Many American workers planning for retirement have a number of concerns about whether they, when the time comes, will be sufficiently prepared for a financially secure future.
High on their list of worries is the cost of health care. Americans are eligible to enroll in Medicare at age 65, but the federal program does not cover all expenses.
Personal finance radio host and bestselling author Dave Ramsey acknowledges that, while Medicare provides essential health care services for seniors, it can be confusing — and he has a warning for those doing their best to anticipate their health care needs when they retire.
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Original Medicare covers hospital insurance in Part A, but deductibles are required. Outpatient and preventive costs are covered by Part B, which requires a monthly premium ($185 in 2025).Â
Medicare Advantage (known as Part C) is another option for seniors. It is covered by private insurance companies and generally covers the same services offered by Part A and Part B, plus others.Â
Medicare Part D covers prescription drugs, the cost of which varies greatly depending on an individual’s health care needs.
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But there are many health care services for which Americans are left to find ways to pay for on their own.
That is why Ramsey explains one important way people can avoid making a significant Medicare mistake.
A retired couple is seen holding hands and walking on a beach. Personal finance personality Dave Ramsey cautions people planning for retirement on an important Medicare problem to be aware of and then offers a solution.
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Ramsey has a Medicare warning and explains a solution
Ramsey both cautions and educates Americans planning for retirement about making the mistake of not purchasing individual coverage for some specific health care services.
“Let’s just say if Medicare were an outfit, it’d be a bikini,” Ramsey wrote. “A lot of what Medicare doesn’t cover is also what regular health insurance doesn’t cover. But there’s extra stuff too.”
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To get into the details, Ramsey lists some specific health services Original Medicare does not cover. These include long-term care, vision, dental (including dentures), hearing aids (including exams), cosmetic surgery and chiropractic care.
Many Medicare Advantage plans include some of these — such as vision, dental and hearing. Each plan is different, so it is important for people to first assess their health needs and then identify the plan they believe best suits them.
For these flexibility reasons, and because it often offers more services than Original Medicare, Medicare Advantage is growing in popularity.
In fact, there are currently about 67 million Americans enrolled in Medicare. In 2010, about 25% of those had chosen the Medicare Advantage option. Today, that number has grown to more than half.
For some health care services not covered by Medicare, including very important ones such as long-term care, people need to find their own private insurance for coverage.Â
Ramsey recommends making sure long-term care insurance is purchased by the time one turns 60 years old.
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Ramsey discusses the role of Medicare Supplemental Insurance
There is another way for enrollees to proactively get help paying for some expenses not covered by Medicare.
Medicare Supplemental Insurance (also known as Medigap) is an extra form of insurance that assists in paying some out-of-pocket costs that Original Medicare Part A and Part B do not cover. These expenses often include deductibles and copayments.Â
Ramsey believes that most people with Original Medicare care need supplemental insurance. He explains that if one chooses to get a Medigap plan, they will need to pay a premium for it as well as the required premium for Medicare Part B.
One can enroll in Medigap during one’s open enrollment period that begins the first month they turn 65.
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