Most people should enroll in Medicare at 65, even if they have employer coverage. Medicare Parts A and B combined with a Medigap supplement typically provides broader coverage and lower out-of-pocket costs than most private insurance plans for people over 65.
Medicare Part A (hospital) is free for most Americans who paid Medicare taxes for 10+ years. Part B (outpatient and medical) costs $185/month in 2026. On their own, Parts A and B have significant gaps, a 20% coinsurance on most services with no out-of-pocket maximum. A Medigap (Medicare Supplement) plan covers most or all of that gap, typically for $100-$350/month depending on your age, plan type, and location.
Employer-sponsored insurance after 65 varies widely. If you work at a large employer (20+ employees) that offers retiree health coverage, Medicare typically becomes primary and the employer plan secondary, meaning Medicare pays first and the employer plan covers the remainder. In this case, enrolling in Medicare at 65 is almost always the right move, as Medicare's primary coverage often reduces your overall costs.
The risk of delaying Medicare is significant. If you delay enrollment past your initial enrollment period without qualifying coverage (large employer plan), you face a permanent 10% penalty on your Part B premium for every 12 months you delayed, for life. The special enrollment period after losing employer coverage gives you 8 months to enroll penalty-free, but missing that window is costly.
For Northern Suburbs residents with access to NorthShore University HealthSystem and Northwestern Medicine, confirming that both Medicare Advantage or Medigap plans include in-network access to preferred providers is an important step. Medicare Advantage plans vary by county, and some have narrower networks. Original Medicare (Parts A and B + Medigap) is accepted by virtually all providers nationwide, important for retirees who travel or maintain second homes.
Key facts
- Medicare Part A: free for most; covers hospital, skilled nursing, some home health
- Medicare Part B: $185/month in 2026 (standard); covers outpatient, physician services
- Late enrollment penalty: 10% per year of delayed Part B enrollment, assessed permanently if not enrolled in qualifying employer coverage
- Medigap Plan G: covers all Part A and B gaps except the Part B deductible ($257 in 2026); premium varies by age and insurer
- Medicare Advantage: alternative to Medigap, bundled Plans through private insurers; often lower premium but narrower network and prior authorizations
- Initial enrollment period: 7 months centered on your 65th birthday month
What is the difference between Medigap and Medicare Advantage?
Medigap (Medicare Supplement) is a policy you buy to fill the gaps in Original Medicare. You use Original Medicare as your primary insurance and Medigap pays the remaining costs. You can see any provider that accepts Medicare, nationwide. Medicare Advantage (Part C) replaces Original Medicare with a private plan that typically bundles Parts A, B, and D. Advantage plans often have lower premiums but require in-network providers and may need prior authorizations for certain services.
When is the best time to sign up for Medicare?
Enroll during your Initial Enrollment Period, the 7-month window starting 3 months before your 65th birthday month. This avoids late enrollment penalties. If you have qualifying employer coverage from an active employer (not retiree coverage), you can delay Medicare enrollment without penalty while that coverage is active, then enroll during the Special Enrollment Period within 8 months of losing that coverage.