Suze Orman Highlights Medicare's $185,500 Healthcare Gap
Medicare provides health insurance for 70.5 million Americans, according to the Centers for Medicare and Medicaid Services, but it doesn’t cover all healthcare costs in retirement. Retirees might still have to pay premiums, deductibles and other out-of-pocket expenses, even with Medicare.
In a recent blog post, personal finance expert Suze Orman pointed to a Fidelity estimate that someone turning 65 in 2026 and enrolled in Original Medicare will need $185,500 to cover healthcare costs throughout retirement.
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In order to break it down further, here’s what Medicare covers, and what it doesn’t.
What Healthcare Costs Does Medicare Cover?
According to Orman, Medicare covers a large portion of medical expenses in retirement, but retirees will likely need to spend some of their income, as well.
Looking at data from Medicare.gov, Medicare is made up of several parts:
Part A: Helps with inpatient hospital stays, skilled nursing facility care, hospice care and certain home healthcare services.
Part B: Helps with doctor visits, outpatient care, medical equipment and preventative services.
Plan C: Also called Medicare Advantage, which provides Part A and Part B benefits through a private insurance company. Most also include prescription drug coverage and may offer other benefits such as dental, vision and hearing.
Part D: This separate plan helps pay for prescription drugs.
Original Medicare only includes Part A and Part B. However, you can join Part D separately. Medicare Advantage is an alternate option to Original Medicare. With Original Medicare, you can use an doctor or hospital that takes Medicare. With Medicare Advantage, you may need to use medical services in the plan’s network and get approval for certain drugs or services.
What Healthcare Costs Does Medicare Not Cover?
Medicare doesn’t pay for everything. Retirees may still have to pay for some services out of pocket. According to Medicare.gov, Original Medicare doesn’t cover:
Long-term care: Ongoing help with daily activities, including bathing, dressing and eating.
Dental: Routine dental exams, cleanings, fillings, extractions or dentures.
Vision: Eye exams for prescription glasses.
Hearing: Hearing aids or exams.
Even for covered services, beneficiaries may still be responsible for premiums, deductibles, copayments and coinsurance. For example. The Medicare Part B premium for 2026 is $202.90 per month, plus 20% of the cost of each Medicare-covered service or item after meeting the deductible, Medicare.gov stated.
Orman also pointed out that choosing Medicare Advantage instead of Original Medicare doesn’t remove these costs. Medicare Advantage may come with additional benefits, but beneficiaries still deal with deductibles and copayments.
Medicare Advantage has annual out-of-pocket limits for Part A and Part B, but it varies by plan. Original Medicare has no annual limit unless beneficiaries have supplemental coverage.
Orman stressed that neither Original Medicare nor Medicare Advantage is cost-free. She also encouraged Americans in their 30s, 40s and 50s to save as much as possible for retirement to help cover future healthcare expenses that Medicare won’t cover.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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