Managing Medicare, ongoing healthcare costs, and long-term care considerations throughout retirement.
Questions about this lesson?
Ask Joe — he can help you understand any topic covered here.
“Healthcare in retirement isn’t something you figure out once. It needs a check-in every year — because plans change, your health changes, and what was right in year one may not be right in year ten. The people who manage it best treat Open Enrollment like a bill review: make the time, do the comparison, and make sure you’re still in the right place.”
Joe reminds members that healthcare in retirement is a recurring responsibility, not a one-time task. Annual reviews, drug formulary checks, and proactive planning for dental and long-term care are what keep healthcare costs from becoming retirement’s biggest financial stress.
For many retirees, healthcare becomes the largest ongoing expense they did not fully plan for. Once you have your coverage in place, the work continues: reviewing plans annually, managing out-of-pocket costs, staying on top of prescription changes, and eventually thinking about what happens if your healthcare needs increase significantly.
This lesson covers the ongoing healthcare decisions you will face in retirement — not enrollment basics, which were covered earlier in this series, but the practical management questions that come up year after year.
• Medicare is not free Most people know that Medicare Part A (hospital) has no premium for those who worked enough quarters. But Part B (medical), Part D (prescription drugs), and any supplemental coverage all carry premiums, deductibles, and out-of-pocket costs.
• High-income retirees pay more If your income exceeds certain thresholds, Medicare charges higher Part B and Part D premiums through a surcharge called IRMAA (Income-Related Monthly Adjustment Amount). Large retirement account withdrawals or RMDs can push income above those thresholds, so coordinating income planning with healthcare cost awareness matters.
• Medicare Advantage vs. Original Medicare is a recurring decision During Medicare’s annual Open Enrollment (October 15 through December 7), you can switch between Original Medicare, Medicare Advantage, and Part D drug plans. Networks, premiums, and covered services change year to year — plans that worked well in year one may not be the best fit in year five.
• Review your coverage every year Do not assume last year’s plan is still the best option. Premium changes, formulary changes, and your own health changes may make a different plan more appropriate. The Medicare Plan Finder tool at medicare.gov is a useful comparison resource.
• Understand which is primary and which is secondary If you have both Medicare and a retiree health plan through your union or former employer, one pays first (primary) and the other may pay second (secondary). How they coordinate affects what you actually owe out of pocket. Your Benefits Center can explain how your specific plan works with Medicare.
• Retiree plan rules can change over time Benefit plans have the ability to modify benefits, premiums, or eligibility rules. Staying current on your plan’s annual communications is important. If you receive a Summary of Benefits or Annual Notice of Change, read it.
• Contact the Benefits Center for plan-specific questions Questions about how your retiree health coverage works alongside Medicare — which is primary, what services are covered under each, what your actual out-of-pocket exposure is — should be directed to your Benefits Center.
• Prescription drug coverage needs regular review Drug formularies — the list of medications a plan covers and at what cost tier — change annually. If a medication moves to a higher cost tier or is dropped from the formulary, your out-of-pocket cost can increase significantly. Review your Part D or Medicare Advantage drug coverage during Open Enrollment each year.
• Provider networks change too If you are in a Medicare Advantage plan, your doctors and specialists must be in-network for the plan to cover their services at the lower rate. When your plan’s network changes or when you switch plans, confirm that your existing providers are still covered.
• Original Medicare does not cover dental, vision, or hearing These are significant gaps. Some Medicare Advantage plans include limited dental, vision, and hearing benefits. Retiree health plans vary. Out-of-pocket costs for dental work, glasses, and hearing aids can be substantial — they deserve a line in your budget and advance planning.
Long-term care refers to ongoing assistance with daily activities — bathing, dressing, eating, moving around — due to aging, illness, or disability. It is one of the largest potential expenses in retirement, and it is almost entirely not covered by Medicare.
• Medicare covers short-term rehabilitative care, not long-term care Medicare will pay for short stays in a skilled nursing facility after a hospital stay, but it does not cover ongoing custodial care (help with daily activities). Medicaid covers long-term care for those who meet income and asset eligibility requirements.
