Medicare 101 for New Jerseyans turning 65

Turning 65 in New Jersey brings a pile of mail. Insurance agents call. TV ads promise extra benefits. Under all that noise sits a simple set of rules. Learn them once and you can make a calm, confident choice.

This guide covers the four parts of Medicare, when to sign up, what to do if you are still working, how to avoid penalties and what Medicare costs in 2026. It ends with a month-by-month timeline and a word about New Jersey's free counseling program.

What are the four parts of Medicare?

Medicare is federal health insurance for people 65 and older, and for some younger people with disabilities. It comes in pieces, called parts.

• Part A (hospital insurance) covers inpatient hospital stays, some skilled nursing facility care after a hospital stay, hospice and some home health care. Most people pay no premium for Part A because they or a spouse worked and paid Medicare taxes for about 10 years (40 quarters).
• Part B (medical insurance) covers doctor visits, outpatient care, lab work, scans, durable medical equipment and many preventive services. Almost everyone pays a monthly premium.
• Part C (Medicare Advantage) is an all-in-one alternative run by private insurers approved by Medicare. It bundles Parts A and B, and usually Part D, often with a network of doctors and hospitals.
• Part D (prescription drug coverage) is sold by private plans. You can buy a stand-alone Part D plan alongside Original Medicare, or get drug coverage inside a Medicare Advantage plan.

"Original Medicare" means Parts A and B together. Many people on Original Medicare add a Medicare Supplement policy (Medigap) to cover the gaps, plus a Part D plan. We compare that path with Medicare Advantage in our guide to choosing between Advantage and Medigap.

When should I sign up?

Your first chance is the Initial Enrollment Period (IEP). It lasts seven months. It starts three months before the month you turn 65, includes your birthday month and ends three months after it.

When your coverage begins depends on when you sign up during that window:

• Sign up in the three months before your birthday month and coverage starts the first day of your birthday month.
• Sign up in your birthday month or the three months after and coverage starts the first day of the next month.

One quirk: if your birthday falls on the first of a month, premium-free Part A starts the month before.

If you already collect Social Security or Railroad Retirement benefits, you are usually enrolled in Parts A and B automatically, and your Medicare card comes in the mail. Everyone else signs up through Social Security, online at ssa.gov/medicare or by phone at 1-800-772-1213.

What if I am still working at 65?

Plenty of New Jerseyans keep working, or stay on a working spouse's plan, well past 65. Whether you can safely delay Part B depends mostly on the size of the employer.

Employer with 20 or more employees

The job-based plan usually pays first and Medicare pays second. Many people in this spot take premium-free Part A and delay Part B. When the job or the coverage ends, you get a Special Enrollment Period to sign up for Part B with no penalty. It lasts until eight months after the job or the coverage ends, whichever comes first.

Employer with fewer than 20 employees

Medicare usually pays first. If you skip Part B, the employer plan may refuse to pay claims Medicare would have covered. In most small-employer cases you should enroll in Part B at 65. Ask the plan administrator in writing how it coordinates with Medicare.

Three traps to avoid

• COBRA and retiree plans do not count. Only coverage based on current work protects you. If you leave a job and pick up COBRA, your eight-month clock is already running.
• Health savings accounts (HSAs). Once any part of Medicare starts, you cannot put money into an HSA. If you sign up for Part A after 65, it can be backdated up to six months (never before the month you turned 65). Stop HSA contributions about six months before you apply so you do not owe tax on excess contributions.
• Drug coverage. Ask your employer plan for a letter saying whether its drug coverage is "creditable," meaning at least as good as standard Part D. Keep that letter. You may need it to prove you do not owe a Part D penalty later.

When you sign up for Part B later, Social Security asks for two forms: the CMS-40B application and the CMS-L564, where your employer confirms your coverage. You can also apply online and upload proof, such as W-2s showing pre-tax premiums or pay stubs with premium deductions.

How do the late penalties work?

Medicare's penalties are small at first and add up because they usually last as long as you have the coverage.

