Hard Truths on Medicare Dave Ramsey Thinks Every Retiree Should Know

Most people know that the U.S. healthcare system can be confusing, but Medicare can be particularly hard to navigate. This is especially true for retirees and soon-to-be retirees. From gaps in coverage to having to enroll even if they don’t want to, many elements of the federal healthcare program can be frustrating.

Learn More: Dave Ramsey Warns: This Common Habit Can Ruin Your Retirement

For You: 6 Things You Must Do When Your Savings Reach $50,000

Personal finance guru Dave Ramsey and the Ramsey Solutions team offered some thoughts on the Medicare program that might be useful to hear — even if you’re already enrolled. Here are some of the big ones.

Medicare Basics

It helps to start with the basics. Generally speaking, U.S. workers become eligible for Medicare when they turn 65. Those with a qualifying disability can enroll sooner.

Coverage

Original Medicare enrollment — Parts A and B — covers a host of things, including doctors’ services, inpatient hospital care and preventive services. Coverage is based on state and federal law, but the program generally covers services deemed “medically necessary.”

Original Medicare doesn’t cover everything, however. Common exclusions are long-term care, routine physicals and dentures.

There’s also Medicare Part D, which covers prescription medications and has its own coverage limitations. Those who need additional coverage can purchase Medicare Supplement Insurance (Medigap) or a Medicare Advantage Plan (Part C). This might cover things like vision, dental or hearing services.

Be Aware: 4 Retirement Expenses Boomers Didn’t Plan For — but Should Have

Enrollment and Cost

Medicare isn’t mandatory, but most people end up enrolling in it at some point. People with Part A generally don’t have to pay a premium, though it depends. Those with Part B paid an average premium of $175.70 a month in 2024. There’s also a yearly deductible — $1,676 for Part A and $257 for Part B in 2025.

Part D renews automatically, which is convenient, but it is an extra cost. Similarly, Medicap and Part C have additional costs, and you’ll have to re-enroll manually every year for these.

Why It’s Confusing

According to Dave Ramsey, even just the general rules of the program can be “confusing.” But why does he think so?

“Well, it was created by the government, so that might be your first clue,” the Ramsey Solutions post reads. “And second, it’s just a lot to understand.”

This goes for both Original Medicare and Medicare Advantage plans. Advantage plans act similarly to traditional health care plans: Both have limits in terms of their network providers.

Story Continues

Sometimes, an insurance company offering a Medicare Advantage plan won’t cover things like specialists — even if the enrollee was referred to them. This makes it so the enrollee must pay out of pocket for all associated costs of seeing that specialist.

Those who have Medicare Advantage must also pay a separate premium for both it and Medicare Part B. While an Advantage plan can be useful, as per Ramsey Solutions, they’re not the best option for everyone.

The Current Administration and Medicare

People have been concerned about the future of Medicare for years. Now, after the passing of the One Big Beautiful Bill Act (OBBBA), what will Trump’s Medicare cuts look like?

It’s estimated that the OBBBA could trigger $536 billion in Medicare cuts over a decade. The automatic cuts to Medicare result from an end-of-year sequester under the Statutory Pay-As-You-Go Act (PAYGO). Under PAYGO, the enacted bill will cause a $45 billion cut to Medicare in 2026, growing to $76 billion in 2034 and totaling $536 billion over the 2026 through 2034 period. It’s also estimated that Trump’s tax cuts could potentially hurt Medicare to the tune of $491 billion in cuts from 2027 to 2034 if Congress does not act to mitigate a 2010 law that forces across-the-board cuts to many federal programs once legislation increases the federal deficit.

Medicare’s future remains to be seen. For now, the best thing current and future retirees can do is keep an eye on their enrollment periods, coverage options and out-of-pocket costs amongst the growing convolution of both public and private insurance companies.

Caitlyn Moorhead contributed to the reporting for this article.

Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

More From GoBankingRates

Here's How Much You Need To Retire With a $100K Lifestyle 3 Investing Myths That Could Be Costing You Thousands in 2025 Two Money Tools Smart People Swear By for Financial Emergencies How to Get Guaranteed Growth On Your Money -- Without Risking Your Principal

This article originally appeared on GOBankingRates.com: Hard Truths on Medicare Dave Ramsey Thinks Every Retiree Should Know

View Comments