What You (and your Financial Advisor) Should Know Before You Enroll in Medicare

For many high-net-worth individuals, becoming a Medicare beneficiary is often treated as a simple enrollment milestone in their wealth management journey: turn 65, sign up, choose coverage, and move on.

In reality, Medicare can intersect with retirement income planning, tax strategy, employer benefits, Roth conversions, capital gains, business sales, Social Security timing, and healthcare cash flow projections. For affluent clients, Medicare decisions are rarely just about medical insurance, health insurance, insurance products, or basic health coverage. They are often part of a much broader financial planning conversation.

This is especially important for financial advisors who work with clients approaching age 65, retiring after 65, selling a business, realizing significant capital gains, or making major tax planning decisions.

The key point is simple: Medicare planning should not happen in isolation.

Why Medicare Planning Matters More for High-Net-Worth Clients

Medicare can reduce some healthcare uncertainty in retirement, but it does not eliminate healthcare costs. Clients may still need to account for Medicare Part B premiums, Part D prescription drug costs, Medicare Supplement or Medicare Advantage coverage, dental, vision, hearing, and other out-of-pocket expenses.

For higher-income clients, there is another major consideration: IRMAA, the Income-Related Monthly Adjustment Amount.

IRMAA can increase Medicare Part B and Part D premiums based on income level, leading to significantly higher premiums for those in top tax brackets. For 2026, Medicare generally looks at a client’s 2024 modified adjusted gross income (MAGI) to determine whether they will pay higher Medicare premiums.

That means a financial move made two years earlier may affect Medicare costs later.

For example, a client may be retired in 2026, living on a more modest income, but still paying higher Medicare premiums because of a large Roth conversion, business sale, real estate sale, bonus, deferred compensation payout, or capital gain in 2024.

2026 Medicare Costs Clients Should Know

For 2026, the standard Medicare Part B premium is $202.90 per month, and the Part B deductible is $283.

Clients may also have additional costs, including those associated with medicare advantage plans and:

• Part D prescription drug plan premiums and deductibles
• Medicare Supplement premiums
• Medicare Advantage premiums, if applicable
• IRMAA surcharges for higher-income clients
• Dental, vision, hearing, and other non-covered healthcare expenses

For clients building retirement income projections, these costs should be included in the broader retirement cash flow conversation.

A couple on Medicare may need to estimate not just one monthly premium, but for married couples, the combined cost of both spouses’ Medicare premiums, supplemental coverage, drug coverage, and potential income-related premium adjustments.

IRMAA: The Medicare Premium Surprise for Affluent Clients

IRMAA is one of the most common Medicare surprises for high-net-worth individuals.

It is not a separate insurance plan. It is an additional amount added to Medicare Part B and Part D premiums when a client’s income exceeds certain thresholds.

Common IRMAA triggers include:

• Roth conversions
• Large IRA distributions
• Capital gains
• Business sales
• Real estate sales
• Bonuses
• Deferred compensation
• Portfolio rebalancing
• Large taxable withdrawals in retirement

The challenge is that IRMAA is based on a two-year income lookback of the client’s IRS federal tax return. Clients often do not connect a tax planning decision today with a Medicare premium increase later.

This does not mean a Roth conversion, business sale, or capital gain should be avoided. It simply means the Medicare impact should be included in the planning conversation before the transaction occurs.

Roth Conversions and Medicare Premiums

Roth conversions can be a valuable long-term tax planning strategy, especially for clients who want to reduce future required minimum distributions, create more tax flexibility, or leave tax-efficient assets to heirs.

However, a Roth conversion increases modified adjusted gross income in the year of the conversion. For Medicare-eligible clients, or clients close to Medicare age, that higher income may push them into a higher IRMAA bracket.

Financial advisors should pay particular attention to clients who are age 63 or older, because Medicare’s two-year lookback can cause income from the conversion to affect future Medicare premiums.

The conversion may still make sense. The issue is not whether Roth conversions are good or bad. The issue is whether the client understands the full cost, including the potential Medicare premium impact.

Capital Gains, Business Sales, and Medicare

Capital gains can create the same Medicare premium issue.

A client who sells appreciated stock, rebalances a concentrated position, sells investment real estate, or completes a business sale may have a significant increase in modified adjusted gross income.

That increase may later affect Medicare premiums through IRMAA.

This is particularly important for high-net-worth individuals who are transitioning into retirement. A client may sell a business or investment property before or shortly after Medicare begins and assume that the transaction only affects their taxes. In reality, it may also affect Medicare premiums in a future year.

Before a major taxable event, advisors should consider whether the client is approaching Medicare age or already enrolled in Medicare.

Working Past 65: Medicare Timing Can Be Complicated

Many affluent clients continue working past age 65, consult after retirement, sit on boards, own businesses, or remain covered under a spouse’s employer plan.

Some clients can delay Medicare Part B without penalty if they have active employer group coverage through their own employment or a spouse’s current employment. But this depends on the details.

