By Bryce Brennan, MBA, CFP®, RICP®
As October arrives, many retirees are focused on healthcare decisions that can have lasting financial consequences. Medicare can feel overwhelming, but understanding the rules, coverage options, and potential costs can help you make confident decisions and avoid costly mistakes.
Whether you're approaching age 65 or recently retired, consider this your Medicare guidebook for getting started!
The Pregame: Qualifying for Medicare
Most people qualify for premium-free Part A at age 65 based on their own or a spouse's work history. Individuals under 65 may qualify due to disability or certain medical conditions, and applicants must meet U.S. citizenship or residency requirements.
Opening Kickoff: Why October Matters
Medicare's Annual Open Enrollment Period runs from October 15 through December 7. During this time, current Medicare beneficiaries can:
- Review existing coverage
- Compare plan costs and benefits
- Change Medicare Advantage plans
- Switch between Original Medicare and Medicare Advantage
- Change Part D prescription drug plans
Even if you are happy with your current coverage, it’s worth reviewing your options annually. Since premiums, provider networks, prescription options, and benefits can change each year, reviewing your coverage annually is a smart move.
Know the Team: The Parts of Medicare
Part A: The Defense
Covers inpatient hospital care, hospice services, and certain home health services. Most people pay no premium.
Most individuals qualify for Part A without paying a premium because they paid Medicare taxes during their working years.
Part B: The Offense
Covers doctor visits, outpatient care, preventive services, lab work, and medical equipment. Most beneficiaries pay a monthly premium.
Most beneficiaries pay a monthly premium for Part B. If receiving social security, you can have this cost deducted directly from your monthly benefit. Higher-income retirees may pay more due to IRMAA surcharges, which we'll discuss later.
Part D: The Prescription Play
Provides prescription drug coverage through private insurers. Even if you take few medications today, enrolling when eligible may help avoid future penalties.
Enrollment Clock: When to Get in the Game
Your Initial Enrollment Period lasts seven months:
- Three months before your 65th birthday month
- Your birthday month
- Three months after your birthday month
If you're still working and covered by a qualifying employer plan, you may be eligible for a Special Enrollment Period when that coverage ends.
Penalty Flag: Part B and D Late Enrollment
You may face a Part D penalty if you go 63 or more consecutive days without creditable prescription drug coverage after becoming eligible.
Failing to enroll in part B on time leads to a 10% premium increase for each 12-month period you were eligible but did not enroll. This penalty will last for life!
Head-to-Head Matchup: Medicare Advantage vs. Medigap
Medicare Advantage (Part C)
Combines Medicare coverage into one plan and often includes:
- Prescription drug coverage
- Dental, vision, and hearing benefits
- Wellness programs
Pros:
- Lower premiums
- Additional benefits
- Convenient all-in-one coverage
Cons:
- Network restrictions
- Prior authorization requirements
- Varying coverage by plan and location
Medigap (Medicare Supplement)
Medigap works alongside Original Medicare and helps cover deductibles, copays, and coinsurance.
It may be a good fit for retirees who:
- Want predictable healthcare costs
- Travel frequently
- Prefer broader provider access
- Want fewer network limitations
You generally cannot have both Medigap and Medicare Advantage coverage.
Halftime Review
Comparing your current coverage with available options can help ensure your plan still fits your doctors, medications, budget, and overall health needs for the year ahead.
Penalty Flag: Understanding IRMAA
Higher-income retirees may pay additional Medicare premiums due to the Income-Related Monthly Adjustment Amount (IRMAA).
For 2026, IRMAA begins when Modified Adjusted Gross Income exceeds:
- $109,000 for single filers
- $218,000 for married couples filing jointly
Large financial events such as Roth conversions, capital gains, property sales, and Required Minimum Distributions (RMDs) can increase future Medicare premiums. Because Medicare looks back two years, proactive tax planning can help manage these costs.
The Field Goal: How to Sign Up
Most people enroll through the Social Security Administration:
- Online at SSA.gov
- By phone
- Through a local Social Security office
Medicare's official Plan Finder tool at Medicare.gov is an excellent resource for comparing available options.
The Medicare Game Clock: Key Dates
Pregame Checklist: Before Turning 65
- Review employer coverage
- Assess retirement timing
- Understand enrollment deadlines
Regular Season Window: October 15 - December 7
- Annual Medicare Open Enrollment
- Review Medicare Advantage and Part D coverage annually
Second-Half Adjustment: January 1 - March 31
- Medicare Advantage Open Enrollment Period
- Opportunity to switch or leave a Medicare Advantage plan under certain circumstances
Final Whistle
Healthcare is often one of the largest expenses in retirement, and Medicare decisions can affect both your finances and access to care for years to come.
By understanding enrollment deadlines, avoiding penalties, comparing coverage options, and planning for IRMAA, retirees can make more informed healthcare decisions and potentially save thousands of dollars over time.
If you're approaching retirement, October is the perfect time to begin reviewing your Medicare strategy. Schedule your complimentary consultation today, a thoughtful review today can help ensure your healthcare coverage supports the retirement lifestyle you've worked so hard to achieve.