• Long-term care options include insurance, personal savings, and family plans Long-term care insurance exists specifically to cover these costs, but premiums are significant and increase with age. Other approaches include self-insuring through savings or planning for family assistance. There is no single right answer — this is a personal decision that depends on your health history, family situation, financial resources, and values.
• Starting the conversation early matters Long-term care planning is best done before a health crisis forces a decision. Having a conversation with family members and, if appropriate, a financial professional about what you would want and what resources you have is a meaningful planning step.
Healthcare in retirement is not something you set up once and forget. Building an annual review habit protects you from cost increases, coverage gaps, and plan changes that may not be in your best interest.
• Every October, review your Medicare coverage during Open Enrollment Compare your current plan’s premiums, drug formulary, network, and out-of-pocket costs against alternatives. Even if you decide to stay with your current plan, the review ensures you made an active choice.
• At the start of each year, confirm your prescriptions are still covered Formularies change January 1. Before your first refill of the year, confirm that your medications are still on your plan’s covered list and at what cost tier.
• When your health changes, revisit your coverage A new diagnosis, a new medication, or a change in how often you see specialists can make your current plan less optimal. Any significant health change is a good reason to review whether your coverage still fits.
Healthcare coverage in retirement touches your retiree plan, Medicare, and potentially Medicaid — and every plan has its own rules. For questions specific to your coverage:
• Contact your Benefits Center for retiree health plan questions Your Benefits Center is the authoritative source for how your specific retiree health plan works — what it covers, how it coordinates with Medicare, what your out-of-pocket maximums are, and what services require prior authorization.
• Use Medicare.gov for Medicare questions The official Medicare website and 1-800-MEDICARE offer comparison tools, plan information, and direct answers to Medicare questions.
• Consider professional guidance for long-term care planning Long-term care planning involves complex financial, insurance, and family decisions. If you are considering long-term care insurance or want to understand your options, a qualified financial planner through Financial Essentials 4 Life (FE4L) can help you think through what makes sense for your situation.
Scenario: Karen is 71 and has been on Medicare Advantage for six years. She takes three regular medications. During Open Enrollment in October, she almost skips the annual review — but her daughter encourages her to compare plans. She discovers that one of her medications has moved to a higher cost tier under her current plan, which would add about $80 per month to her costs.
Outcome: She switches to a different Medicare Advantage plan that covers all three medications at the lower tier. The switch saves her nearly $1,000 over the year. The annual review took about 45 minutes.
Lesson learned: An annual Medicare review is not extra work — it’s a practical step that can save hundreds or thousands of dollars per year.
Skipping the annual Medicare Open Enrollment review.
Why this happens: Drug formularies, networks, and premiums change every year. Staying with a plan without reviewing it can mean paying more than necessary or losing coverage for medications you rely on.
Better approach: Each October, use Medicare’s Plan Finder at medicare.gov to compare your current plan against alternatives before Open Enrollment closes.
Assuming that Medicare or a retiree plan covers dental and vision care.
Why this happens: Original Medicare specifically excludes routine dental, vision, and hearing. Retiree plans vary. Being surprised by the full cost of dental work or hearing aids can strain a retirement budget.
Better approach: Verify what your specific coverage includes for dental, vision, and hearing. Budget for expected out-of-pocket costs regardless.
Postponing long-term care planning until a health crisis forces the issue.
Why this happens: Long-term care insurance becomes significantly more expensive as you age, and you may be denied coverage after a health event. Decisions made in a crisis are rarely optimal.
Better approach: Have a conversation about long-term care planning well before it becomes urgent. Even a basic plan — savings reserve, family discussion, insurance exploration — is better than no plan.
When does Medicare’s annual Open Enrollment period take place?
Does Original Medicare cover routine dental and vision care?
Does Medicare cover ongoing long-term custodial care, such as help with daily activities in a nursing home?
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