You Have Medicare. Who Pays the Rest?

November 6, 2026
Written by Troy Sharpe CFP®, CPWA®, CTS®, Founder and CEO
Reviewed/Updated: November 2026 

 

Medicare can cover a significant portion of healthcare in retirement, but it does not cover every medical or care-related expense. Retirees may still need to budget for Medicare premiums, prescription drugs, deductibles and other out-of-pocket costs, along with expenses that Original Medicare generally does not cover, such as most routine dental care, hearing aids and long-term custodial care.
In this video and transcript, Troy Sharpe uses the hypothetical example of Linda, a 68-year-old retiree with Original Medicare, a Medicare supplement policy and prescription drug coverage, to show how an unexpected healthcare expense can affect more than a medical budget. Where the money comes from can also affect IRA withdrawals, taxes, future Medicare premiums and other retirement goals.
The larger lesson is that healthcare planning in retirement is not simply about choosing Medicare coverage. It is about understanding what your coverage will pay, identifying expenses you may still have to fund yourself, and deciding in advance where that money will come from.

Quick Answer: What Doesn’t Medicare Cover in Retirement?

Original Medicare does not pay for every healthcare expense a retiree may face. Depending on your coverage, you may still be responsible for premiums, deductibles, coinsurance, prescription drug expenses and other out-of-pocket costs. Original Medicare also generally does not cover most routine dental care, hearing aids or long-term custodial care.
That means Medicare eligibility at age 65 does not eliminate the need to budget for healthcare throughout retirement. Your actual costs will depend on your health, prescriptions, Medicare coverage, supplemental coverage, income and the types of care you eventually need.

What This Video Covers

This video explains how healthcare costs can interact with the rest of a retirement plan. Using Linda’s hypothetical $6,000 dental bill, Troy compares paying an uncovered healthcare expense from a traditional IRA with paying it from money that had already been set aside for future healthcare costs.
The example also demonstrates why the source of the money matters. An additional traditional IRA withdrawal can create taxable income and, for someone near an applicable Medicare income threshold, may also affect future Medicare Part B and Part D premiums.
The discussion then moves beyond occasional medical bills to a potentially much larger retirement risk: needing ongoing help or long-term custodial care that Medicare generally does not cover.

Key Takeaways

  • Medicare does not mean that all healthcare expenses are covered in retirement.
  • Original Medicare generally does not cover most routine dental care or hearing aids, while Medicare Advantage benefits can vary by plan.
  • Fidelity’s 2026 estimate cited in the video puts lifetime healthcare expenses at about $185,000 for one person retiring at age 65, but that estimate is not a prediction of any individual retiree’s costs.
  • The Fidelity estimate does not include most dental care or long-term care.
  • An unexpected healthcare bill can affect other retirement decisions even when the retiree technically has enough money to pay it.
  • Taking additional money from a traditional IRA can create additional taxable income and may have other downstream consequences.
  • Setting aside money for future healthcare expenses can give retirees another source to consider when an uncovered bill arrives.
  • Healthcare expenses before age 65 should be planned separately from Medicare-era expenses.
  • Long-term custodial care presents a different planning challenge because Medicare generally does not cover indefinite assistance with everyday activities.
  • Married couples should consider the financial needs of both the person receiving care and the spouse who still needs income and financial security.
  • Single retirees may need to plan earlier for paid assistance because many tasks a spouse might otherwise perform may eventually have to be outsourced.

Who This Is For

This video is especially relevant if you are approaching age 65 and preparing to enroll in Medicare, already enrolled in Medicare and trying to understand your potential out-of-pocket costs, or building a retirement income plan that needs to account for future healthcare expenses.
It may also be useful if you are deciding how much money to keep outside retirement accounts, considering how future IRA withdrawals could affect taxes or Medicare premiums, thinking about long-term care, or planning for retirement as a single person without a spouse who may be available to provide unpaid assistance.

Three Healthcare Questions to Answer Before Retirement

A useful healthcare plan should go beyond estimating an annual insurance premium. Start by asking three questions:
  1. What healthcare costs will we pay regularly? Consider Medicare premiums, supplemental coverage, prescription coverage and expected routine out-of-pocket expenses.
  2. Where will the money come from when Medicare does not cover an expense? Possible sources could include cash reserves, taxable investments, an IRA or other retirement assets.
  3. What happens financially if one of us needs ongoing care? For couples, consider both the cost of care and the financial security of the other spouse. If you are single, consider who could provide help and how you would pay for assistance.

