Dave Ramsey, a personal finance expert, recently shared his thoughts on Medicare. He said the federal health care program can be confusing for retirees and those approaching retirement. “It was created by the government, so that might be your first clue.
And second, it’s just a lot to understand,” Ramsey noted. Medicare has several parts, each with its own coverage and costs. Original Medicare, which includes Parts A and B, covers hospital stays, outpatient services, and other medical needs deemed necessary.
However, it does not cover everything, such as long-term care, routine physicals, and dentures. Part D covers prescription medications but also has limitations. Those needing additional coverage can purchase Medicare Supplement Insurance (Medigap) or a Medicare Advantage Plan (Part C).
While Medicare is not mandatory, most people enroll at some point. Part A generally does not require a premium, but this depends on work history.
Medicare basics for retirees explained
In 2024, those with Part B paid an average monthly premium of $175.70. There are also yearly deductibles: $1,676 for Part A and $257 for Part B in 2025. Part D renews automatically, but Medigap and Part C require manual re-enrollment each year and have additional costs.
Ramsey pointed out that Medicare Advantage plans can be particularly confusing. They act similarly to private insurance, with network limitations. Sometimes, an Advantage plan may not cover specialist visits, even with a referral, leaving the enrollee to pay out of pocket.
With Donald Trump’s re-election, the future of Medicare remains uncertain. During his first term, Trump worked on increasing price transparency for individuals and healthcare organizations, which may continue. There is also a possibility that Medicare Advantage plans could become the default option under Project 2025, potentially leading to privatization of the program.
For now, current and future retirees should stay informed about their coverage options and costs. Navigating Medicare can be challenging, but understanding its basics is crucial for making the best healthcare decisions in retirement.
