- Home
- Retirement
- Medicare
Attempting to conquer Medicare without a plan is risky. The safest route requires a thorough understanding of your options and never leaves decisions to chance.
By
Cathy DeWitt Dunn, CDFA®, FRC®
published
13 February 2026
in Features
When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works.
- Copy link
- X
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Contact me with news and offers from other Future brands Receive email from us on behalf of our trusted partners or sponsors By submitting your information you agree to the Terms & Conditions and Privacy Policy and are aged 16 or over.You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Signup +
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Signup +
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Signup +
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Signup +
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Signup +
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Signup +
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Signup +
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Signup +
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Signup + An account already exists for this email address, please log in. Subscribe to our newsletter
If you're in or nearing retirement, you're probably familiar with Medicare, the U.S. government's health care program for those age 65 and older.
More than 66 million Americans get their health coverage from Medicare.
It's one of the most important pieces of retirement planning, yet also one of the most confusing. For many retirees, selecting Medicare coverage is a decision that can significantly impact their income, taxes and overall financial security.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
CLICK FOR FREE ISSUE
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Sign upWhy is Medicare such a hot-button topic?
Starting January 1, 2026, a new six-year pilot program from the Centers for Medicare and Medicaid Services (CMS) aims to improve efficiency, reduce fraud and help patients receive the right care more quickly.
However, some worry that it could create more confusion and red tape for patients in the six experimental states, including Texas, as they try to understand how their care will be handled.
In the past, there has been limited pre-approval for beneficiaries seeking services for original Medicare. Now, through the Wasteful and Inappropriate Service Reduction (WISeR) model, beneficiaries will undergo a review process that uses artificial intelligence in conjunction with human review before certain medical services, procedures and devices are covered.
According to the National Library of Medicine, waste in health care represents 25% of all health care spending in the United States. So, while patients may have to wait longer when it comes to getting procedures approved and completed, it could help them and providers avoid unnecessary or inappropriate care and keep costs down.
These and other changes have made Medicare a hot-button topic. Many people are surprised by how complex the system really is. That's why it's so important to understand all of your options, both for your health and your wallet.
About Adviser Intel
The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
Know the cost of Medicare
When people think about Medicare, they often focus on health care — what's covered and what isn't. But what they fail to consider is the financial side.
Medicare premiums are directly tied to your income, so one of the challenges is determining the best time to enroll. Your timing and financial setup can have lasting effects on your premium costs.
For example, if you're still working and plan to retire soon, your Medicare premiums may initially be based on your highest earning years.
If you won't be making what you have made over the past couple of years, there's a form you can file to have your premiums adjusted once your income drops, but many people don't know that and end up overpaying.
Take a look at your Social Security benefits, 401(k) and other retirement account withdrawals, and any other income sources to understand how each will affect your premiums and tax situation.
Know when to enroll
It's a really complex system, but the bottom line is to make sure you coordinate your Medicare enrollment with your retirement income plan.
People frequently get confused about when to enroll in Medicare, and failing to do so on time can have serious consequences on your health care and finances for years to come.
If you are about to turn 65, you can enroll anywhere from three months before to three months after your birth month. But don't miss the deadline. If you miss the initial enrollment period, you could end up paying more expensive premiums for the rest of your life.
Don't assume Medicare covers everything
One of the biggest misconceptions about Medicare is that it will cover all your health care needs. Traditional Medicare (Parts A and B) can come with high out-of-pocket costs, including deductibles and coinsurance. It also doesn't cover dental care, vision, hearing aids and other long-term care needs.
If people are seeking more coverage, a Medicare Advantage plan can help cover some of those out-of-pocket expenses.
A health savings account (HSA) can also be used to help supplement the costs. However, this is also an area where retirees can get into trouble. Once you enroll in Medicare, you are no longer allowed to contribute to your HSA, and you must stop contributing up to six months before applying for Medicare. Missing this deadline can result in penalties or having to pay back any excess contributions.
Medicare also doesn't cover long-term care, such as assisted living or nursing homes. If you require an extended stay at one of these facilities, you will need to come up with the funds to help fill the coverage gap.
It's important to have a long-term care strategy, whether that's through an annuity or traditional insurance. A typical long-term care insurance policy can help cover the costs of adult day care, respite care, stays in Alzheimer's special care facilities, assisted living facilities, nursing homes and hospices.
