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Medicare Costs 2026: What Beneficiaries and Agents Need to Know

As Medicare undergoes significant shifts in 2026, beneficiaries will face new premiums, deductibles, and cost-sharing structures. These costs impact how they access and budget for care. For agents, understanding these changes is essential for guiding clients through enrollment decisions and helping them prepare for the year ahead. Here’s a breakdown of important Medicare cost updates for 2026 and what they mean for the people you serve.

Higher Costs Driven by Utilization and Program Changes

Several factors are driving cost increases across Medicare Part A and Part B in 2026:

• Greater healthcare utilization: Hospital and outpatient visits continue to rise.
• Higher reimbursement requirements: Centers for Medicare & Medicaid Services (CMS) is adjusting payments to hospitals, physicians, and Medicare Advantage plans due to inflation and increased care complexity.
• Changes in Medicare Advantage rules: Policy shifts for 2026; including tighter oversight and reduced supplemental benefit flexibility, are indirectly affecting Original Medicare spending trends.

While Medicare costs rise most years, 2026 brings a more noticeable increase driven by combined economic and regulatory pressures.

Medicare Part A Costs for 2026

Most beneficiaries still receive Part A with no monthly premium (if they qualify via work-history) but other Part A cost-sharing amounts are increasing:

• Inpatient hospital deductible (Part A): For 2026 the deductible for a benefit period is $1,736, up from $1,676 in 2025.
• Daily coinsurance for days 61–90 in hospital: $434 per day in 2026, up from $419.
• Lifetime reserve-day coinsurance: $868 per day in 2026.
• Skilled Nursing Facility (SNF) coinsurance (days 21-100): $217 per day in 2026, up from $209.50.

Agents should remind clients that even if Part A premium is “free,” they can still face significant out-of-pocket exposure via hospital stays and extended care—making Medigap or a well-selected Medicare Advantage plan even more important.

Medicare Part B Costs for 2026

Part B sees some of the most direct increases:

• Standard monthly premium (Part B): $202.90 per month in 2026 (up from $185.00 in 2025).
• Annual deductible (Part B): $283 in 2026 (up from $257 in 2025).
• Income-related monthly adjustment amounts (IRMAA): Beneficiaries with higher incomes will pay more than the standard premium; for 2026 the standard premium applies to individuals with a modified adjusted gross income (MAGI) up to $109,000 (or $218,000 for joint filers)

For agents, breaking down these numbers early in AEP and during SEP conversations helps clients avoid sticker-shock and budget accurately.

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Prescription Drug Costs

• The annual deductible for the standard Part D benefit in 2026 is $615.
• Beneficiaries will pay cost-sharing (typically coinsurance) during the initial coverage phase until their true out-of-pocket (TrOOP) drug spending hits $2,100 for 2026. At that point, the plan pays 100% of covered drugs for the rest of the year.
• All 2026 Part D plans are required to include this $2,100 cap.
• For beneficiaries with very high drug costs, this cap provides meaningful protection, limiting their maximum annual out-of-pocket prescription drug expense (excluding premiums).

Learn more about the drug cap – watch a YouTube video

Medicare costs are rising in 2026; with thoughtful planning, beneficiaries and their agents can manage these changes with confidence. By staying informed and proactively communicating updates, agents stand out as trusted, knowledgeable guides.

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Medicare General Enrollment Period – Who Can Use It

Medicare offers several enrollment windows, and knowing which one applies to your situation is essential for avoiding coverage gaps and late-enrollment penalties. One key enrollment period; especially for those who missed their initial opportunity, is the Medicare General Enrollment Period (GEP).

For those who didn’t sign up for Medicare when first eligible, the GEP may provide a second chance to enroll. Let’s break down what the GEP is, who qualifies to use it, and what to expect.

Understanding the Medicare General Enrollment Period

The Medicare General Enrollment Period runs every year from January 1 to March 31. It exists to help individuals who:

• Did not enroll in Medicare Part A and/or Part B during their Initial Enrollment Period (IEP), and
• Do not qualify for a Special Enrollment Period (SEP)

During the GEP, eligible individuals can sign up for Medicare Part A (if they have to pay a premium for it), Medicare Part B, or both.