About the Author

Troy Sharpe, CFP®, CPWA®, CTS®, is the Founder and CEO of Oak Harvest Financial Group. He created Oak Harvest’s Retirement Success Plan, a planning process designed to coordinate investments, retirement income, taxes, healthcare and estate planning into a comprehensive retirement strategy.
Troy is a CERTIFIED FINANCIAL PLANNER™ professional, Certified Private Wealth Advisor® designee and Certified Tax Specialist®. He regularly provides retirement education through the Oak Harvest Financial Group YouTube channel and hosts The Retirement Income Show®.

 

Transcript

Linda is 68. She has original Medicare, so part A and Part B, a Medicare supplement policy, and prescription drug coverage. But then her dentist tells her that she needs several thousand dollars of work. Well, who pays?
For most routine dental care, Medicare doesn’t, and the supplement doesn’t also. So Linda planned ahead. She bought a supplement policy, supplemental policy, but she’s still stuck paying this bill herself. So in your situation, what will you still have to pay for after Medicare kicks in?
And how do you keep those costs from crowding out the retirement that you want? Fidelity’s 2026 estimate puts healthcare costs at about $185,000 for one person retiring at age 65. And that’s per person. If you’re married, you could be looking at twice that amount.
So that’s an estimate over your entire retirement, not a bill that becomes due at 65 or a prediction of what you’ll personally spend. It does include Medicare premiums and other out-of-pocket costs, but it leaves out most dental care. And a lot of people aren’t aware of this, but long-term care.
So if you’re starting to look at Medicare, this is worth understanding before you choose your coverage. You’re not just choosing an insurance policy, you’re actually figuring out how much of your retirement income is still going to have to go toward medical expenses, even how much of your social security check you get to keep, because Part B premiums and any surcharges, additional surcharges, are deducted from your monthly check.

What Medicare and Medigap Still Leave You Paying

So to begin to understand how Medicare works. Let’s start with the bills that you can see coming. Then we’ll look at the ones that change your plans.
Linda’s premiums are easy to recognize. She has Medicare, her supplemental policy, and her prescription drug plan. Those are regular expenses that she can put in her monthly budget.
Original Medicare, Part A and Part B, helps cover hospital care, doctor visits, and medically necessary outpatient care. Her supplement helps with certain remaining costs for services covered under Medicare, but it doesn’t turn an uncovered dental bill. Into a covered expense.
So the same problem can show up with hearing aids. Original Medicare doesn’t cover hit hearing aids, and Medigap generally doesn’t either. Some Medicare Advantage plans offer dental and hearing benefits, but those benefits, the limits, and the providers vary.
A lot of this is done at the state level, so you need to know what your particular plan will actually pay. Now let’s make this about Linda’s retirement, not just her insurance.

Linda’s $6,000 Dental Bill

So Linda’s a hypothetical example here, and we’re gonna give her a $6,000 dental bill, as I previously said. But she also has a trip with her husband and grandchildren planned during the same year. She can pay the dentist, but now she’s wondering, should we cancel the trip?
You know, we can always go another time. I don’t want all of these expenses to incur all at once. And that’s exactly what I don’t want you to miss in retirement.
See, Linda’s not really asking whether she can afford the dentist. She’s trying to decide whether paying the dentist means giving up something that she was really looking forward to. Before canceling anything, let’s compare two ways that she could pay this bill.

Paying the Bill From an IRA

First, she could take money out of her traditional IRA. For this illustration, we’re gonna assume every dollar she withdraws is taxable at a 22% federal rate, no state tax or other tax effects. To have $6,000 left to pay that bill after tax, she needs to withdraw about $7,700.
So it’s the same dental bill, but now it’s taking roughly $1,700 more out of that account to cover the tax. And that’s $1,700 additionally that you won’t have to grow and compound for the rest of retirement for future bills, medical concerns, or other needs. So that’s why the I’ll just take it out of my IRA thought process really deserves a closer look.

