Key Takeaways

• Even though Medicare might seem straightforward at first, first-time enrollees often miss essential details about enrollment timelines, coverage limitations, and cost-sharing.

• Understanding the relationship between Medicare Parts A, B, C, and D—and how they work with other benefits like employer coverage—can help you avoid penalties and coverage gaps.

Understanding the Basics Is Only the Beginning

Medicare seems simple enough on the surface. You turn 65, you sign up, and you’re covered—right? Unfortunately, it’s rarely that clear-cut. If you’re enrolling for the first time in 2025, you’ll want to make sure you’re not assuming too much. The truth is, there are several layers to Medicare that often get overlooked, and missing even one piece could cost you more money—or leave you without the coverage you thought you had.

Your Initial Enrollment Period Isn’t Open-Ended

You only get one Initial Enrollment Period (IEP), and it’s tied to your 65th birthday. This window lasts for 7 months: it begins 3 months before your birthday month, includes your birthday month, and continues for 3 months after.

Here’s why it matters:

• If you don’t enroll in Medicare during your IEP and you’re not covered by qualifying employer insurance, you may face late enrollment penalties.

• Penalties for Part B can be lifelong, increasing your monthly premium by 10% for each 12-month period you were eligible but didn’t enroll.

Even if you’re still working, it’s essential to understand whether your employer coverage allows you to delay enrollment without a penalty. Not all coverage qualifies.

Not Everything Is Covered Under Medicare

One of the biggest surprises for new Medicare enrollees is that the program doesn’t cover all healthcare needs.

Here’s what Medicare typically does not cover:

• Long-term care (also known as custodial care)

• Most dental care

• Eye exams related to prescription glasses

• Hearing aids and exams for fitting them

• Routine foot care

If you need these services, you’ll need to seek additional insurance or pay out of pocket. Medicare isn’t intended to be all-inclusive. Knowing this helps you plan for the potential gaps.

Medicare and Employer Coverage Can Be Complicated

If you’re working past 65, or your spouse is, Medicare and employer insurance may coordinate. But coordination rules vary depending on the size of the employer.

Here’s what to keep in mind:

• If your employer has 20 or more employees, the employer’s insurance pays first, and Medicare pays second.

• If your employer has fewer than 20 employees, Medicare typically becomes the primary payer.

Understanding this relationship is critical. If Medicare becomes primary and you haven’t enrolled, your employer plan may deny claims, leaving you responsible for the bill.

Part D Isn’t Automatic—and the Penalty Can Linger

Prescription drug coverage, known as Medicare Part D, is separate. You must actively choose a plan if you want drug coverage, even if you’re not currently taking any medications.

Why you should act early:

• If you don’t sign up during your IEP and have no other creditable drug coverage, you may be subject to a late enrollment penalty.

• The penalty adds a permanent percentage increase to your monthly Part D premium—1% for every month you go without coverage after your IEP ends.

Even if you think you don’t need prescriptions now, enrolling in Part D can be a smart move to protect yourself later.

The Different Parts of Medicare Don’t Work the Same Way

You may have heard about Medicare Parts A, B, C, and D—but they serve very different purposes. Here’s how they function in 2025:

• Part A (Hospital Insurance): Covers inpatient hospital care, skilled nursing facility care, hospice, and some home health services. Most people don’t pay a premium if they worked at least 40 quarters.

• Part B (Medical Insurance): Covers doctor visits, outpatient care, preventive services, and some home health. The standard premium in 2025 is $185, with a deductible of $257.

• Part C (Medicare Advantage): An alternative to Original Medicare, combining Parts A and B, and often Part D. Plans may include additional benefits, but vary widely.

• Part D (Prescription Drug Coverage): Covers prescription medications. In 2025, the out-of-pocket cap is $2,000, after which the plan covers 100% of covered drug costs.

Understanding what each part covers—and how they work together—is key to making informed choices.

Medigap Isn’t the Same as Medicare Advantage

Another common confusion involves Medicare Supplement Insurance (Medigap) and Medicare Advantage. They are not interchangeable, and you can’t have both at the same time.

Key differences:

• Medigap supplements Original Medicare (Parts A and B) by covering some of your out-of-pocket costs, like deductibles and coinsurance.

• Medicare Advantage (Part C) replaces Original Medicare with a private plan that may include additional benefits but often has network restrictions.

First-time enrollees often assume these two types of coverage are stackable—but they’re not. It’s either/or, and your choice impacts how you access care and how much flexibility you’ll have.

Annual Enrollment Isn’t a Free-For-All

While Medicare offers an Annual Enrollment Period (AEP) from October 15 to December 7, there are limits to what you can change.

You can:

• Switch from Original Medicare to a Medicare Advantage Plan

• Switch from one Medicare Advantage Plan to another

• Join, switch, or drop a Part D plan

But you can’t enroll in Medigap during this time unless you meet certain criteria. If you want Medigap, your best chance is during your Medigap Open Enrollment Period—6 months starting when you first enroll in Part B and are 65 or older.

Your Income Affects Your Premiums

Medicare isn’t one-size-fits-all when it comes to costs. If your income is above certain thresholds, you’ll pay more for Parts B and D through the Income-Related Monthly Adjustment Amount (IRMAA).

In 2025, IRMAA applies if:

• You’re an individual with income over $106,000

• You’re married filing jointly with income over $212,000

Premiums rise in tiers based on income. This adjustment can come as a surprise, especially if your income changed recently and you didn’t know you could request a reconsideration based on a life event.

Medicare Doesn’t Cover Foreign Travel

If you’re planning to travel outside the U.S., you’ll need to plan ahead. Original Medicare usually doesn’t cover medical care outside the country.

Some Medigap policies offer limited foreign travel emergency coverage. Certain Medicare Advantage plans may also include some coverage abroad. But don’t assume—you need to verify this before you go.

Without coverage, even a minor injury or illness abroad can lead to high out-of-pocket costs.

Preventive Services Are Covered—But Know What That Means

Medicare does include coverage for many preventive services, like screenings and vaccinations. But the coverage details can be confusing.

For example:

• The “Welcome to Medicare” visit is only available within the first 12 months of enrolling in Part B.

• The Annual Wellness Visit is covered every year, but it’s not a full physical exam.

• Some screenings have specific eligibility criteria or time intervals.

Knowing what counts as preventive—and when it’s covered—can help you take advantage of benefits while avoiding surprise bills.

Some Changes Can Only Be Made During Special Periods

Medicare allows changes to coverage during Special Enrollment Periods (SEPs) triggered by qualifying life events. These include:

• Moving to a new area

• Losing other coverage

• Becoming eligible for Medicaid

These periods are time-limited, often lasting only 2 months from the event. Missing the SEP could mean waiting months for the next opportunity to make changes.

Stay alert to the timing, especially if you’re transitioning from employer coverage or relocating.

A Closer Look Can Save You Trouble

First-time Medicare enrollment involves more than just checking a box. It’s a multi-layered process that requires understanding timelines, knowing the limits of your benefits, and making informed decisions about supplemental coverage and prescription drug plans.

If you’re new to Medicare in 2025, don’t go it alone. A licensed agent listed on this website can help you evaluate your situation, explain your options, and avoid costly mistakes.