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Who Can Use the GEP

You may be able to use the Medicare General Enrollment Period if:

1. You turned 65 and missed your Initial Enrollment Period
2. You left employer coverage and did not enroll during a Special Enrollment Period
3. You declined Medicare when first eligible and later changed your mind
4. You were not automatically enrolled and never completed enrollment

You cannot use the GEP if

You already enrolled or declined Medicare during your IEP or SEP
You currently qualify or applied for a Special Enrollment Period (for example, due to loss of employer coverage)

When Coverage Begins After Enrolling

Unlike past years when coverage began in July, Medicare’s updated rules mean that coverage starts the first day of the month after you enroll during the GEP.

For example:

• Enroll in January – Coverage starts February 1
• Enroll in March – Coverage starts April 1

What About Late-Enrollment Penalties

If you’re enrolling during the GEP because you didn’t qualify for a Special Enrollment Period, be aware that late-enrollment penalties may apply:

• Part B penalty: 10% increase for each full 12-month period you didn’t enroll when eligible
• Part A penalty: Applies if you’re required to pay a premium and delayed enrollment

These penalties typicallylast for a lifetime, so enrolling as soon as you’re eligible; or using a SEP if qualified, is critical.

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Can You Enroll in Medicare Advantage or Part D After the GEP

Yes. After enrolling in Medicare during the GEP, you have a Medicare Advantage and Part D enrollment window from April 1 to June 30 each year.

During this time, you can:

• Join a Medicare Advantage (Part C) plan
• Enroll in a standalone Part D prescription drug plan

Missing your Initial Enrollment Period doesn’t mean you’re out of options. The Medicare General Enrollment Period offers an important second chance to gain coverage, but acting promptly is key.

If you’re unsure whether you qualify for the GEP or a Special Enrollment Period, consider speaking with a licensed Medicare agent who can help you understand your enrollment options and avoid unnecessary penalties or coverage delays.

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Canceling Medicare Part B – What You Need to Know

Medicare Part B helps cover doctor visits, outpatient services, preventive care, and durable medical equipment. It’s a cornerstone of healthcare for many older adults. Although, there are some situations when cancelling Medicare Part B is the best option for you

Whether due to employer coverage, cost concerns, or personal circumstances, canceling Part B is a decision that needs careful consideration. Here’s what you should know before making the move.

Why Someone Might Cancel Part B

Most people keep Part B once they enroll, but in certain situations, canceling may make sense, such as:

• Returning to Employer Coverage
  If you or your spouse returns to work and gains coverage through a credible employer health plan, you may choose to cancel Part B to avoid paying the monthly premium.
• Cost Concerns
  Individuals on a fixed budget may reconsider Part B due to premium costs. However, this should be carefully weighed against healthcare needs.
• VA Benefits Only
  Some veterans rely solely on VA benefits and opt to drop Part B, though this comes with some risk if VA access is delayed or preferences change later.

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How to Cancel Medicare Part B

Canceling Part B isn’t as simple as clicking a button online. The Social Security Administration requires a signed request, and often a Form CMS-1763 must be completed. Typically, you will need to:

1. Contact Social Security by phone or visit your local office to request cancellation.
2. Complete Form CMS-1763 in person or by phone with a Social Security representative.
3. Confirm your disenrollment once processed.

This extra step is intentional; Medicare wants to be sure beneficiaries understand the consequences before dropping coverage.

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Important Considerations Before Canceling

Canceling Part B can have long-term implications. Here are key points to consider:

• You May Pay a Late Enrollment Penalty Later
  If you cancel and don’t have other credible coverage (like large-group employer insurance), you may face a permanent surcharge if you re-enroll later.
• Limited Re-Enrollment Windows
  You can’t re-enroll anytime. Most people must wait for the General Enrollment Period (January 1 – March 31), with coverage beginning July 1; potentially leaving gaps.
• Future Coverage Access
  If your health needs change unexpectedly, getting back into Medicare Part B isn’t immediate.
• Medigap Implications
  Canceling Part B can impact your ability to retain or buy a Medicare Supplement plan, since Part B is required to maintain Medigap coverage.

When Not to Cancel Part B

Avoid canceling Medicare Part B if:

You do not have other credible employer-based coverage
Your VA benefits are your only backup and you want broader provider access
You plan to enroll in a Medicare Advantage or Medigap plan; both require Part B

If you’re unsure, speak with a licensed Medicare agent before making changes.

Canceling Medicare Part B is possible, but it’s not a decision to take lightly. With potential penalties, waiting periods, and the importance of ongoing medical access, it’s essential to make sure you have another qualifying form of coverage in place first.