Understanding and planning for coverage gaps early can help retirees protect their hard-earned savings and ensure they're prepared for any future health challenges.
Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.
Reevaluate prescription coverage every year
Medicare is not a set-and-forget plan. Just as your health needs change, so do plan costs, provider networks, drug coverage and benefits.
Once you're enrolled, you should be reviewing your plan every year and use the open enrollment period to make adjustments.
Prescription drug coverage can be one of the most expensive parts of healthcare in retirement. If you choose original Medicare, you need to enroll separately in Part D, which helps pay for brand-name and generic drugs.
Even if you don't need prescription drugs now, it's recommended to get coverage upfront to avoid paying a late enrollment penalty if you join later.
Reviewing your plan options every year can help you find better benefits, lower premiums or a more comprehensive coverage for your medical needs. This is also a good time to meet with your financial professional, who can help you enroll in the right plan for you.
Your health is valuable: Consult a professional
Medicare decisions should never be made on a whim — these are lifelong decisions that could affect your entire financial plan, and changing them can be costly or next to impossible. That's why working with a financial professional who understands your individual situation is so valuable.
The late stages of your career and into retirement are not the time to take chances with the money you've worked your whole life to earn.
Get informed, review your plan and make sure you're set up for success in the years to come. Because when it comes to your health care and financial future, informed decisions are the best medicine.
Related Content
- Medicare Basics: 12 Things You Need to Know
- What You Will Pay for Medicare in 2026
- 9 Medicare Changes to Watch in 2026
- How to Appeal the IRMAA for Medicare Parts B and D
- 11 Costly Medicare Mistakes You Should Avoid Making
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
TOPICS Adviser Intel Get Kiplinger Today newsletter — freeContact me with news and offers from other Future brandsReceive email from us on behalf of our trusted partners or sponsorsBy submitting your information you agree to the Terms & Conditions and Privacy Policy and are aged 16 or over.
Cathy DeWitt Dunn, CDFA®, FRC®Social Links NavigationPresident and CEO, DeWitt & Dunn Financial ServicesWith more than 20 years of experience guiding clients through the complexities of retirement planning, Cathy DeWitt Dunn is a trusted financial expert and founder of her own successful firm. As a Certified Divorce Financial Analyst (CDFA®) and Federal Retirement Consultant (FRC®), Cathy brings specialized expertise to help women and federal employees navigate their financial futures with confidence.
Latest-
Why Charitable Remainder Trusts Team With Donor-Advised Funds
If a charitable remainder trust puts too many constraints on your family's charitable giving, consider combining it with a donor-advised fund for more control.
-
The Illinois 'Cliff Tax': How A Single Dollar Can Push You Over
Illinois' estate tax "threshold" (rather than "exemption") can surprise families, but proactive planning can help preserve more for heirs and charitable causes.
-
AI Unwind Takes 2% Off the Nasdaq: Stock Market Today
Markets are paying more and more attention to hyperscalers' plans to spend more and more money on artificial intelligence.
-
For More Flexible Giving, Consider Combining a Charitable Remainder Trust With a Donor-Advised Fund
If a charitable remainder trust puts too many constraints on your family's charitable giving, consider combining it with a donor-advised fund for more control.
-
The Illinois 'Cliff Tax': A Single Dollar Could Cost Families Hundreds of Thousands
Illinois' estate tax "threshold" (rather than "exemption") can surprise families, but proactive planning can help preserve more for heirs and charitable causes.
-
AI Unwind Takes 2% Off the Nasdaq: Stock Market Today
Markets are paying more and more attention to hyperscalers' plans to spend more and more money on artificial intelligence.
-
Big Change Coming to the Federal Reserve
The Lette A new chairman of the Federal Reserve has been named. What will this mean for the economy?
-
What to Expect from the January CPI Report
The January CPI report will be released Friday morning. Here's what economists expect the inflation data to show.
-
Why 'Locking' Your Social Security Number Is the New Credit Freeze
Here is how to keep your Social Security number private in an age of aggressive cybercriminals.
-
These Thoughtful Retirement Planning Steps Help Protect the Life You Want in Retirement
This kind of planning focuses on the intentional design of your estate, philanthropy and long-term care protection.
-
Fixed Indexed Annuities and Bonds: The Perfect Match as Interest Rates Inch Lower?
The prospect of more interest rate cuts has investors wondering how to enhance the bond portion of their portfolio. A fixed indexed annuity could be the answer.