How an IRA Withdrawal Can Affect Medicare Premiums

And there’s another potential consequence. If you’re near a Medicare income threshold, an extra taxable IRA withdrawal could push you over it and raise your Part B and Part D premiums, generally two years later, depending on your income.
Now, Linda has another option in our example. When she and her husband built their retirement income plan, they took some money and they set it aside and invested it over time, specifically designed to help pay for healthcare bills their coverage wouldn’t cover later in life. It’s not inside the IRA, so it’s non-qualified money.
And they kept it separate from other money that’s used to generate income that they’re gonna use, for example, for this trip or other living expenses. So that’s where they get the money to pay the dentist. It’s already set aside and it’s been growing, so hopefully it’s worth more than than they put in many years ago.
But it doesn’t create any extra IRA withdrawal, not potentially no Irma surcharges or extra Medicare premium increases. And they get to take the trip without a guilty conscience because they’re spending so much more. Because they weren’t necessarily prepared to have these extra bills in retirement.

Why an Unplanned Bill Can Change Retirement Spending

So, to be clear, the extra $1,700 in tax was never what put the trip at risk. Linda could afford both. What put the trip at risk was the feeling.
An unplanned bill makes a lot of retirees pull back, even when they don’t need to. In the second scenario, because the bill was planned for, it didn’t feel like it was coming out of the trip budget. They’d already given this money a job.
So the dentist bill didn’t go away. It’s not like it wasn’t there. It’s just they had money that was designed, their expectations were properly set, and their cash reserves went down.
So they’ll just simply need to decide whether they want to rebuild their cash reserves, but it it didn’t cause them to cancel something that was important simply because the expense had nowhere to land.
Having a cash reserve like this isn’t the only right answer. Many people just do it with a non qualified investment account, mentally compartmentalizing the certain monies in that account that’s what it’s there for. Everyone has a little bit of a different flavor on how they like to handle this.
But the value is in comparing the choices before you actually react to the bill and being prepared to give yourself the opportunity to have choices so you can react to that bill differently.

Building Your Healthcare Budget Before Medicare

Now, how do you build your own healthcare budget? If you’re 63, don’t start with what you pay today for health insurance. That’s usually not what you’ll pay once you get on Medicare.
And if you plan to retire before 65, budget the years before Medicare separately, because one, they’re probably going to be a lot more expensive, but depending on your subsidies and what the cost of private coverage is, it can be quite expensive, oftentimes a couple thousand dollars a month, easy for a couple. The fidelity estimate doesn’t include those years at all. It all starts at age 65.
For the Medicare years, you start with what your coverage will cost your Part B premium, your Part D premium, your supplement, your Medicare Advantage Plan, your drug plan. Whatever combination or however you set up your Medicare, then you add your expected prescriptions and routine out-of-pocket costs.
And here’s the good news: you won’t have to go looking for these numbers. They’ll come looking for you. Sometime around age 63 or 64, your mailbox is gonna start to fill up, your phone’s gonna start ringing, and you’re gonna hear from more Medicare agents than you ever knew existed.
So put one of those calls to work. Next time one calls, don’t hang up. Grab a pen, and I want you to ask three things.

Questions to Ask a Medicare Agent

First, what would a supplement cost me at 65 where I live? Second, what would a drug plan cost with the prescriptions I currently take? And finally, what won’t this plan pay for that I may need?
Then ask one more, which companies do you represent? An agent may only be able to show you some of the plans where available. You write it all down.
They may not have access to other plans, so you probably want to talk to somebody else. But congratulations, that sales call just became the first iteration of your Medicare budget.
One rule though: if you didn’t make the call, don’t give out your Medicare number or social security number. And if you’d rather check the numbers yourself, Medicare.gov‘s PlanFinder lets you compare plans for free.

Planning for Costs Medicare Won’t Cover

Once you have those numbers, leave room for the bills your coverage won’t pay. You may not exactly know when you’ll need dental work or hearing aids. That doesn’t mean you have to treat the possibility as a complete surprise.
Finally, don’t add the entire fidelity estimate on top of the cost you’ve already budgeted. You’d count some expenses twice. It’s a national estimate based on original Medicare and prescription drug coverage. It’s not a quote for your particular plan.
There’s one more situation to consider, and it changes the question much more than a dental bill.