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If your circumstances have changed and you’re considering this step, be sure to talk with a Medicare expert who can help you understand the rules and avoid costly gaps in coverage.

Understanding Coordinated Care: How It Improves Health

When it comes to your health, it’s not uncommon to see several doctors, specialists, or therapists over time. But have you ever wondered who’s making sure everyone is on the same page about your care? That’s where understanding coordinated care comes in. This is an approach designed to keep healthcare connected, organized, and focused on the patient as a whole.

What Is Coordinated Care

Coordinated care is a healthcare model that ensures all members of the care team; from primary care providers to specialists, hospitals, and even pharmacists, work together to manage overall health. The goal is simple: to deliver high-quality care that meets healthcare needs while reducing confusion, delays, and unnecessary costs.

Instead of treating each health concern in separately, coordinated care looks at your entire health picture. It’s a team-based, patient-centered approach that emphasizes communication and collaboration across all your healthcare providers.

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How Coordinated Care Works

In a coordinated care system, one provider (often your primary care physician or a dedicated care manager) takes the lead in managing your treatment plan. This person acts as your main point of contact and ensures that:

• Providers share test results and medical records to forma treatment plan
• Treatments don’t overlap or conflict
• You understand your medications and next steps
• Your transition between care settings; such as from hospital to home, goes smoothly

This kind of teamwork helps prevent medical errors, unnecessary repeat tests, and medication mix-ups that can happen when care is fragmented.

Examples

• A person living with diabetes might see a primary care doctor, an endocrinologist, and a nutritionist. In coordinated care, these professionals communicate regularly to align medications, diet recommendations, and follow-up visits.
• After a hospital discharge, a care coordinator might help schedule follow-up appointments, review discharge instructions, and ensure the patient fills their prescriptions; reducing the chance of readmission.
• Many Medicare Advantage and Accountable Care Organizations (ACOs) use coordinated care models to deliver more efficient and effective care for members.

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Why Coordinated Care Matters

Coordinated care isn’t just about organization; it’s about better outcomes. When providers share information and work together, you benefit from:

• Improved overall health
• Fewer hospital visits
• Lower out-of-pocket costs
• Greater satisfaction with your care

Most importantly, it ensures that care reflects your personal goals, preferences, and lifestyle because no one’s health journey looks the same.

Coordinated care is about putting the patient back at the center of the healthcare experience. By connecting the dots between your doctors, specialists, and support services, coordinated care leads to smarter, safer, and more compassionate healthcare.

Whether you’re managing a chronic condition or just want a smoother healthcare experience, coordinated care helps ensure that every part of your health story fits together the way it should.

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Medicare Part B Costs 2026

Medicare Part B helps cover medically necessary outpatient services, doctor visits, preventive services, medical equipment, and more. Because like many aspects of health care, its costs change annually, We will discuss the Medicare Part B costs 2026. beneficiaries and future enrollees need to know what’s ahead.

Below, we explore the projected premiums, deductibles, income-based surcharges (IRMAA), and strategies for planning.

What’s Covered by Part B & Basic Costs

Before diving into 2026, here’s a quick recap of how Part B costs typically work:

• You pay a monthly premium for Part B (unless you qualify for assistance).
• You also pay a yearly deductible before Medicare pays (for most services).
• After meeting the deductible, Medicare generally covers 80% of approved costs for covered outpatient services; you’re responsible for the remaining 20% coinsurance (unless another plan helps).
• If your income is above certain thresholds, you may pay an extra surcharge (IRMAA).
• Costs can vary based on where you live, your coverage options (like Medigap or Medicare Advantage), and your income.

These rules remain consistent, even as dollar amounts shift over time.

Projected Part B Premium in 2026

According to the Medicare Trustees’ projections and other financial analysts, the standard Part B monthly premium is expected to rise from $185 in 2025 to $206.50 in 2026 an increase of $21.50, or roughly 11.6%.

That jump would be the largest single-year dollar increase in recent years.

It’s crucial to note: this “standard” premium applies to beneficiaries without additional income-based surcharges (i.e. those whose incomes fall under the IRMAA thresholds). Those with higher incomes will pay more.

Expected Part B Deductible in 2026

While the exact deductible for 2026 will not be finalized until closer to year-end 2025, current projections suggest it may rise from $257 in 2025 to $288 in 2026.

