If you’re nearing retirement, you’re likely thinking that Medicare will be your primary health insurance once you turn 65. While this is a vital program, the truth is that Medicare doesn’t cover everything.

And even for things that are covered by Medicare, out-of-pocket costs can add up to thousands per year. And worse, some of the biggest expenses like long-term nursing home care have very limited coverage or no coverage at all.

For people who are about to retire, if you understand these gaps now, then you will have time to plan, budget, and choose the right coverage or supplemental care to protect you during retirement.

This article breaks down exactly what Original Medicare (Parts A and B) leaves you stuck paying for in 2026. This blog will also provide real-world cost examples as well as practical steps to ensure the right coverage for you and help protect your retirement savings from extreme expenses.

Medicare Basics: What It Does (and Doesn’t) Cover

First, it’s important to note that Medicare has four main parts. During this blog, the terms Medicare and traditional/original Medicare will refer to Parts A and B. This combination is called traditional because it is the basic program as it was originally launched. Now there are multiple different parts.

Part A

Hospital Insurance (inpatient stays, skilled nursing facility care for a limited time, hospice)

One of the two main parts of Original Medicare, this traditionally covers hospital stays and other inpatient care. This part comes with deductibles and coinsurance.

For a nursing home stay (one of the biggest possible expenses in retirement), Medicare only helps pay for the first 100 days. After that, if the stay is longer, you must pay 100% of the costs.

Part B

Medical Insurance (doctor visits, outpatient care, preventive services, durable medical equipment)

The second part of Original Medicare, this is mainly for outpatient and preventive care. This covers things like doctor visits and clinic visits.

This comes with a small monthly premium and annual deductible, but the big concern is the uncapped 20% coinsurance you have to pay on all medical care.

Part C

This part is also called Medicare Advantage. It is an alternative to Original Medicare that bundles A and B and often D with extra benefits.

These plans must cover at least everything Original Medicare covers.

Many Part C plans offer extras like Part D, vision care, dental care, etc.

Part D

This is prescription drug coverage, optional but essential for many. This helps pay for drugs, vaccines, and some insulin products. Original Medicare often doesn’t cover drugs, so Part D may be essential for you.

This part has low premiums, deductibles, and out-of-pocket maximums that will protect you from high costs.

Original Medicare has no annual out-of-pocket maximum, so costs can have no cap and can keep adding up. Medicare Advantage plans do have an out-of-pocket cap, around $9,000 for in-network care in 2026, but it comes with networks and other trade-offs.

The Major Coverage Gaps in 2026

Here’s what Original Medicare (Parts A and B) doesn’t pay for, and these are the expenses that often catch retirees by surprise:

Long-term / Custodial Care

Medicare only covers short-term skilled nursing, only helping to pay for up to 100 days. Daily coinsurance kicks in on days 21–100, and you must pay $217 a day. After day 101, you pay for all expenses.

It does not cover custodial care like help with activities of daily living (things such as eating, bathing, dressing, etc.).

Long-term nursing home care is one of the biggest cost threats to retirement savings, as nursing home care can cost $130,000 a year. This can rapidly eat away at retirement savings if you have no coverage for it.

Routine Dental Care

Cleanings, fillings, extractions, root canals, crowns, dentures, and implants aren’t covered.

Medicare only pays for dental services that are medically necessary as part of a larger procedure, like jaw reconstruction.

Routine Vision Care

Eye exams for prescription glasses, eyeglasses, and contact lenses are not covered — except one pair of glasses after cataract surgery. Medical eye conditions like glaucoma or macular degeneration are covered, however.

Hearing Aids and Exams

Routine hearing exams and hearing aids (which can cost up to $6,000 per pair) are not covered. Medicare may pay for diagnostic hearing tests if medically necessary.

Most Prescription Drugs

Parts A and B do not cover outpatient drugs you take home. You need a separate Part D plan. However, even with Part D, you’ll face deductibles up to $615 in 2026 and coinsurance until you hit the $2,100 out-of-pocket cap.

