Oct 14, 2026 · @Hans Scheil

Most people treat Medicare as a one-time form to fill out at 65. In reality, the first choice you make can lock you in for life. Here are seven things to understand before you sign anything.

In my experience, when a couple sits down to plan for Medicare, one thing surprises them almost every time: the decision they thought was simple turns out to be the one they can’t easily undo.

Take Tom and Linda, a couple I’ll use as a composite of many clients. Tom was retiring at 65 and Linda had just turned 65. Their mailbox was full of Medicare Advantage flyers promising $0 premiums, dental and gym memberships. Linda’s instinct was to pick the cheapest-looking plan and move on.

Then we asked a different question: what happens five or 10 years from now if one of you gets seriously ill and wants to see a specialist outside the plan’s network? In most states, the answer is that switching back to Original Medicare with a supplement could require passing medical underwriting. Get turned down, and you may be stuck.

That’s the piece of Medicare planning I see skipped more than any other. Like claiming Social Security, it’s a decision that’s hard to reverse. Here are the seven items every retiree should know.

1. Original Medicare vs. Medicare Advantage: two different roads

Every Medicare decision starts with one fork in the road. You either stay with Original Medicare (Parts A and B) and add your own coverage, or you choose Medicare Advantage (Part C), which usually bundles in drug coverage (Part D).

A point that confuses many people: choosing Advantage does not mean leaving Medicare. You still need Parts A and B, and you still pay your Part B premium. You’re simply letting a third-party insurer administer your benefits.

2. Medicare Supplements: standardized benefits, very different prices

Medicare Supplement (Medigap) policies come in lettered plans: A, B, C, D, F, G, K, L, M and N. Plans C and F are only available to people who became eligible for Medicare before 2020, so for most new retirees Plan G offers the richest benefits. That’s why most of my clients choose it.

Four features matter most:

• Benefits are standardized. A Plan G from one company covers exactly the same things as a Plan G from another. You’re comparing price and company stability, not coverage.
• Premiums vary greatly. Because benefits are identical, it pays to shop. Two insurers can charge noticeably different premiums for the same plan in the same ZIP code.
• Underwriting applies after your open enrollment window. You get a one-time, six-month Medigap open enrollment period that starts when you’re 65 or older and enrolled in Part B. During that window, insurers can’t turn you down for health reasons. After it, in most states, they can.
• Policies are guaranteed renewable. Once you have a policy, the insurer can’t cancel it because of your health, as long as you pay the premium.

That underwriting rule is what made Tom and Linda pause. The best time to buy a supplement is when nobody can say no.

3. Networks and pre-authorization: the trade-off behind the low premium

Networks and prior authorization are mostly a Medicare Advantage issue. With Original Medicare and a supplement, you can generally see any doctor or hospital in the country that accepts Medicare, with no referrals.

With many Advantage plans, by contrast:

• Your doctors may be limited to the plan’s network, especially with HMO-style plans.
• You may need a referral from your primary care doctor before seeing a specialist.
• The insurance company may require pre-authorization before covering certain tests, procedures or hospital stays.

For a healthy 65-year-old, these rules may never feel like a burden. They tend to matter most when you’re sick, which is exactly when you least want to argue with a third party about your care.

4. Know your enrollment seasons

Medicare runs on a calendar, and the fall window opens October 15. The key dates apply to Part C (Advantage) and Part D (drug) plans; Medicare Supplements follow different rules.

The supplement row is the one that trips people up. You can apply 365 days a year. Whether you’ll be accepted is another question.

5. Late-enrollment penalties can last a lifetime

Signing up late for Part B or Part D can cost you every month for the rest of your life.

• Part B: Your premium generally rises 10% for each full 12-month period you could have had Part B but didn’t, unless you were covered by a qualifying employer plan.
• Part D: The penalty is 1% of the national base beneficiary premium for each month you went without creditable drug coverage. The 2027 base premium is $41.33, so going 24 months without coverage would add roughly $9.92 a month, and the base rises over time.

If you’re still working past 65, confirm with your employer’s benefits team whether your coverage counts as creditable. Get it in writing.

6. IRMAA: the Medicare tax most retirees don’t see coming

Everyone on Medicare pays the Part B premium, which is $202.90 a month in 2026, or about $2,435 a year per person. Only a small share of beneficiaries, roughly 7%, also pay the Income-Related Monthly Adjustment Amount, or IRMAA. For those who do, it can be expensive.

IRMAA is based on your modified adjusted gross income from two years earlier. Your 2026 premiums were set by your 2024 tax return.

Part D carries its own IRMAA surcharge, up to $91 a month at the top tier. Add the top Part B surcharge of $487 and a high earner can pay nearly $7,000 a year in extra premiums. For a married couple, both spouses pay it.

Two planning points follow. First, a large Roth conversion, home sale or IRA withdrawal at 63 can raise your Medicare premiums at 65. Second, if your income dropped because of a life-changing event, such as retirement, divorce or the death of a spouse, you can ask Social Security to recalculate using Form SSA-44.

7. Stand-alone Part D: fewer choices, higher cap, same need to enroll

If you take the Original Medicare road, you’ll buy a stand-alone Part D drug plan. That market is shrinking: the average beneficiary will have nine stand-alone plans to choose from in 2027, down from 11 in 2026, according to KFF.

What to know for 2027:

• Enroll even if you take few or no prescriptions. Skipping coverage now triggers the lifetime penalty described above, and you can’t predict next year’s diagnosis.
• The out-of-pocket cap is rising. The most you’ll pay for covered drugs is $2,100 in 2026 and $2,400 in 2027. After that, covered drugs cost $0 for the rest of the year. The standard deductible rises to $700.
• Review your plan every fall. Formularies, pharmacies and premiums change each year. A premium-support program that held down some stand-alone premiums ends after 2026.
• Set up a Medicare.gov account. It lets you enter your exact prescriptions and pharmacies, compare plans side by side and see your claims.

The bottom line: Medicare is part of your retirement plan, not separate from it

Tom and Linda ended up choosing Original Medicare with Plan G and a stand-alone Part D plan while they could still buy a supplement with no health questions. Their premiums are higher today. In exchange, they have nationwide access to doctors and very predictable costs if their health changes.

That may not be the right answer for everyone. Some people value lower premiums and extra benefits, and they’re comfortable with networks. What matters is making the choice on purpose, with the long-term trade-offs in view.

Medicare also doesn’t stand alone. Your Social Security start date, long-term care plan and IRA or 401(k) withdrawals all affect your income. That income, in turn, drives your taxes, your IRMAA bracket and what you leave behind. A good Medicare decision is coordinated with all of them.

Before you sign up, or before Dec. 7 if you’re reviewing an existing plan, sit down with someone who can look at the whole picture.

About Cardinal Guide

Have questions about your Medicare options? Call 919.535.8261, visit CardinalGuide.com or listen to the Finishing Well podcast.

This article is for general educational purposes and is not individualized insurance, tax or legal advice. Figures are current as of October 2026 and change annually. Plan availability and Medigap underwriting rules vary by state.