That would be a roughly 12% increase in the amount beneficiaries pay out of pocket before Medicare starts covering your outpatient services.

Some Medigap (supplemental) plans cover the deductible; others require you to pay it yourself, so an increase could matter more to those on certain Medigap plans.

Income-Related Monthly Adjustment Amount (IRMAA) for 2026

One of the most significant cost levers in Medicare is the IRMAA surcharge: higher-income beneficiaries pay extra on top of the base premium. Here’s what’s projected for 2026:

• The 2026 IRMAA brackets and surcharge amounts are based on modified adjusted gross income (MAGI) from your 2024 tax return.
• The income thresholds (for moving among surcharge tiers) are expected to be indexed upward (adjusted for inflation) for 2026.
• The average surcharge increases for Part B are projected to be modest; around 1.04%.

Because of IRMAA, two people in the same city with different incomes might pay very different Part B amounts.

Why Are Costs Rising

Several forces contribute to rising Medicare Part B costs:

1. Medical inflation and utilization – Outpatient services, physician-administered drugs, diagnostics, and usage of health services often rise faster than general inflation.
2. Aging population / higher demand – As more retirees enter Medicare and health care needs grow, the burden on the system increases.
3. Cost shifting – Higher-income beneficiaries absorb more of the cost via IRMAA, but base premiums still have to cover a portion of system-wide costs.
4. Policy adjustments & fund dynamics – Adjustments to how much premiums are allowed to cover, budget pressures, and funding decisions all play a role.
5. Legislative changes – New laws affecting drug pricing, Medicare rules, and benefit design indirectly affect Part B costs over time.

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What It Means for Beneficiaries

• Budget impact: That extra $21.50 per month may absorb a significant chunk of any Social Security cost-of-living adjustment (COLA). Indeed, projections show much of retirees’ COLA gains may be eaten by higher health costs.
• Planning ahead: If your income is near an IRMAA threshold, small changes (e.g. capital gains, extra work income, withdrawals) could push you into a higher bracket.
• Review your coverage: Supplemental (Medigap) or Medicare Advantage plans may mitigate some out-of-pocket costs. If your Medigap plan covers the Part B deductible, the increase matters more.
• Appeal or exemption: If your income decreases substantially due to life events (e.g. retirement, widowhood), you may be able to appeal IRMAA adjustments.
• Stay informed: Final Medicare pricing is announced in late 2025. Propose your budget accordingly but expect adjustments.

Tips to Manage the Cost Increase

1. Estimate your 2024 MAGI now — knowing whether you might cross an IRMAA threshold will help with tax planning or withdrawals.
2. Delay or stagger income where possible — if legally and financially feasible, deferring income from 2024 may help you stay lower in the IRMAA tiers.
3. Choose the right supplemental plan — some Medigap policies cover the Part B deductible or reduce your coinsurance burden.
4. Stay within the initial enrollment windows — avoid late enrollment penalties, which add to cost burdens.
5. Appeal IRMAA where applicable — if you experience life-changing events, you may qualify for exceptions.
6. Watch your investments and gains — high capital gains or distributions in 2024 could unexpectedly push your MAGI upward.

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Bottom Line

Based on current projections:

• The standard Part B premium in 2026 may reach $206.50 per month, up from $185 in 2025.
• The deductible is expected to rise to about $288.
• Income-based surcharges (IRMAA) may add considerably more for higher earners.
• The increase is sizable and could erode a portion of any Social Security increase.
• Planning ahead; particularly regarding your 2024 income, can help reduce the surprise.

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2026 Medicare Part B Costs: What to Expect

Medicare beneficiaries should prepare for higher Medicare Part B costs in 2026. Medicare Part B covers outpatient care such as doctor visits, lab work, preventive screenings, and durable medical equipment. While the official 2026 numbers will be officially released later in 2025, projections show some of the steepest increases in recent years for 2026 Medicare Part B costs.

Projected Premium & Deductible

• The 2025 standard Part B premium is $185/month. Estimates suggest it could rise to about $206.50/month in 2026; an increase of more than 11%.
• The Part B deductible, currently $257, may increase to around $288. After meeting the deductible, beneficiaries generally pay 20% of Medicare-approved amounts for most services.

