Understanding Medicare: What it Covers, What it Doesn’t, and the Health Insurance Options Available to You in Retirement

Understanding Medicare: What it Covers, What it Doesn’t, and the Health Insurance Options Available to You in Retirement

Retirement—that thing you’ve diligently worked towards—is now right around the corner. You’ve worked hard, saved, and now you’re looking at your healthcare options. Suddenly, you’re facing a new financial maze: Medicare. Stay focused, and let’s decipher the enigma together.

First, take a deep breath. Understanding Medicare is a challenge for everyone, but with a little time and patience, you can navigate the ins and outs of it. Remember that it’s normal to feel overwhelmed – that’s why we’re here to guide you. You’re not the first retiree trying to make sense of Medicare, and you certainly won’t be the last.


 Medicare is a federal health insurance program primarily designed for individuals aged 65 and older, though it also covers some younger people with disabilities and certain diseases. It’s categorized into four parts: A, B, C, and D, each offering various types of coverage.

Medicare Part A is mainly your hospital insurance. It provides coverage for inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. However, it doesn’t cover long-term or custodial care.

Medicare Part B is medical insurance. It assists in paying for services from doctors and other health care providers, outpatient care, durable medical equipment, home health care, and many preventive services.

Medicare Part C (Medicare Advantage Plans) are optional plans offered by private insurance companies approved by Medicare. They roll Parts A and B into one and usually include Part D—often providing additional services, such as vision, hearing, and dental coverage, which Original Medicare doesn’t offer.

Medicare Part D, on the other hand, is prescription drug coverage offered through private insurance companies approved by Medicare. This program actively reduces the cost of prescription drugs.


 The question at the forefront of your mind might be: Should I enroll in Medicare or look for other health insurance options? The answer is more complex and depends on various factors, including your health status, income, and current insurance coverage.

Consider your health: Are you a frequent visitor to the doctor’s office? Do you have any chronic illnesses that require regular treatment or medication? If so, Medicare may be a good option for you.

Take into account your income and financial stability. While Medicare Part A is often premium-free (if you or your spouse paid Medicare taxes while working), Parts B and D do come with monthly premiums. Additionally, Medicare doesn’t cover everything—for instance, routine vision, hearing, dental care, and long-term care—so you may need to budget for additional costs or consider supplemental coverage.


 Your healthcare choices in retirement aren’t limited to Medicare. Here are several alternatives to explore based on your unique situation.

Continuing Private Insurance: If you had private insurance before retiring, you might be able to continue with your provider. Keep in mind that the cost of private insurance typically rises as you age, so you’ll need to weigh these increased costs against the benefits and coverage offered.

Employer-Sponsored Health Benefits: Some employers offer retiree health benefits, which can supplement Medicare or replace it entirely. These plans can be a lifeline, providing comprehensive care and peace of mind. However, always evaluate the costs and compare benefits before deciding.

Medicaid: Another avenue worth exploring is Medicaid, particularly for low-income seniors. Medicaid provides coverage for some of the health services that Medicare doesn’t cover and often includes prescription drug coverage.

Veterans Health Administration and Indian Health Service: For Veterans and Native Americans, there are special options such as the Veterans Health Administration and the Indian Health Service, respectively, both offering coverage for their specific groups.

High-Net-Worth Individual Options: For those with substantial wealth, premium private insurance or concierge medicine could be options. Concierge medicine provides a higher level of personalized care, often with 24/7 access to your physician, same or next-day appointments, and more time spent with your doctor during visits. But this added convenience and attention come at a price, typically a yearly retainer in addition to insurance premiums.

Long-Term Care Insurance: Medicare typically does not cover long-term care, such as nursing homes or assisted living facilities. Long-term care insurance can help cover these costs, but purchasing a policy before these services are needed is important, as premiums rise significantly with age and health issues.

Walk Through Your Options with Us

At Uncommon Cents Investing, we’re proud to provide our community with high-quality retirement planning and investing options. And because we understand the unique challenges facing high earners when it comes to retirement planning and healthcare, we can walk through all these complexities with you!  Contact us today for an introductory call!

Sheena Hanson, CFP® - Investment Advisor Representative and CCO

More About the Author: Sheena Hanson