Medicare Basics: Parts A, B, C, D - and the IRMAA Trap
Medicare is one of those topics people assume they'll figure out when they get there. Then they get there, discover it's far more complex than expected, and sometimes discover they've already made a costly mistake.
The Four Parts
- Part A - Hospital Insurance: Covers inpatient stays, skilled nursing, some home health, hospice. Free for most who've worked 40+ quarters.
- Part B - Outpatient and Medical: Covers doctor visits, outpatient care, lab tests. Standard 2026 premium: $202.90/month.
- Part C - Medicare Advantage: Private insurance alternative bundling Parts A, B, and usually D. Often includes dental, vision, and hearing.
- Part D - Prescription Drug Coverage: Standalone drug plans. Premium varies by plan, income, and coverage level.
The Enrollment Window
IRMAA: The Income Surcharge
IRMAA surcharges are applied to higher-income beneficiaries, calculated based on income from two years prior. Your 2026 premiums are based on your 2024 MAGI.
The bottom line
Two-year lookback means your final high-income working year can affect your first year of retirement Medicare premiums.
What would you do?
Sam and his spouse both turn 65 this year. Sam's 2024 income was $185,000 from consulting - his final high-income year before retirement.
Your Move
Look up your income from two years ago. Use the 2026 IRMAA table to see which tier it falls into. If you're approaching 65: note your birthday and count out the 7-month enrollment window - 3 months before, the month of, and 3 months after your 65th birthday.
Sources
- Centers for Medicare & Medicaid Services, Medicare.gov: Medicare costs
Medicare Part A, B, C, and D costs and income-related premium adjustments (IRMAA)
Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.
Educational content only. Not financial, tax, or legal advice. Consult a qualified professional before making decisions based on your specific circumstances.
Last reviewed: April 2026