Income-Related Surcharges (IRMAA)

Higher-income beneficiaries pay more through the Income-Related Monthly Adjustment Amount (IRMAA). These surcharges are based on tax returns from two years prior (2024 income for 2026 premiums). Depending on income, premiums could rise from the base $206.50 up to more than $700 per month. Beneficiaries experiencing major life changes such as retirement can appeal their IRMAA through Social Security.

Click here to watch our YouTube video on Medicare Part B IRMA and IEP, SEP rules

Why Costs Are Rising

Several factors drive these increases:

• Rising healthcare costs and higher use of outpatient services
• The aging U.S. population requiring more care
• Inflation adjustments to both premiums and income brackets

Preparing for 2026

• Budget ahead using the projected $206.50 premium and higher deductible.
• Consider supplemental coverage. Medigap policies and Medicare Advantage plans may reduce out-of-pocket costs.
• Manage income carefully. Since IRMAA is tied to taxable income, strategies such as Roth conversions or adjusting withdrawals may help avoid higher surcharges.
• Stay informed. CMS will announce final 2026 premiums and deductibles in late 2025, so review your plan options during Medicare’s open enrollment period.

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Final Thoughts

If these projections hold, 2026 Medicare Part B costs will rise significantly, with some retirees seeing most of their Social Security COLA consumed by the higher premium. The good news is that planning now; whether through financial adjustments or reviewing Medicare coverage, can help soften the impact.

Medicare and Dental Coverage: What You Need to Know

When people think of Medicare, they often assume it covers all their healthcare need; including dental. Unfortunately, that’s not the case. Original Medicare (Parts A and B) does not cover most routine dental care. This can come as a surprise to new Medicare beneficiaries, and as an agent, it’s important to help clients understand Medicare and dental coverage.

What Original Medicare Covers

Original Medicare only covers dental care in very limited situations; usually when it is part of a hospital stay or a medically necessary procedure. For example:

• Jaw reconstruction after an accident.
• Tooth extractions needed before certain surgeries, such as heart valve replacement.
• Oral exams done in the hospital before a covered procedure.

Routine services like cleanings, fillings, dentures, or root canals are not covered.

Why Dental Coverage Matters

Oral health is closely tied to overall health. Poor dental health can contribute to heart disease, diabetes complications, and infections; all of which are major concerns for Medicare-aged clients. Helping your clients plan for dental costs can protect both their health and their wallets.

Options for Dental Coverage

Here are the most common ways beneficiaries can get dental coverage:

1. Medicare Advantage Plans (Part C)
   Many Medicare Advantage plans include dental benefits. Coverage can range from basic preventive care (cleanings, x-rays) to more comprehensive services like crowns, root canals, and dentures. Make sure to compare networks, coverage limits, and annual maximums.
2. Stand-Alone Dental Insurance Plans
   These plans are separate from Medicare and can offer flexible options. Beneficiaries can choose plans based on coverage needs and budget.
3. Discount Dental Plans
   Not insurance, but these plans provide negotiated discounts with participating dentists. They can be a low-cost option for those who only need occasional care.
4. Paying Out-of-Pocket
   Some clients may choose to budget for routine care rather than purchase coverage. This may work for those with minimal dental needs, but it carries financial risk if major dental work is required.

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Tips for Agents

• Ask about oral health needs during your fact-finding process. This helps you recommend plans that fit your clients’ situation.
• Compare annual maximums carefully — dental coverage is often capped between $1,000–$2,000 per year.
• Educate clients about timing — enrolling in dental coverage early can help them avoid waiting periods for major services.

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Medicare beneficiaries need to know that Original Medicare will not take care of their routine dental needs. By helping them understand their options Medicare Advantage plans, stand-alone dental insurance, or discount plans; you position yourself as a trusted advisor and help them maintain both their oral and overall health.

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Medicare Costs for 2026 – What Beneficiaries Need to Know

Each year, Medicare updates the premiums, deductibles, and coinsurance amounts for Parts A and B. These changes can have a significant effect on your budget; especially if you are living on a fixed income. Below we go over the projected Medicare costs for 2026. We have included a brief look at Part D and the high-deductible Medigap option.

Medicare Part A Costs for 2026

Medicare Part A covers inpatient hospital care, skilled nursing facility care, hospice, and some home health services. Most people do not pay a Part A premium, but you are still responsible for deductibles and coinsurance amounts.

