-out providers have left the Medicare system entirely and can charge whatever they want under a private contract — Medicare pays nothing at all for care from these providers, except in emergencies.

How excess charges actually work: if the Medicare-approved amount for a service is $300 and you see a non-participating provider, they can legally charge up to an additional $45 (15%) on top, for a total bill of $345 — and that excess amount doesn’t count toward your Part B deductible.

Eight states currently prohibit or limit excess charges entirely: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. If you live in one of these states, you’re generally shielded from excess charges from providers within your state — though you could still face them if you receive care from a non-participating provider elsewhere.

Paul’s Honest Take: This is exactly why Medigap Plan G matters so much for people who want maximum flexibility. Plan G covers excess charges in full — Plan N does not. If you’re the kind of person who wants the freedom to see any doctor without worrying about billing surprises, that distinction is worth understanding clearly before you pick between the two. And regardless of which plan you choose, it’s always worth asking a new provider directly whether they accept Medicare assignment before your first appointment.

The HSA Rule: Part B Closes the Door Too

If you’re hoping to keep contributing to a Health Savings Account, know this clearly: enrolling in Part B — or any part of Medicare — ends your ability to make new HSA contributions. This isn’t unique to Part B; it applies the moment you enroll in Medicare in any form, including premium-free Part A.

If keeping your HSA active matters to you, the only way to legally delay both Part A and Part B is through qualifying employer coverage — which, as covered above, generally requires an employer with 20 or more employees. And because Part A enrollment can be backdated up to 6 months once you do enroll, it’s smart to stop HSA contributions 6 months before you plan to sign up for Medicare or file for Social Security, whichever comes first.

Frequently Asked Questions

Is there a cap on what I’ll pay for Part B services in a year? Not under Original Medicare alone — the 20% coinsurance has no yearly limit. A Medigap policy or Medicare Advantage plan is what actually caps your exposure.

What happens if I don’t sign up for Part B on time? You’ll generally face a permanent 10% penalty on your premium for every 12-month period you went without coverage, unless you qualify for a Special Enrollment Period through active employer coverage.

Do I need Part B if I have good coverage through a small employer? Almost certainly yes. If your employer has fewer than 20 employees, Medicare becomes your primary insurer at 65 regardless of your job coverage, and not enrolling can leave you exposed to unpaid claims and a lifelong penalty.

Do veterans need Medicare Part B if they have VA benefits? Generally, yes. Medicare and VA benefits don’t coordinate — each only pays for care within its own system — and VA coverage doesn’t exempt you from Medicare’s enrollment deadlines or penalties.

What is a Part B excess charge? An additional charge, up to 15% above the Medicare-approved amount, that a non-participating provider can legally bill you. It doesn’t count toward your deductible, and only Medigap Plan G (among current plans) covers it in full.

Can I keep contributing to my HSA if I enroll in Part B? No. Enrolling in any part of Medicare, including Part B, ends your HSA contribution eligibility going forward.

How long does it take to get approved for Part B? It depends on the enrollment window. Initial Enrollment Period applications typically process in 2–4 weeks. Special Enrollment Period applications, used when leaving employer coverage, generally take 4–8 weeks since Social Security must manually verify your prior coverage using Form CMS-L564. Start the process at least 2–3 months before you need coverage to begin, especially when coordinating around a job ending.

The Bottom Line

Part B is the half of Medicare that covers your everyday medical care — and it’s also where the real financial exposure of Original Medicare lives, thanks to that uncapped 20% coinsurance. Whether you should enroll at 65, whether you can safely delay, and how much of that exposure you’re carrying all depend on details specific to your situation: your employer’s size, your income, your VA status, and which doctors you actually see.

If you want help sorting out exactly how Part B applies to your specific circumstances — or want to understand how Medigap or Medicare Advantage could close that uncapped coinsurance gap — that’s exactly the conversation I have with clients every day, at no cost to you.

Call 631-358-5793 or visit paulbinsurance.com to set up a time to talk it through.

Paul Barrett, CMIP, is the founder of The Modern Medicare Agency, based in Melville, NY, and has spent 18+ years exclusively helping people navigate Medicare — never life insurance, never annuities, just Medicare. He’s licensed in 37 states, represents more than 40 carriers, and has personally helped over 5,000 clients choose coverage that actually fits their lives.

Figures current as of 2026 and sourced from CMS, Medicare.gov, and the Social Security Administration. Individual circumstances vary, especially around employer coverage, VA benefits, and income-based premiums — always verify your specific situation before making enrollment decisions.

Sources

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