Copayments, Coinsurance, and Deductibles

You still have to pay even with Medicare coverage.

• Part A Deductible — $1,736 per hospital stay 
• Part A Coinsurance (Hospital stays) — $434 a day for days 61 through 90. Days 91–150 it is $868 a day (using Lifetime Reserve days). After day 151, you pay 100% of hospital costs. 
• Part B Deductible — $283 per year 
• Part B Coinsurance — 20% of the Medicare-approved amount for most services. This amount is uncapped, leaving you on the hook for paying 20% of an unlimited amount of medical costs.

Other Gaps

Care outside the United States isn’t covered — no medical tourism.

If the provider has opted out of Medicare, then you’re not covered.

Also, many alternative therapies aren’t covered, like chiropractic or acupuncture care.

How to Bridge the Gaps: Your Options

During your enrollment period, you have choices to help fill in any gaps you might have. Some gap coverages are:

Medigap

This is Medicare supplement insurance. These policies fill the cost-sharing gaps in Original Medicare, like helping to pay for nursing home stays longer than 100 days, and paying for the 20% coinsurance on Part B.

Popular plans like G or N cover most of what Original Medicare leaves behind. However, they don’t usually cover dental, vision, or hearing. Premiums vary by age, location, and health.

Standalone Policies

You can buy separate dental, vision, and hearing plans. These premiums are often low, from $10–$60 a month.

You may be tempted to purchase long-term care policies, but in general these don’t provide the benefit that other options may.

HSA

If you’re still working and have a high-deductible health plan, you can max out an HSA now. Funds roll over tax-free and can pay for Medicare premiums and many out-of-pocket costs later.

Practical Tips for Pre-Retirees

• Run the numbers — use Medicare.gov plan finder and cost estimator. Factor in your health history and family longevity. 
• Enroll on time — sign up for Part A and B during your Initial Enrollment Period to avoid penalties. 
• Compare the different gap policies and options you have during this period. 
• Talk to a financial advisor to get help on this. An advisor can help clarify questions and figure out where the greatest coverage needs are.

Importantly, exercise frequently and eat healthy. The best way to stay healthy in retirement is to build those habits now.

Bottom Line

Medicare is excellent coverage for hospital stays and doctor visits, but it was never designed to be a complete retirement health plan. The gaps in dental, vision, nursing home stays, and others can drain savings quickly if you’re not prepared.

Retirement is about enjoying life, not worrying about surprise medical bills. With the right coverage in place, you’ll be ready when Medicare covers you.

The good news? You can research this now, compare your options, and build a strategy that fits your budget and needs. Of course, you can also reach out to your financial advisor (Scott Hamilton is great at this stuff).

Let Us Help You Plan Your Retirement Withdrawal Strategy

At Hamilton Financial Planning, LLC, we see medical care planning as an ongoing process, not just a one-time choice. Our Medicare strategies are built to support your bigger financial goals and help you manage costs, savings, and your health.

If you want to improve your medical expense strategy or understand how your strategies today affect your future, we’re here to help at every step.

You can schedule a free introductory meeting online, or reach out to us at 512-261-0808 or scott@hamiltonfinancialplanning.com.

 

 

About Scott

Scott Hamilton is founder and chief financial officer at Hamilton Financial Planning, a wealth management firm that specializes in providing comprehensive financial planning for retirees. With over 20 years of experience in the financial industry, and having completed over 250 financial plans for retirees across all industries, but mostly the oil and gas industry, Scott is passionate about providing his clients with the tools and insight they need to achieve their financial goals. He has a Bachelor of Business Administration in finance from Texas State University and an MBA in international finance from Pepperdine University. Scott has also been happily married to his wife, Gayle, for over 25 years. To learn more about Scott, connect with him on LinkedIn.