Suze Orman Warns of Major Medicare Gap

Many people get health insurance through their employers. Once you retire, though, you’ll need a way to secure health coverage. And that’s where Medicare comes in.

Medicare eligibility generally begins at age 65. You can actually enroll in Medicare a few months before your 65th birthday to ensure that you have coverage available when you need it.

Once you’re signed up for Medicare, you’ll still need to pay for that coverage. Part A, which covers hospital care, is generally free for enrollees. But Part B, which covers outpatient care and diagnostics, comes with a premium. You’ll also need to pay for a Part D drug plan.

You might assume that aside from those premiums and copays as needed, you’ll be set with healthcare as far as Medicare goes. But financial guru Suze Orman warns of a huge Medicare gap you need to be aware of.

Medicare won’t pay for everything

You might assume that once you enroll in Medicare, it will cover all of your health-related needs. But as Orman warns, there are a number of key services Medicare will not pay for.

Dental care is a big one.

“Routine cleanings, x-rays, fillings, extractions, dentures, and implants are not covered,” Orman warns.

Orman does explain that some Medicare Advantage plans offer dental coverage. However, these plans aren’t suitable for everyone and can come with their own limits and costs.

If you stick with original Medicare, dental care is a service you might have to pay for out of pocket unless you buy your own coverage.

And it’s not just dental care Medicare won’t pay for. Medicare also will not cover the cost of eye exam, glasses, and hearing aids. These, too, can be large expenses for retirees.

How to cope with Medicare’s limited coverage

There are a couple of different ways you can work with Medicare’s limited coverage. First, Orman suggests buying a dental savings plan. It’s not insurance, but rather, a plan that gives you access to a network of dentists who offer substantial discounts on treatments.

Another option is to save well in a health savings account (HSA) during your working years and reserve all or most of that money for retirement, when your healthcare bills may be highest. You can dip into your HSA to cover the cost of dental care, eye exams, and more.

HSA funds get to grow tax-free. Withdrawals are also tax-free when used to pay for qualifying medical expenses, making them very useful for retirees who need help covering services Medicare won’t pay for.

If you aren’t able to contribute to an HSA during your working years because your health insurance plan is not compatible with one, an alternate route is to boost your IRA or 401(k) contributions. The nice thing about an HSA, though, is having dedicated funds for healthcare expenses.

All told, there’s a lot to know about Medicare before you enroll. You don’t want to get caught off guard by the many costs you might incur under Medicare, so it’s best to read up on the program ahead of retirement and learn what it entails.

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