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The Full Picture

Medicare in depth

This page goes further than the basics: how Part D really works, what happens if you enroll late, how income affects what you pay, and — just as important — what Medicare doesn't cover. Use the jump links below to go straight to what you need.

Part D Rules Late Penalties Penalty Calculator IRMAA What's Not Covered
Prescription Drug Coverage

How Part D actually works

Part D is more layered than people expect. Here's how a typical plan year actually unfolds.

1. Deductible

You pay out of pocket first, up to your plan's deductible (no more than $615 in 2026 — many plans charge less).

2. Initial Coverage

After the deductible, you and your plan share costs — you typically pay a copay or coinsurance for each prescription.

3. Catastrophic Cap

Once your out-of-pocket spending hits the annual cap, you pay $0 for covered drugs for the rest of the year — a major recent improvement.

What counts as "creditable" drug coverage?

Coverage that's expected to pay, on average, at least as much as standard Medicare drug coverage — most employer plans qualify, but not all. If you have employer coverage when you turn 65, ask your HR department directly whether it's creditable; they're required to tell you in writing each year.

Extra Help (Low-Income Subsidy)

If your income and resources are limited, the Extra Help program can lower or eliminate your Part D premium, deductible, and copays — and if you qualify, you're also protected from the late enrollment penalty.

Timing Matters — A Lot

Late enrollment penalties

Missing your enrollment window without a qualifying exception doesn't just mean a one-time fee — for Part B and Part D, it means a permanent addition to your premium for as long as you have that coverage.

Part B late enrollment penalty

Adds 10% to the standard Part B premium for every full 12-month period you went without Part B (or other creditable coverage, like an active large-employer plan) after becoming eligible.

Example: wait 2 full years → pay 20% more, permanently. In 2026, that's roughly $243.50/month instead of $202.90.

Part D late enrollment penalty

Adds 1% of the national base beneficiary premium ($38.99 in 2026) for every full month you went without creditable drug coverage, once 63+ days have passed.

Example: go 14 months without coverage → pay roughly $5.50/month extra, permanently, on top of your plan's premium.

The good news: both penalties are avoidable. Enrolling during your Initial Enrollment Period, or having genuinely creditable coverage (like an active employer plan) in the meantime, means you'll never owe either penalty. If you're not sure whether your current coverage is creditable, that's exactly the kind of question worth asking before a deadline passes — not after.
See Your Estimate

Late enrollment penalty calculator

Get a rough estimate of what a Part B or Part D late enrollment penalty could look like, based on 2026 figures.

Only count full 12-month periods after your Initial Enrollment Period ended.

Only counts once you've gone 63+ continuous days without creditable coverage.

This calculator gives a rough estimate using standard 2026 figures published by Medicare.gov and CMS. It doesn't account for special enrollment periods, Extra Help eligibility, or other exceptions that could mean you owe no penalty at all. Your actual penalty is determined by the Social Security Administration — if you've received a penalty notice and think it's wrong, you can appeal it. Reach out if you'd like help figuring out your specific situation.

Income-Related Monthly Adjustment Amount

How income affects your Medicare premiums (IRMAA)

If your income is above certain thresholds, you'll pay more than the standard premium for both Part B and Part D — regardless of which plan you choose. IRMAA is based on your tax return from two years earlier (2026 premiums use your 2024 income), and it's a cliff, not a gradual scale: $1 over a threshold triggers the entire next tier.

2026 Part B IRMAA brackets

Which column applies to you? Use the Individual column if you file taxes as single — including clients who are divorced, widowed, or never married — or as head of household. Use the Joint column if you're married filing jointly. (Married but filing separately? See the special table below — the rules are different, and harsher.)

Individual MAGIJoint MAGIMonthly IRMAATotal Part B Premium
$109,000 or less$218,000 or less$0.00$202.90
$109,001 – $137,000$218,001 – $274,000$81.20$284.10
$137,001 – $171,000$274,001 – $342,000$202.90$405.80
$171,001 – $205,000$342,001 – $410,000$324.60$527.50
$205,001 – $499,999$410,001 – $749,999$446.30$649.20
$500,000 or more$750,000 or more$487.00$689.90

Source: CMS, "2026 Medicare Parts A & B Premiums and Deductibles" (released Nov 14, 2025).

2026 Part D IRMAA brackets

Part D IRMAA uses the same income brackets as Part B, but the surcharge is a separate, smaller dollar amount added on top of whatever your Part D plan's own premium is.