• Part A deductible (per benefit period): Projected to rise from $1,676 in 2025 to about $1,716 in 2026.
• Hospital coinsurance (days 61–90): Expected to increase from $419/day to around $429/day.
• Lifetime reserve days (beyond day 90): Rising from $838/day to about $858/day.
• Skilled Nursing Facility coinsurance (days 21–100): Expected to increase to about $214.50/day.

Since the Part A deductible applies per benefit period, you could pay it more than once in a year if you have multiple hospital stays separated by 60+ days.

Medicare Part B Costs for 2026

Part B covers outpatient services, doctor visits, preventive care, and durable medical equipment.

• Standard Part B premium: Expected to increase from $185/month in 2025 to around $206.50/month in 2026.
• Part B annual deductible: Projected to rise from $257 to about $288 in 2026.

After you meet your Part B deductible, Medicare generally covers 80% of approved charges, leaving you responsible for the remaining 20% unless you have supplemental coverage.

Part D Prescription Drug Costs (Quick Note)

Even though Part D is separate from Parts A & B, it’s worth noting that the maximum Part D deductible is expected to increase from $590 in 2025 to $615 in 2026. There will also be a new out-of-pocket cap of $2,100 for covered drugs (it was $2,00 in 2025), which helps those with high prescription costs.

High-Deductible Medigap (HDG) Plans – A Quick Overview

For those who purchase a high-deductible Medigap plan (Plan G or F), the annual deductible must be met before the plan starts paying for costs that Original Medicare doesn’t cover.

• The 2025 high-deductible amount is $2,870.
• The 2026 amount has not yet been finalized but is expected to rise slightly in line with medical inflation.

These plans often have lower monthly premiums, making them attractive for healthier beneficiaries who expect lower healthcare usage, but you’ll need to budget for that large deductible in case of an unexpected illness or hospitalization.

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Why This Matters

The projected increases in Part B premiums and deductibles could take a big bite out of Social Security cost-of-living adjustments. Planning ahead helps you avoid surprises.

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Here’s what clients should do:

• Budget for higher premiums and deductibles.
• Review supplemental coverage to ensure it still meets your needs and budget.
• Compare Part D plans during the Annual Enrollment Period (AEP) to find one that best covers medications at the lowest cost.
• Stay informed—CMS will finalize these numbers in Fall 2025, so check back for updates.

Using HSAs with Medicare: What Beneficiaries and Agents Need to Know

Health Savings Accounts (HSAs) are a valuable tool for people with high-deductible health plans (HDHPs), allowing them to set aside pre-tax dollars for qualified medical expenses. However, once Medicare enters the picture, the rules change. For Medicare beneficiaries and the agents who guide them, it’s important to understand how using HSAs with Medicare works. There are important changes when Medicare begins, so educating your clients help them use those funds wisely.

Can You Contribute to an HSA While on Medicare

The short answer: no.

Once someone enrolls in any part of Medicare (Part A, Part B, or both), they are no longer eligible to make contributions to an HSA. Because Medicare is not considered a high deductible health plan, The IRS prohibits contributions after Medicare enrollment.

Key timing note:

• Many people are automatically enrolled in Medicare Part A at age 65 if they are already taking Social Security benefits. This means their HSA contribution eligibility ends immediately.
• If a person delays Medicare enrollment (and Social Security benefits) while still working and covered by an employer-sponsored HDHP, they can continue contributing to their HSA until Medicare coverage begins.

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Using HSA Funds After Enrolling in Medicare

While contributions must stop, the good news is that HSA funds remain available for future use. Beneficiaries can use those dollars tax-free on a wide range of expenses, including many costs associated with Medicare.

Eligible Medicare-related expenses include:

• Medicare Part A, Part B, and Part D premiums
• Medicare Advantage (Part C) plan premiums
• Out-of-pocket costs like deductibles, copays, and coinsurance
• Dental, vision, and hearing expenses not covered by Medicare
• Prescription drugs (both covered and not covered by Medicare)

Important restriction: Beneficiaries cannot use HSA funds to pay for Medigap (Medicare Supplement) plan premiums.

Tax Benefits of Using an HSA with Medicare

• Tax-free withdrawals: As long as beneficiaries use funds for qualified medical expenses, withdrawals are tax-free.
• Penalty-free withdrawals after age 65: Even if funds are used for non-medical expenses, the 20% penalty is waived after age 65. However, the IRS taxes those withdrawals as regular income.