The Bigger Risk: Long-Term Care

What if Linda needs ongoing help, bathing, dressing, eating, transferring, toileting, just getting through the day, handling general activities?
Medicare generally doesn’t cover long-term custodial care, and it doesn’t cover the time period where you need someone to maybe help you with just stuff around the house prior to needing long-term custodial care or home health care. Certain skilled nursing and home health care services can be covered when certain requirements are met, but that’s not the same as paying indefinitely for everyday assistance. There are limitations to what Medicare will cover.
For Linda and her husband, we can’t just ask, can we pay for her care? We also have to ask, what does her husband still need to live on while we’re paying for that care? The household expenses don’t all disappear because one spouse needs help.
And if you’re single, the question changes again. In a marriage, a lot of help never shows up as a bill because one spouse can do the dishes, can clean the house, can organize and pay the bills, they can drive you to the doctor. But if you’re on your own, nobody’s quietly picking that up on your behalf.
You either do it yourself, you ask someone, or you pay someone.

Planning for Help Before Long-Term Care Begins

And that kind of help usually comes first, long before you need long-term custodial care, such as bathing or dressing or helping to eat, to toilet, to transfer, in and out of the bed. Medicare doesn’t pay for it.
And a long-term care insurance policy generally doesn’t start paying until you need help with the basic activities of daily living, such as bathing, dressing, eating, everything I’ve talked about. So you typically it’s going to be two out of six activities of daily living, or you’re you have a serious cognitive impairment.
So if you’re single, plan for paid help earlier. I wouldn’t be surprised if it costs you more than the per person average of a married couple. And plan for who this person is going to be that you’re going to reach out to.
Who are you going to call? Who has a key to your house? Who can pay your bills if you can’t?
Do you have financial powers of attorney? Do you have your estate plan? Do you have the documents in place that legally allow people to pay bills for you if you become incapacitated?
And if your family is part of the plan, who can realistically help and who do you trust to do these things? Maybe it’s somebody who lives nearby, maybe it’s a neighbor. Maybe you have to decide, okay, does that neighbor still work?
Are they able to be there all the time? So you have a lot of questions, a lot of different angles to think this through. And I know it’s something that none of us really ever like to think about.
So many times we don’t, but it’s the truth, and this is what we need to prepare for.

Married vs. Single Long-Term Care Planning

So however you plan for this, it could be through insurance, it could be through self-funding. Some type of combination of the both may make the most sense.
But if you’re married, consider both the person receiving the care and the spouse who still needs financial security after that spouse is done using care, done needing care, or possibly passes away. And if you’re single, decide who will be that help for you and what that help will cost before you need it.

Three Healthcare Questions to Answer Before Retirement

Okay, so three questions here. What healthcare cost will we pay regularly? Where would an a an occasional uncovered bill come from?
Your savings, your investments, your IRA, your non-IRA. And if one of us needs ongoing care, what happens to the other’s financial security? If you’re single, who would help?
And how would you pay for it? In our example, Linda’s answer wasn’t to give up the trip, it was to use money they’d already set aside for exactly this kind of bill and keep the trip and not be and not worry about it. You don’t have to predict every bill, but you do need a plan for what happens when one arrives.

Connecting Healthcare Costs to Your Retirement Plan

If you’d like help connecting your healthcare costs with your retirement income, your taxes, your withdrawal plan, your estate plan, your long-term care strategy, use the link below to schedule a complimentary visit with our team here at Oakarvest Financial Group.
And if you’re thinking, I’ll just take the money out of my IRA, well, I created another video that goes much more into depth of how that can actually torpedo into your Social Security income. So watch this next video that goes through why a $20,000 IRA withdrawal could potentially add $37,000 to your income.
I’ll show you a specific example of how an additional withdrawal can change your tax picture and why the account you choose deserves a closer look.

 

➡️ Schedule a complimentary retirement planning visit with Oak Harvest: https://click2retire.com/4iE70QD

 

Frequently Asked Questions

Does Medicare cover all healthcare costs in retirement?

