Medicare 101: When to Enroll, What It Covers, and What It Doesn’t

Why Medicare Planning Matters—Especially for Women Approaching Retirement

Medicare is one of the most important pieces of your retirement plan. But it’s also one of the most misunderstood.

Many near-retirees assume Medicare will cover all their healthcare needs once they turn 65. Others delay enrollment without realizing they could face steep penalties or gaps in coverage. For women—especially those managing their own finances for the first time after divorce or the death of a spouse—understanding the Medicare system is essential.

This guide walks you through the core elements of Medicare: when to enroll, what it covers (and what it doesn’t), and how to avoid the common mistakes that can cost you later.

Understanding Medicare Parts A, B, C, and D

Medicare is divided into four parts, and each plays a different role in your healthcare coverage.

Medicare Part A: Hospital Insurance

Part A covers inpatient hospital stays, skilled nursing facilities, hospice care, and some home health care. Most people don't pay a premium for Part A if they or their spouse paid

Medicare taxes for at least 10 years.

Medicare Part B: Medical Insurance

Part B covers outpatient care, doctor visits, preventive services, and some home health care. Unlike Part A, Part B comes with a monthly premium, which is adjusted based on income.

Medicare Part C: Medicare Advantage

Medicare Advantage plans are offered by private insurance companies approved by Medicare. These plans bundle Part A and Part B, and often include additional benefits like vision, dental, and prescription drug coverage. However, networks are usually limited and may require referrals.

Medicare Part D: Prescription Drug Coverage

Part D helps pay for prescription medications. Like Advantage plans, Part D is offered by private insurers, and premiums vary by plan. It’s important to evaluate the drug formulary of each plan to ensure it covers the medications you take.

Medicare Enrollment: Timing Is Everything

Your Initial Enrollment Period (IEP) begins three months before the month you turn 65 and lasts for seven months total. If you're already receiving Social Security, you’ll be automatically enrolled in Parts A and B. Otherwise, you must sign up manually.

Missed the Window?

If you don’t enroll during your IEP and aren’t covered by a qualifying employer plan, you could face lifetime penalties. For example, delaying Part B enrollment could result in a 10% premium increase for every 12-month period you were eligible but didn’t sign up.

There are also Special Enrollment Periods (SEPs) for those who lose employer coverage or face other qualifying life events.

General Enrollment Period

If you miss both your IEP and an SEP, you can enroll during the General Enrollment Period (January 1–March 31), but coverage won’t begin until July—and penalties may apply.

Supplements, Medigap, and Medicare Advantage: What's the Difference?

Once enrolled in Original Medicare (Parts A and B), you’ll need to decide how to fill the gaps.

Medigap (Supplement Plans)

Medigap policies help cover out-of-pocket costs like deductibles, copayments, and coinsurance. These are offered by private insurers and standardized in most states. You must have Parts A and B to buy a Medigap policy, and they do not include drug coverage—so you'll need a separate Part D plan.

Medicare Advantage (Part C)

An alternative to Original Medicare, Advantage plans may offer lower monthly premiums and extra services, but they often come with more restrictions and higher out-of-pocket limits. These plans usually include drug coverage, but doctor networks can be narrower.

Common Medicare Mistakes to Avoid

1. Delaying enrollment without qualifying coverage Many people wait too long to enroll, assuming their employer coverage will suffice. If that coverage doesn’t qualify, penalties will apply.

2. Assuming Medicare covers everything It doesn’t. Dental, vision, hearing aids, and long-term care are not included under Original Medicare.

3. Choosing the wrong Part D plan Not all plans cover all medications. Choosing based only on premium cost without reviewing the formulary can lead to surprise out-of-pocket expenses.

4. Not re-evaluating annually Plans and drug formularies change each year. What worked in 2024 might not be the best fit in 2025.

What Happens If You Delay or Sign Up Late?

Let’s look at two examples:

Susan, age 64 Susan plans to retire at 65 and will lose her employer coverage. She enrolls during her IEP and selects Original Medicare plus a Medigap policy and Part D plan. Her coverage starts on time, and she avoids penalties.

Linda, age 66 Linda thought she was still covered under her spouse’s employer plan, but it turns out she wasn’t. She didn’t enroll at 65 and misses her SEP. Now she must wait for the General Enrollment Period and will face permanent premium penalties on Part B and Part D.

What to Review for 2025: Changes That May Affect You

Each year, Medicare makes adjustments that can affect premiums, deductibles, and plan availability.

For 2025:

• Medicare Part B premium is projected to increase slightly.

• Part D out-of-pocket cap will be newly implemented, limiting your annual drug spending.

• Changes to Advantage plans may affect coverage networks and benefits.

• Formulary updates could mean your medications are no longer covered under your current Part D plan.

Fall Open Enrollment (October 15–December 7) is your chance to review and change your plan for 2025. Don’t let this window pass you by.

Final Thoughts

Medicare is not a one-time decision—it’s a critical part of your long-term financial and healthcare planning. Choosing the wrong path can be costly, but with thoughtful planning, you can create a strategy that fits your health needs and your budget.

If you're nearing retirement or navigating a major life change like divorce, this is the time to educate yourself and build a Medicare plan with confidence.

Need help making sense of your Medicare options? Reach out to schedule a consultation.