Individual MAGIJoint MAGIMonthly Part D IRMAA
$109,000 or less$218,000 or less$0.00
$109,001 – $137,000$218,001 – $274,000$14.50
$137,001 – $171,000$274,001 – $342,000$37.50
$171,001 – $205,000$342,001 – $410,000$60.40
$205,001 – $499,999$410,001 – $749,999$83.30
$500,000 or more$750,000 or more$91.00

Part D IRMAA is paid directly to Medicare (via Social Security deduction or a separate bill) — not to your Part D plan — even if a third party pays your plan premium for you.

Married filing separately: a different — and harsher — structure

If you're married, lived with your spouse at any point during the tax year, and file separately — a common situation during a separation or divorce in progress — IRMAA doesn't use the graduated tiers above. Instead, it jumps straight from no surcharge to the second-highest tier the moment your income crosses $109,000. There is no middle ground.

MAGI (married filing separately)Monthly Part B IRMAATotal Part B PremiumMonthly Part D IRMAA
$109,000 or less$0.00$202.90$0.00
$109,001 – $390,999$446.30$649.20$83.30
$391,000 or more$487.00$689.90$91.00

Important nuance: this harsher structure only applies if you lived with your spouse at some point during the year. If you're married filing separately but lived apart from your spouse for the entire tax year, Social Security treats you under the Individual brackets above instead. And if you've recently divorced, that counts as a life-changing event for the SSA-44 appeal described below.

Income dropped? Form SSA-44 can fix your IRMAA now

Because IRMAA looks at your tax return from two years ago, it can charge you high-income premiums long after your income has fallen. You don't have to wait for the lookback to catch up. If your income dropped because of one of the eight official life-changing events, you can file Form SSA-44 and ask Social Security to use your current, lower income instead.

The 8 qualifying life-changing events

  • Work stoppage — you retired or otherwise stopped working
  • Work reduction — you cut back your hours or income
  • Divorce or annulment
  • Death of your spouse
  • Marriage
  • Loss of income-producing property — due to a disaster, fraud, or other events beyond your control
  • Loss of pension income — your pension plan stopped or was reduced
  • Employer settlement payment — a one-time payment from an employer's bankruptcy or reorganization inflated a past year's income

How to file

Complete Form SSA-44 (available at ssa.gov), attach proof of the event — such as a divorce decree, death certificate, or a letter from your former employer — and an estimate of your new, lower income. You can mail it to, or bring it into, your local Social Security office.

If the request is approved, Social Security recalculates your Part B and Part D IRMAA using the lower income — which can mean going from a surcharge tier back to the standard premium entirely.

Separately, if you believe the income figure Social Security used is simply wrong — an amended return, an IRS error — you can appeal any IRMAA determination within 60 days of the notice.

Know The Limits

What Medicare covers — and what it doesn't

Original Medicare covers a lot, but it has real, well-known gaps. Knowing them in advance is the whole point of supplemental coverage.

What Medicare generally covers

  • Hospital inpatient stays (Part A) — surgery, pneumonia, heart attack, stroke. Covers semi-private room, meals, nursing care, and drugs administered during your stay.
  • Doctor visits & outpatient services (Part B) — primary care, specialist visits, lab tests, X-rays, MRI and CT scans, outpatient surgery, second opinions.
  • Preventive screenings (often at no cost) — annual wellness visit, colonoscopy, mammogram, bone density scan, lung cancer screening, cardiovascular risk screenings, depression screening, flu, COVID, and pneumonia vaccines.
  • Skilled nursing facility (SNF) — up to 100 days per benefit period after a qualifying 3-day hospital stay. Days 1–20 are fully covered; days 21–100 require a daily coinsurance ($217/day in 2026). Day 101 and beyond: not covered.
  • Home health care — skilled nursing visits, physical therapy, occupational therapy, and speech-language pathology at home, when you are homebound and a doctor certifies the medical necessity.
  • Hospice care — when a doctor certifies a terminal illness with a 6-month prognosis. Covers pain and symptom management, nursing, social work, chaplaincy, and family counseling. Usually provided at home.
  • Durable medical equipment (DME) — wheelchairs, walkers, hospital beds, oxygen equipment, CPAP machines, blood glucose monitors, prosthetics and orthotics, continuous glucose monitors.
  • Mental health services — outpatient therapy with a psychiatrist, psychologist, or clinical social worker; partial hospitalization programs; inpatient psychiatric care (up to 190 lifetime days in a freestanding psychiatric facility).
  • Cardiovascular care — EKG, echocardiogram, cardiac catheterization, cardiac rehabilitation programs following a qualifying cardiac event, pacemaker implantation, bypass surgery.
  • Cancer treatment — chemotherapy, radiation therapy, immunotherapy and other drugs infused in a clinical setting (Part B), and many oral cancer medications (Part D). Surgical cancer treatment covered under Part A (inpatient) or Part B (outpatient).
  • Diabetes management — blood glucose monitors and testing supplies, insulin pumps and associated insulin (Part B), diabetes self-management training, nutrition therapy for diabetes and kidney disease.
  • Kidney disease & dialysis — in-center and home dialysis, related lab work, anti-rejection drugs, and kidney transplant surgery (including donor evaluation and surgery costs).
  • Ambulance services — ground and air ambulance when other transportation would endanger health. Note: Medicare may not cover ambulance transport if it deems another method was medically appropriate.
  • Substance use disorder treatment — inpatient and outpatient treatment for alcohol and drug dependency, including counseling and medications used in treatment (e.g., methadone for opioid use disorder).

