This Is What Happens When You Assume Medicare Means ‘No More Healthcare Bills’ After Age 65

Key Takeaways

• Medicare does not eliminate healthcare costs after age 65. You are still responsible for premiums, deductibles, coinsurance, and services not covered by Medicare.

• Without proper planning, uncovered services and out-of-pocket limits can erode your retirement budget within the first few years of enrollment.

Medicare Starts at 65, But So Do the Monthly Bills

Once you turn 65, you may qualify for Medicare, but it doesn’t mean healthcare becomes free. You are still responsible for multiple costs across Medicare Part A, Part B, Part D, and possibly supplemental coverage. If you don’t fully understand how each part works, the monthly bills can quickly become an unexpected burden.

Medicare works like a shared-cost system: the federal government pays part of the costs, and you cover the rest. In 2025, that “rest” includes premiums, deductibles, copayments, and costs for services not covered by Medicare.

What You Pay for Medicare Part A in 2025

Part A is often called hospital insurance. It covers inpatient care in hospitals, skilled nursing facilities (with limits), hospice, and some home health care.

• If you or your spouse paid Medicare taxes for at least 40 quarters (10 years), you pay no monthly premium.

• If you worked fewer than 30 quarters, you pay $518/month in 2025.

• If you worked 30-39 quarters, the premium is $284/month.

The Part A deductible is $1,676 per benefit period. This is not annual—you could pay it more than once in a year if you are hospitalized multiple times.

You also face coinsurance for longer hospital stays:

• Days 1-60: $0

• Days 61-90: $419 per day

• Days 91-150: $838 per lifetime reserve day

• After 150 days: You pay 100% of the costs

Skilled nursing facilities have coinsurance too:

• Days 1-20: $0

• Days 21-100: $209.50 per day

• After day 100: You pay all costs

Medicare Part B Premiums and Costs Add Up Quickly

Part B covers outpatient care, preventive services, medical supplies, and doctor visits. Nearly all enrollees must pay a monthly premium.

In 2025:

• The standard premium is $185/month.

• The annual deductible is $257.

After the deductible, you usually pay 20% of Medicare-approved costs with no cap on total spending.

You may pay more if your income is above certain thresholds due to the Income-Related Monthly Adjustment Amount (IRMAA). These higher premiums apply if your 2023 income exceeds $106,000 (individual) or $212,000 (married couple).

Prescription Drugs Aren’t Free Under Medicare Part D

If you want coverage for prescription drugs, you need to enroll in a Part D plan. These plans are offered by private companies approved by Medicare, and costs vary widely.

In 2025, the Part D deductible can be up to $590. After that, you pay a portion of your drug costs until your total out-of-pocket spending hits $2,000. At that point, you enter the catastrophic phase and pay nothing more for covered drugs for the rest of the year.

Keep in mind that:

• You still pay monthly premiums for Part D.

• Some drugs have coinsurance or tiered copays.

• Not all drugs may be covered, depending on your plan’s formulary.

Gaps in Medicare That Often Surprise People

Original Medicare does not cover everything. These gaps can lead to major out-of-pocket costs unless you plan ahead.

Dental, Vision, and Hearing

• Routine dental care, dentures, cleanings: Not covered

• Eye exams, glasses: Not covered

• Hearing aids and exams: Not covered

Long-Term Care

Medicare only covers short-term skilled nursing, not custodial care. If you need help with daily living activities (eating, bathing, dressing), those costs fall entirely on you unless you have separate coverage.

Foreign Travel

In most cases, Medicare does not cover medical care you receive outside the United States.

Excess Charges

If your provider doesn’t accept Medicare assignment, they can charge up to 15% more than the Medicare-approved amount. You pay that difference out-of-pocket.

Cost Risks for Delayed Enrollment

If you delay signing up for Medicare when you become eligible and don’t have creditable coverage, you could face late penalties:

• Part B Late Enrollment Penalty: Increases your premium by 10% for each full 12-month period you delay.

• Part D Late Enrollment Penalty: Calculated based on the number of months you were without coverage.

These penalties are permanent. They can significantly raise your costs every year going forward.

Medicare Advantage Is Not a Cost-Free Shortcut

Medicare Advantage (Part C) plans are an alternative to Original Medicare. They may offer lower upfront costs or include extras like vision or dental, but they come with limitations:

• Network restrictions

• Prior authorization for services

• Annual out-of-pocket limits that vary by plan

In 2025, the maximum allowed out-of-pocket limit is $9,350 for in-network care. Some plans have lower limits, but you must read the details carefully.

Also, some services may have higher coinsurance or limited provider availability. You might save initially, but costs could rise over time based on your health needs.

Why Supplemental Coverage Still Matters

Because Original Medicare doesn’t have a cap on out-of-pocket spending, many people add supplemental insurance. Options include:

• Employer retiree plans (if offered)

• Medicaid (if you qualify)

• Medigap (sold separately, with its own rules)

In 2025, these options remain important for reducing risk, but they also come with their own premiums, rules, and coverage limits.

Annual Costs Can Easily Top Several Thousand Dollars

Let’s consider a hypothetical budget for someone enrolled in Medicare in 2025:

• Part B premium: $185 x 12 = $2,220

• Part D premium: Estimated at $46.50 x 12 = $558

• Part A deductible (once): $1,676

• Part B deductible: $257

• Drug deductible: $590

• Coinsurance costs and copays: Variable, easily $1,500+

Estimated Total: Over $6,800/year

And this does not include:

• Dental, vision, or hearing expenses

• Long-term care costs

• Travel-related medical expenses

• Late enrollment penalties (if applicable)

The Cost of Ignoring Inflation and Healthcare Price Trends

Healthcare costs tend to rise faster than inflation. If you’re planning for retirement over 20-30 years, you can’t assume Medicare costs will stay the same.

• Medicare premiums, deductibles, and coinsurance increase most years.

• Prescription drug costs continue to rise, even with annual caps.

• You may need more care as you age, increasing your exposure to out-of-pocket expenses.

Failing to adjust your retirement planning for these changes can cause you to outlive your savings or face difficult choices later in life.

What You Can Do to Prepare

Understanding the real costs of Medicare is only the first step. To protect your retirement savings, consider these strategies:

• Enroll on time to avoid penalties

• Budget for premiums, deductibles, and supplemental coverage

• Explore cost-saving programs if your income is limited

• Review your Part D drug plan annually during Open Enrollment

• Ask your providers whether they accept Medicare assignment

• Consider whether a Medicare Supplement or Advantage plan fits your needs

Preparation is your best defense against financial strain from healthcare expenses in retirement.

Think Medicare Covers It All? Think Again

If you assume Medicare means no more bills after 65, you’re likely to be disappointed and financially vulnerable. From premiums and deductibles to services that are completely excluded, Medicare still requires you to share in the costs. It is not full coverage, and the gaps can be costly if you’re not aware.

For help reviewing your Medicare options and comparing plan benefits, talk to a licensed agent listed on this website. Getting personalized advice now can help prevent expensive surprises later.