3 Ways for Medicare Subscribers to Save Big on Healthcare in Retirement

It’s no secret that healthcare tends to be a huge expense for retirees. But as of 2023, Fidelity estimated that the average 65-year-old could expect to spend $157,500 on health care in retirement, even with Medicare coverage.

Meanwhile, according to the Federal Reserve, the typical 65-year-old has just $200,000 in retirement savings. So it’s easy to see why retirement health care has the potential to be such a burden.

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The good news, however, is that there are steps you can take to save money on healthcare as a Medicare subscriber. Here are some of the employees.

1. Register on time

New Medicare enrollees have an initial seven-month enrollment period. That period starts three months before the month you turn 65 and ends three months after that month.

If you don’t enroll during the initial enrollment window, you can enroll in Medicare later. But from there, you risk being penalized for signing up late. Specifically, the cost of Medicare Part B increases by 10% for each one-year period in which you are eligible for coverage but do not enroll.

Now, in some cases, you can delay your initial enrollment without penalty and enroll in Medicare during a special enrollment period. But you’ll need to make sure you qualify for one of these periods. You’ll generally qualify if you’re part of a group health plan with 20 or more employees, but it’s best to do your research and make sure your specific coverage or situation qualifies.

2. Use Medicare’s free preventive services

As a Medicare subscriber, you will be billed for a number of expenses. Every time you use Part B, for example, there will generally be coinsurance to cover in addition to your annual Part B deductible.

But Medicare enrollees are also entitled to a number of free services each year. These include health visits, vaccinations and certain screening exams. It’s worth looking into what no-cost benefits you’re eligible for, as staying on top of your health issues could lead to fewer future problems and expenses.

3. Get Medigap coverage

Your out-of-pocket costs have the potential to be substantial as a Medicare subscriber. This year, for example, you’re looking at a $1,632 deductible each time you’re admitted to the hospital as an inpatient.

That’s why buying supplemental insurance, also known as Medigap, is a good idea. A Medigap plan could pick up the tab for some of the costs you would otherwise face under your Medicare coverage.

The initial Medigap enrollment window is six months long and begins the first month you have Medicare Part B coverage and are 65 or older. It pays to sign up during this time because you can’t be denied a Medigap plan because of pre-existing conditions. If you wait too long, you risk losing your Medigap coverage or paying more for it.

Healthcare has the potential to put a strain on your retirement budget — but it doesn’t have to. Make these essential Medicare moves to avoid financial stress you don’t deserve.