What Medicare generally does NOT cover

  • Routine dental care — cleanings, exams, fillings, extractions, root canals, dentures, bridges, and implants. Exception: dental care directly required by a covered medical procedure (e.g., a tooth extraction required before heart surgery).
  • Routine vision & eyeglasses — annual eye exams for glasses or contacts, corrective lenses, contact lenses. Exception: one pair of standard glasses or contacts after cataract surgery with an intraocular lens implant.
  • Hearing aids & fittings — hearing aids of any kind, hearing aid batteries, and routine audiological evaluations for hearing aid fittings. Medicare covers a diagnostic hearing exam only if a physician orders it to evaluate a medical condition.
  • Long-term custodial care — ongoing help with activities of daily living (bathing, dressing, eating, toileting) in a nursing facility or at home. This is Medicare's single largest gap. A nursing home costs $12,000–$18,000+/month in California. Medi-Cal can cover this for eligible lower-income seniors.
  • Care outside the United States — Medicare does not cover health care received abroad in most circumstances. Some Medigap plans (Plans C, D, F, G, M, N) cover 80% of emergency care abroad up to a $50,000 lifetime limit after a $250 deductible.
  • Cosmetic surgery — any procedure done solely to improve appearance. Exception: reconstructive surgery after an accident, injury, or mastectomy may be covered.
  • Routine foot care — toenail trimming, callus or corn removal, and routine podiatry visits are generally excluded. Exception: foot exams and nail care for people with diabetes-related nerve damage (peripheral neuropathy) or circulatory disease.
  • Most chiropractic care — Medicare only covers manual spinal manipulation to correct subluxation. X-rays ordered by a chiropractor, massage therapy, and other chiropractic services are not covered.
  • Acupuncture — covered only for chronic low back pain (up to 20 sessions per year: 12 initial + 8 additional if demonstrating improvement). Not covered for any other condition.
  • Naturopathic & alternative medicine — naturopathic doctors, homeopathic treatments, herbal remedies, therapeutic massage for general wellness, and most other alternative or complementary medicine are not covered.
  • Concierge doctor fees — monthly retainer fees paid directly to a concierge or direct primary care physician are not reimbursable by Medicare, even if the services themselves are otherwise covered.
  • Traditional physical exam — Medicare covers an Annual Wellness Visit focused on preventive planning, but not a comprehensive head-to-toe physical with routine bloodwork. Specific labs must be ordered separately as medically necessary.
  • Weight loss programs & gym memberships — weight loss programs and gym memberships are not covered under Original Medicare. Note: many Medicare Advantage plans do include a fitness benefit (e.g., SilverSneakers).
  • Private nursing & personal attendants — private-duty nurses or personal care attendants in a hospital, nursing home, or at home are not covered, even when a patient needs more hands-on care than standard staff provides.
  • Non-emergency medical transport — rides to doctor appointments, dialysis, or other scheduled care are not covered unless the patient is bedridden and requires medical monitoring during transport.
Many of these gaps — dental, vision, hearing — are exactly what Medicare Advantage plans often add back in as extra benefits, and why some people pair Original Medicare with a Medigap plan plus separate dental/vision coverage instead. Coverage specifics vary by plan, so it's worth confirming what's included before you enroll.

Want help applying this to your situation?

IRMAA, penalties, and coverage gaps all interact differently depending on your income, your health needs, and your timeline. We're happy to walk through it with you.

Contact Us

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