Medicare Enrollment Basics: Parts A, B, C, and D

Medicare enrollment looks simple — you turn 65 and sign up. The reality is a labyrinth of four "Parts," a seven-month enrollment window, and late-enrollment penalties that follow you for the rest of your life. Getting the mechanic right at 65 saves you thousands of dollars over the next 20 years.

The four parts

• Part A — Hospital Insurance. Premium-free for anyone with 40 quarters (10 years) of Medicare-covered work history. Covers inpatient hospital, skilled nursing, hospice, and some home health. Authority: Social Security Act §1811.
• Part B — Medical Insurance. Standard 2025 premium is $185.00/month, higher for high-income beneficiaries under IRMAA. Covers physician visits, outpatient care, preventive services, durable medical equipment. Authority: §1839.
• Part C — Medicare Advantage. Private plans that bundle A, B, and usually D, sometimes with extras (vision, dental). Replaces Original Medicare. Authority: §1851.
• Part D — Prescription Drug Coverage. Stand-alone drug plans or built into Advantage. Authority: §1860D.

The Initial Enrollment Period (IEP)

The IEP is a 7-month window: the three months before your 65th birthday month, your birthday month, and the three months after. Enroll during this window and coverage starts the month you turn 65 (or the following month if you enroll in the back-half months). Miss it and you face the General Enrollment Period (January 1–March 31 each year, coverage starting the following month) plus permanent late penalties.

The late-enrollment penalties

• Part B penalty: 10% of the standard premium for every 12 months you delayed, added to your premium for life. Miss two years, pay 20% extra forever — about $222/month in 2025 instead of $185.
• Part D penalty: 1% of the national base beneficiary premium ($36.78 in 2025) for every month you went without creditable drug coverage. The penalty is added to your Part D premium for life.
• Part A penalty (rare): applies only if you do not qualify for premium-free Part A and delay enrollment.

Working past 65 — the employer-coverage exception

If you are still working at 65 and covered by an employer group health plan from a company with 20 or more employees, you may delay Part B without penalty. When you eventually leave that coverage, you get an 8-month Special Enrollment Period (SEP) under §1837(i) to enroll in Part B without penalty. The SEP starts the month after employment or coverage ends, whichever comes first.

The 20-employee threshold matters: at a smaller employer, Medicare becomes the primary payer at 65 and the group plan becomes secondary. Failing to enroll in Part B leaves you effectively uninsured for the share Medicare would have paid. Confirm with HR whether your employer is "large" or "small" for Medicare secondary-payer purposes.

COBRA and retiree coverage do not count

COBRA and most retiree health plans are not "creditable coverage" for the Part B SEP. Relying on COBRA past 65 and delaying Part B triggers the lifetime penalty when you finally enroll. The federal rule is clear, and the mistake is common.

Social Security and Medicare

If you start Social Security before 65, you are automatically enrolled in Parts A and B at 65 (you can decline B if you have qualifying employer coverage). If you have not yet started Social Security, you must actively enroll in Medicare via the SSA — visit ssa.gov, call SSA, or go to a Social Security office.

Common mistakes

• Waiting because "I have employer coverage." Only employer plans from companies with 20+ employees qualify for the SEP. Smaller-employer plans require Part B enrollment at 65.
• Treating COBRA as creditable. It isn't. The Part B clock runs through COBRA periods.
• Forgetting Part D when picking an Advantage plan. Most Advantage plans include Part D, but not all. Enrolling in one that doesn't, without buying a standalone Part D plan, triggers the Part D penalty.
• Stopping HSA contributions late. Medicare enrollment ends HSA eligibility. SSA enrollment after 65 retroactively enrolls you in Part A for up to six months. Stop HSA contributions six months before claiming Social Security after 65.

Sources

• Social Security Act §1811 (Part A), §1839 (Part B), §1851 (Part C), §1860D (Part D): law.cornell.edu/uscode/text/42/1395c
• CMS, "Medicare & You 2025" handbook: medicare.gov/medicare-and-you
• CMS, "When Does Medicare Coverage Start?": medicare.gov sign-up
• CMS, "Part B late enrollment penalty": medicare.gov/basics/costs/avoid-penalties
• Social Security Act §1837(i), Special Enrollment Period: law.cornell.edu/uscode/text/42/1395p

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