Before delaying Medicare, clients should confirm:

• Whether coverage is based on active employment
• The size of the employer
• Whether the employer plan requires Medicare at age 65
• Whether the client is contributing to an HSA
• Whether prescription drug coverage is creditable
• How the employer plan coordinates with Medicare

Clients should not assume that all employer coverage allows them to safely delay Medicare.

The HSA Mistake at Age 65

Health Savings Accounts are another area where Medicare timing and tax planning can collide.

Once someone is enrolled in Medicare, they generally can no longer contribute to an HSA. This can become especially tricky because premium-free Medicare Part A may be retroactive for up to six months, but not earlier than the first month of Medicare eligibility.

That retroactive Part A hospital insurance start date can create a problem if the client continued making HSA contributions too close to Medicare enrollment.

This is a common issue for high-income clients who are still working past 65 and maximizing HSA contributions as part of their tax strategy.

Before applying for Medicare or Social Security, clients should coordinate Medicare timing, HSA contributions, payroll deductions, and tax advice with the appropriate professionals.

COBRA Is Not the Same as Active Employer Coverage

Clients leaving employment after age 65 may assume COBRA allows them to delay Medicare. That assumption can create problems.

COBRA is generally not treated the same as active employer group coverage for Medicare timing.

A common mistake looks like this:

A client leaves work after age 65, elects COBRA, waits until COBRA ends, and only then tries to enroll in Medicare Part B. By that point, the client may have missed the proper enrollment window, which can create a coverage gap, a late enrollment penalty, or both.

Before a client elects COBRA after age 65, Medicare timing should be reviewed carefully.

Retiree Coverage Also Needs Review

Retiree health coverage is another area where clients can make incorrect assumptions.

Retiree coverage is generally not the same as active employer coverage. Medicare may pay first, and the retiree plan may require the client to enroll in both Medicare Part A and Part B for full benefits.

Clients should confirm:

• Whether the retiree plan requires Medicare Part A and Part B
• Whether prescription drug coverage is creditable
• Whether enrolling in outside Part D coverage could affect retiree benefits
• Whether the retiree plan can change premiums, benefits, or availability
• How coverage affects a spouse or dependent

For financial advisors, this is an important review point before a client retires or transitions from active employer coverage to retiree benefits.

Social Security and Medicare Timing

Social Security decisions can also affect Medicare timing.

Many people who receive Social Security have their Medicare Part B premium deducted automatically from their Social Security benefit. Applying for Social Security may also affect Medicare Part A timing, which can matter for clients contributing to an HSA.

This is especially important for clients who are:

• Working past 65
• Delaying Medicare
• Continuing HSA contributions
• Starting Social Security
• Retiring after a high-income year
• Potentially subject to IRMAA

For these clients, Social Security claiming decisions should be coordinated with Medicare enrollment and broader retirement planning.

What Financial Advisors Should Watch For

Financial advisors do not need to become Medicare experts. But they should know when Medicare planning may affect the client’s broader financial picture.

Important Medicare planning triggers include:

• Client is approaching age 65
• Client is retiring or working past 65
• Client has active employer coverage
• Client is covered through a spouse’s employer plan
• Client is contributing to an HSA
• Client is considering a Roth conversion
• Client is selling a business or real estate
• Client has large capital gains
• Client is starting Social Security
• Client is offered COBRA or retiree coverage
• Client is building retirement income projections
• Client is concerned about healthcare costs in retirement

These are moments when a Medicare review can help prevent avoidable surprises.

A Better Planning Question

Instead of asking, “When do you turn 65?” a better question is:

“How do your Medicare decisions fit into your income, tax, retirement, and healthcare planning?”

That question is especially relevant for high-net-worth clients.

The right Medicare decision depends on more than age. It may depend on income, employment status, tax strategy, prescription drugs, employer coverage, spouse coverage, Social Security timing, and retirement goals.

FAQs

Can you get Medicare if you are wealthy?

Yes. Medicare eligibility is not based on wealth. Most people qualify for Medicare at age 65 if they meet the citizenship or residency requirements. Some people qualify earlier due to disability, ALS, or End-Stage Renal Disease. Wealth does not prevent someone from enrolling in Medicare, but higher income may increase what they pay for Medicare Part B and Part D through IRMAA, the Income-Related Monthly Adjustment Amount.

What are the IRMAA brackets for 2026?

For 2026, Medicare generally uses 2024 modified adjusted gross income, or MAGI, to determine IRMAA. For individuals and married couples filing jointly you can see the brackets here. The Part D IRMAA amount is added on top of the client’s prescription drug plan premium.

Is Parkinson’s covered by Medicare?

Medicare may cover medically necessary care related to Parkinson’s disease, but coverage depends on the service, provider, setting, and plan. For example, Medicare may cover doctor visits, medically necessary hospital care, physical therapy, occupational therapy, speech-language pathology, durable medical equipment, certain home health services, and prescription drugs if the client has appropriate drug coverage. Original Medicare generally does not cover long-term custodial care when that is the only care needed.

Do wealthy people pay more for Medicare?