• Part B: 10% added to your premium for each full 12-month period you could have had Part B but did not. Wait two years without a valid reason and you pay 20% extra. In 2026 that turns $202.90 into $243.50 a month.
• Part D: 1% of the "national base beneficiary premium" for each month you went without Part D or creditable drug coverage. It applies after a gap of 63 days or more. The 2026 base premium is $38.99, so a 14-month gap adds about $5.50 a month on top of your plan premium, for as long as you have Part D.
• Part A: only matters if you have to buy Part A. The premium can rise 10%, for twice the number of years you delayed.

People who qualify for Extra Help or a Medicare Savings Program generally avoid these penalties. See our guide to prescription and bill help for New Jersey's PAAD and Senior Gold programs.

What will Medicare cost me in 2026?

Item	2026 amount
Part B standard monthly premium	$202.90
Part B yearly deductible	$283
Part A hospital deductible (per benefit period)	$1,736
Part A hospital coinsurance, days 61 to 90	$434 a day
Skilled nursing facility coinsurance, days 21 to 100	$217 a day
Part A premium with 30 to 39 quarters of work	$311 a month
Part A premium with fewer than 30 quarters	$565 a month
Part D yearly out-of-pocket cap on covered drugs	$2,100
Part D standard deductible	$615

Higher earners pay more for Part B and Part D through an Income-Related Monthly Adjustment Amount (IRMAA). For 2026 the Part B surcharge starts above $109,000 of modified adjusted gross income for a single filer, or $218,000 for a married couple filing jointly. Social Security uses your tax return from two years earlier. If your income dropped because you retired, you can ask it to use a newer year by filing form SSA-44.

Original Medicare has no yearly cap on what you pay for Part A and Part B services. That is the main reason people buy Medigap or choose a Medicare Advantage plan, which does have a yearly limit. 2027 premiums and deductibles had not been announced when we published this guide. Check Medicare.gov before you budget.

A month-by-month timeline

Say you live in Cherry Hill and turn 65 on March 18, 2027. You are retiring from a large employer at the end of February and are not yet collecting Social Security. Your IEP runs December 1, 2026, to June 30, 2027. Here is a sensible plan.

If you keep working at a large employer instead, you could take premium-free Part A at 65 (minding the HSA rule) and save Part B for later. Put the end date of your coverage on the calendar and apply at least a month before it.

How can SHIP help me?

New Jersey's State Health Insurance Assistance Program (SHIP) offers free, one-on-one Medicare counseling. The Department of Human Services runs it with federal funding, and trained volunteer counselors work in all 21 counties. They do not sell, recommend or endorse any plan, agent or company.

A SHIP counselor can:

• Explain your enrollment dates and whether you can safely delay Part B.
• Run your exact prescriptions through the Medicare Plan Finder.
• Compare Medigap prices using the state's rate charts.
• Check whether you qualify for help paying premiums.
• Help sort out a billing problem or a denied claim.

Call the SHIP Information Center at 1-800-792-8820 or your County Office on Aging. Appointments run by phone, by video or in person. Bring your Medicare card (or your application confirmation), your medication list and any letters from your employer plan.

If someone pressures you, offers a gift for your Medicare number or claims to be "from Medicare" on a cold call, hang up. Report it to New Jersey's Senior Medicare Patrol at 1-732-777-1940 ext. 1117. Our scams guide covers the most common tricks.

Common questions

Do I have to sign up for Medicare if I am still working?

Not always. If your employer has 20 or more employees and you have coverage through current work, you can usually delay Part B without penalty. Many people still take premium-free Part A. If the employer has fewer than 20 employees, Medicare usually pays first, so you generally need Part B at 65.

Is COBRA enough to avoid the Part B penalty?

No. COBRA does not count as coverage from current employment. Your eight-month Special Enrollment Period is measured from when the job or the group coverage ends, whichever comes first, even if you then take COBRA.

What does Part B cost in 2026?

The standard premium is $202.90 a month and the yearly deductible is $283. People with higher incomes pay an extra amount called IRMAA.

Can SHIP tell me which plan to buy?

SHIP counselors do not sell or endorse plans. They will walk you through your options and run comparisons so you can make your own decision. Call 1-800-792-8820.

This guide is for general information. Program rules and income limits change, so confirm with the official source before you apply.