For years, rising healthcare costs have been the top concern of Americans retiring or about to retire. High inflation has only made paying for health care more difficult, especially for those on a fixed income. Based on a recent analysis of healthcare costs and inflation, a short-term increase in inflation may have a long-term impact on healthcare spending in retirement, even if current inflation rates are temporary. This is because inflation has an amplifying effect on these costs, with any jump in price affecting all future costs. In other words, the larger this year’s increase, the higher the cost basis for next year’s increase, and so on. Assuming healthcare costs increase by 1.5 to 2 times the Consumer Price Index (CPI) over the next two years (7.9% at the time the analysis was conducted), the lifetime healthcare costs for a healthy 65- years Old married couples are projected to grow by $85,000 over their life expectancy to a total of $673,587.

While estimates of healthcare costs in retirement vary somewhat from one study to the next, all point to people needing to factor these growing costs into their planning. But what about Medicare? Doesn’t that pay for healthcare in retirement?

Medicare helps cover healthcare expenses, but it doesn’t cover every expense you may incur. Once you join Medicare, you still have certain expenses that can include premiums, over-the-counter and prescription drugs, and all or some of certain medical services and/or equipment. Additionally, Medicare also doesn’t cover one of the biggest expenses many retirees face, which is long-term care. Therefore, it’s important to understand how Medicare works and what is and isn’t covered before signing up or changing plans.

Medicare expense management

Traditional Medicare Parts A and B cover specific medical services and supplies in hospitals, doctor’s offices, and other healthcare facilities, and Part D covers prescription drugs. Medicare supplements, or “medigap” policies, are available through private insurance companies and can help cover certain expenses not covered by Medicare Parts A and B, such as: If you buy a Medigap policy, you must have Medicare Parts A and B.

Another thing to keep in mind is that Medicare costs can change annually. For example, Part A will be deductibles, coinsurance and premiums increase in 2023. Keep in mind that most people will not pay Part A and will be automatically enrolled when they turn 65. (Part A premiums, which generally increase each year, only apply if you’ve paid fewer than 40 quarters of Medicare taxes during your service years.) The opposite is true for Part B in 2023. The standard monthly premium for Medicare Part B participant applies reduction by $5.20 per month to $164.90 from $170.10 in 2022. The Medicare Part B deductible will also increase reduction from $233 in 2022 to $226 in 2023.

A Medicare Advantage Plan is another way to get your Medicare Parts A and B coverage. Medicare Advantage plans, also known as “Part C” or “MA plans,” are offered by Medicare-approved private insurers who must follow the rules established by Medicare. Most Medicare Advantage plans include drug coverage (Part D). Many have no premiums and offer low or no deductibles, and most plans set limits on the maximum prime you pay during a plan year. However, you must use healthcare providers that participate in the plan’s network. While some plans offer non-emergency off-network coverage, it usually comes at a higher cost. You may also need to get your plan’s approval before it covers certain medications or services.

There’s something else to keep in mind when determining the best options for your needs. If you’ve been enrolled in a Medicare Advantage plan for more than 12 months then you decide to switch to traditional Medicare, Medigap plans are no longer required to include you without underwriting, which involves passing a health screening. This is important if you have previously been diagnosed with certain diseases or chronic conditions. For a comprehensive overview of what Medicare does and does not cover, visit

Don’t miss any important deadlines

Once you’ve selected the options that best suit your needs and budget, one of the best ways to manage ongoing expenses is to keep track of important deadlines. Many people don’t realize that missing important deadlines when signing up for Medicare or making changes can result in paying more for those benefits over time. For example, most people who are already receiving Social Security disability or retirement benefits are automatically enrolled in Medicare Parts A and B when they first qualify. If you don’t receive Social Security benefits, you can enroll in Part A at any time after age 65. However, in most cases, if you do not register for Part B when you first become eligible, there may be a delay in obtaining Medicare Part B in the future, and you may have to pay a late registration penalty, as long as you have part B. In addition, certain higher-income beneficiaries are subject to a Part B supplement known as the Income-Related Monthly Adjustment (IRMA).

To avoid penalties and higher premiums, consider the following for deadlines:

  • Initial Enrollment Period (IEP) – Your IEP lasts 7 months, starting 3 months before your 65th birthday and ending 3 months after the month you turn 65. Beginning January 1, 2023, if you enroll in Medicare in the month you turn 65 or during the last 3 months of your IEP or during the general enrollment period, your coverage will begin on the first day of the month following your enrollment.
  • General enrollment period (GEP) – The Medicare GEP occurs between January 1st and March 31st each year. This is generally the only time people who did not enroll during their original enrollment period and are eligible for Medicare Parts A and/or B can enroll.As of January 1, 2023, your insurance cover begins on the first day of the month after you register.
  • Special Registration Period (SEP) – Participants who have enrolled in Medicare Advantage and/or a Part D prescription drug plan may be eligible to make changes to their coverage under an SEP if they experience a qualifying life event, such as: B. moving to another state or losing your employer’s health insurance coverage. Additionally, a new special filing period will be available in 2023 to cover exceptional circumstances. This option helps people who miss a registration period due to certain events, such as a natural or other emergency, incarceration, or loss of Medicaid protection. Visit for a complete list of special circumstances and applicable rules for each SEP. Remember, if you have employer-based health insurance through your current job (or your spouse’s), you don’t have to enroll in Medicare if you or your spouse are still working. You can wait until one of you stops working or you lose your health insurance to enroll, whichever comes first.
  • Open Enrollment Period (OEP) – Medicare’s OEP occurs every year October 15th to December 7th. During the OEP, anyone with Medicare can make changes to their health plans and prescription drug coverage for the following calendar year. Even if you didn’t want to make any changes to your perks this year, take a few minutes to see what’s new. Always check the materials your plan sends you, including the “Annual Change Notice” and the “Coverage Statement” to ensure your plan still meets your needs for the following year. You can also join, switch, or cancel a Medicare Advantage plan during the OEP. If you enroll in a Medicare Advantage plan during this period but change your mind, you can do so during the Medicare Advantage Open Enrollment Period (March 1-31). If you haven’t received your copy of the official US government manual, download Medicare & You 2023 or visit for more information on plan changes and benefits.

While Medicare provides a wealth of information about this important benefit, there’s no question that sifting through the alphabet soup of plans and options and comparing costs can be confusing and time-consuming. This is where an experienced financial advisor can help. Ask your advisor or team about the Medicare, aged care, and/or long-term care planning resources they provide to help you manage healthcare costs in retirement, or if they can refer you to a financial professional who specializes in this area is. Remember, paying for your retirement health care expenses is an important part of a long-term strategic planning approach that takes into account not just those expenses, but all of your retirement lifestyle goals.

To learn more about getting started with Medicare, download our free guide: When should I enroll in Medicare?