Often, yes. Wealth itself does not increase Medicare premiums, but higher income can. Higher-income Medicare beneficiaries may pay more for Medicare Part B and Part D through IRMAA. For 2026, higher premiums begin when MAGI is above $109,000 for an individual or above $218,000 for a married couple filing jointly.

Why did my Medicare premium go up?

Your Medicare premium may have gone up for several reasons. The standard Medicare Part B premium increased to $202.90 per month in 2026. Your premium may also be higher than the standard premium if your income triggered IRMAA, if you are paying a late enrollment penalty, or if your Part D or Medicare Advantage plan changed its premium. For high-net-worth clients, common causes include Roth conversions, capital gains, business sales, large IRA withdrawals, bonuses, or deferred compensation that increased MAGI in the tax year Medicare is using.

How does income affect Medicare premiums?

Income can affect Medicare Part B and Part D premiums through IRMAA. The Social Security Administration uses MAGI from the most recent tax return the IRS provides, generally from two years prior. For 2026, that usually means the client’s 2024 tax return. If income is above the applicable threshold, the client pays an additional amount for Part B and Part D.

How will these higher premiums affect me?

Higher Medicare premiums increase monthly retirement healthcare costs. If you receive Social Security, Medicare premiums are typically deducted from your monthly benefit. If you do not receive Social Security, you may be billed directly. For high-income couples, the impact can be larger because each Medicare-enrolled spouse may have their own Part B premium, Part D premium, and possible IRMAA surcharge.

What happens if the enrollment period is missed?

Missing a Medicare enrollment period can create delayed coverage, late enrollment penalties, or both. If you miss your Initial Enrollment Period and do not qualify for a Special Enrollment Period, you may have to wait until the General Enrollment Period, which runs from January 1 through March 31, with coverage starting the month after you sign up. The Part B penalty is generally 10% for each full 12-month period you could have had Part B but did not enroll. Part D may also have a penalty if you go 63 days or more without creditable prescription drug coverage.

What about Medicare Part A?

Medicare Part A generally covers inpatient hospital care, skilled nursing facility care, hospice, inpatient rehabilitation, and some home health care. Most people pay $0 for Part A because they or a spouse paid Medicare taxes long enough while working. In 2026, people who do not qualify for premium-free Part A may pay either $311 or $565 per month, depending on their work history. The 2026 Part A hospital deductible is $1,736 per benefit period.

Is Medicare tied to Social Security?

Medicare and Social Security are separate programs, but they often interact. If you are already receiving Social Security benefits when you become eligible for Medicare, you may be enrolled automatically. If you receive SSA or Railroad Retirement Board benefits, your Part B premium is usually deducted from your monthly benefit. Applying for Social Security may also affect Medicare Part A timing, which is especially important for clients still contributing to an HSA.

What strategies can high-net-worth individuals use to manage Medicare costs?

High-net-worth individuals should coordinate Medicare planning with tax, retirement income, and investment planning. Strategies may include reviewing Roth conversion timing, managing large capital gains when possible, evaluating charitable giving strategies with a tax advisor, coordinating business sale or real estate sale timing, reviewing HSA contributions before Medicare enrollment, and confirming whether employer, retiree, or COBRA coverage affects Medicare timing. The goal is not always to avoid IRMAA, but to understand it before making major taxable decisions.

Are there Medicare surcharges for high-income earners?

Yes. High-income Medicare beneficiaries may pay IRMAA, which is an added amount for Medicare Part B and Part D. IRMAA is based on MAGI and filing status. For 2026, IRMAA begins above $109,000 for individuals and above $218,000 for married couples filing jointly.

Are there additional Medicare costs for high-income earners?

Yes. High-income earners may pay more for Part B and Part D because of IRMAA. They may also have the same other Medicare-related costs as other beneficiaries, including deductibles, copays, coinsurance, Medicare Supplement premiums, Medicare Advantage costs, prescription drug costs, and dental, vision, hearing, or long-term care expenses that may not be fully covered by Medicare.

Are high-net-worth individuals subject to different Medicare rules?

No. High-net-worth individuals are generally subject to the same Medicare eligibility, enrollment, and coverage rules as everyone else. The difference is usually cost. Higher-income clients may pay more for Medicare Part B and Part D through IRMAA, and they often need more careful coordination around income, taxes, employer coverage, Social Security, HSA contributions, Roth conversions, capital gains, and retirement timing.

Final Thoughts

For high-net-worth individuals, Medicare planning should be proactive, not reactive.

A late Medicare decision, missed enrollment window, unexpected IRMAA surcharge, HSA contribution mistake, or incorrect assumption about COBRA or retiree coverage can create unnecessary cost and stress.

For financial advisors, integrating Medicare planning into advisory services is an opportunity to add value by helping clients coordinate one of the most important healthcare transitions in retirement.

The goal is not to replace tax, legal, medicaid, or financial advice, and advisors should provide appropriate disclosures. The goal is to make sure Medicare is included in the planning conversation early enough to avoid surprises.