This flexibility makes HSAs a powerful retirement planning tool—especially for covering health costs, which typically rise with age.

Guidance for Medicare Agents

For agents advising clients, it’s helpful to remember:

1. Ask about employer coverage: If clients are still working past 65 and covered under an HDHP, delaying Medicare could allow them to continue building HSA savings.
2. Review timing carefully: Enrolling in Medicare Part A retroactively (up to 6 months) can affect HSA contribution eligibility and may trigger penalties if excess contributions are made.
3. Highlight the benefits of saved funds: Even if contributions stop, those HSA balances can play a big role in covering Medicare premiums and out-of-pocket costs.

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HSAs and Medicare don’t work together in the traditional sense; contributions must stop once Medicare begins. But the funds already in the account can provide significant financial relief for medical costs in retirement. For Medicare beneficiaries, understanding the rules ensures they maximize both their HSA and Medicare benefits. For agents, this knowledge is another way to bring clarity and value to client conversations.

SEPs for Medicare Part B Enrollment

For Medicare beneficiaries, the timing of enrollment is very important. While most people enroll in Medicare Part B during their Initial Enrollment Period (IEP) when they first become eligible, life circumstances don’t always fit neatly into those timelines. That’s where SEPs for Medicare Part B enrollment come in.

SEPs provide and opportunity for beneficiaries to sign up for Part B outside of their IEP or the GEP(General Enrollment Period), without facing late enrollment penalties, provided they meet certain conditions.

What is Medicare Part B

Medicare Part B helps cover outpatient care, doctor visits, preventive services, lab work, durable medical equipment, and more. Since it comes with a monthly premium, some people delay enrolling—especially if they’re still working and covered under an employer health plan.

When Can You Qualify for a Part B SEP

SEPs are designed to protect people who already had other coverage or experienced specific life events. Some of the most common situations include:

1. Employer or Union Coverage

• If you (or your spouse) are still working past 65 and covered by a group health plan, you can delay enrolling in Part B.
• Once that employment ends, or the employer coverage ends; you qualify for an 8-month SEP to sign up for Part B without penalty.

2. Coverage Through a Spouse

• If you’re covered under your spouse’s employer plan, the same SEP protections apply.
• This is important for individuals who retire before their spouse does, or vice versa.

3. Losing Other Creditable Coverage

• If you lose health insurance that’s considered “creditable” by Medicare standards (meaning coverage that’s at least as good as Medicare), you’ll likely qualify for an SEP.

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4. Special Circumstances (New Rules Starting in 2023)

CMS expanded SEPs to include situations such as:

• Emergency or disaster situations (declared by FEMA or other agencies).
• Employer or plan error where you were misinformed about enrollment.
• Medicaid coverage ending.
• Other exceptional conditions as determined by Medicare.

Forms you’ll need for a PArt B SEP enrollment

When enrolling in Medicare Part B during a Special Enrollment Period, most beneficiaries will need to complete two key forms:

• CMS-40B — Application for Enrollment in Medicare Part B (Medical Insurance); this is the standard enrollment form used to request Part B coverage. The beneficiary must complete this form.
• CMS-L564 — Request for Employment Information; this is the standard enrollment form beneficiaries use to request Part B coverage. It is completed by the beneficiary and their employer to verify that you had group coverage based on employment. Medicare uses it to confirm penalty free eligibility.

Please note: If your employer cannot fill out the CMS-L564, you can still submit it along with other proof of creditable coverage, such as pay stubs showing insurance deductions or health plan ID cards.

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Why SEPs Matter

Missing your enrollment period for Part B can lead to late enrollment penalties that increase your premium by 10% for each 12-month period you could have had Part B but didn’t enroll. These penalties usually last for as long as you have Medicare.

SEPs help people avoid those lifelong penalties if they had valid reasons for delaying enrollment.

Key Takeaways for Beneficiaries and Agents

• Always confirm whether an employer plan is considered creditable coverage before delaying Part B.
• Keep records of your health coverage and employment dates; Medicare often requires documentation.
• Complete both CMS-40B and CMS-L564 when applying for a Part B SEP.
• Educate clients that timing is everything. Even with an SEP, strict deadlines apply.

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Special Enrollment Periods give Medicare beneficiaries flexibility and protection when life events affect their coverage. Knowing the rules and having the right forms ready can save money, prevent penalties, and ensure continuous access to healthcare.