No. Medicare can cover many hospital, physician and medically necessary healthcare services, but retirees can still have premiums, deductibles, coinsurance, prescription costs and expenses for services that their Medicare coverage does not pay.

Does Original Medicare cover dental care?

Original Medicare generally does not cover most routine dental care. That means expenses such as many dental procedures may need to be paid through other insurance or from the retiree’s own resources.

Does Medicare cover hearing aids?

Original Medicare generally does not cover hearing aids. Some Medicare Advantage plans may offer hearing benefits, but coverage, limits and participating providers can vary by plan.

Does Medigap cover dental and hearing expenses?

Medigap is primarily designed to help with certain costs left by Original Medicare for Medicare-covered services. It generally does not turn services that Original Medicare does not cover, such as routine dental care or hearing aids, into covered Medicare expenses.

How much could healthcare cost in retirement?

The video cites Fidelity’s 2026 estimate of approximately $185,000 in lifetime healthcare expenses for one person retiring at age 65. This is a national estimate, not a prediction of what any particular retiree will spend, and it should not simply be added on top of healthcare expenses already included in a retirement budget.

Is the $185,000 healthcare estimate per person or per couple?

The estimate cited in the video is for one person retiring at age 65. A married couple should not automatically treat twice that figure as a personalized forecast because each spouse’s health, longevity, coverage and healthcare use can differ.

Does the $185,000 estimate include long-term care?

No. The estimate discussed in the video does not include long-term care. That distinction is important because the need for ongoing assistance later in life can create a separate and potentially significant retirement expense.

Does Medicare pay for long-term care?

Medicare generally does not pay indefinitely for custodial long-term care or everyday assistance with activities such as bathing, dressing, eating and toileting. Certain skilled nursing or home healthcare services can be covered when Medicare’s requirements are met, but that is different from ongoing custodial care.

Can an IRA withdrawal affect Medicare premiums?

Potentially. Traditional IRA withdrawals generally increase taxable income. If an additional withdrawal causes income used for Medicare premium calculations to cross an applicable threshold, future Medicare Part B and Part D premiums may increase. The video notes that Medicare income-related surcharges generally use income from two years earlier.

Why does it matter which account pays an unexpected healthcare bill?

Different funding sources can create different tax consequences. In the video’s hypothetical example, Linda can either take additional taxable money from her traditional IRA or use non-qualified money that had already been earmarked for healthcare expenses. The appropriate choice depends on the retiree’s individual accounts, taxes, income and financial plan.

Should I set aside separate money for healthcare expenses in retirement?

There is no single funding strategy that is appropriate for everyone. The video illustrates one approach in which money is deliberately set aside for future healthcare expenses so that an unexpected bill has a predetermined source of funding. Other retirees may use cash reserves, taxable investments, retirement accounts, insurance or a combination of strategies.

How should I estimate my Medicare costs before retirement?

Start by estimating the premiums for the Medicare coverage you expect to use, including applicable Part B, prescription drug, Medicare supplement or Medicare Advantage costs. Then account for expected prescriptions and routine out-of-pocket expenses and leave room for expenses your coverage may not pay.

What should someone retiring before age 65 consider?

Healthcare expenses before Medicare eligibility should generally be modeled separately from Medicare-era expenses. Someone retiring before age 65 may need private or Marketplace coverage, and those costs can differ substantially from what the person will pay after transitioning to Medicare.

Is healthcare planning different for single retirees?

It can be. A married couple may have one spouse who can provide transportation, household assistance, bill paying or other unpaid help. A single retiree may eventually need to hire someone for tasks that never appear as an explicit expense when a spouse performs them.

What documents should be in place in case I become unable to manage my finances?

The transcript emphasizes planning for who could pay bills or handle financial matters if you become incapacitated. That can include considering financial powers of attorney, estate-planning documents and identifying trusted people who could realistically help when needed.

Bottom Line

Medicare is an important part of retirement healthcare, but Medicare enrollment does not make healthcare expenses disappear. Some costs remain predictable, some arrive unexpectedly, and others—particularly long-term care and ongoing assistance—can require a separate strategy.
The goal is not to predict every medical bill. It is to know what your coverage is designed to pay, identify the expenses that may remain your responsibility, and decide in advance where the money will come from when those expenses arrive.