Retirement should be a period to enjoy the fruits of your labor, not an age plagued with unexpected medical bills and incomprehensible insurance jargon. Under the Centers for Medicare & Medicaid Services, there are over 66 million Americans enrolled in Medicare through 2025.
Far too often, far too many retirees make costly errors because they don’t understand the system or ignore the fine print. Suze Orman, retirement activist and personal finance expert, believes Medicare is more than a “set and forget” proposition. Instead, she advises retirees to manage their healthcare choices the same way they would a portfolio of investments.
Suze has warned that Medicare confusion can destroy a retirement faster than a bad choice of stocks. Here are the 15 Medicare questions she says every retiree must understand, before it’s too late.
Medicare Is Not Free
Medicare seems like a golden ticket at age 65, but it’s not free. Part B premiums in 2025 average $185/month, with higher-income retirees paying more under the Income-Related Monthly Adjustment Amount (IRMAA). Suze Orman stresses that many people mistakenly assume Medicare covers all healthcare expenses, but it doesn’t.
You’ll face deductibles, copays, coinsurance, and non-covered services. Suze urges retirees to budget at least $7,000 annually just for uncovered expenses. “Treat Medicare like a mortgage,” she says. “You must factor it into your retirement budget.”
Omitting Part D Can Be a Costly Mistake
Suze frequently warns retirees not to omit Part D (prescription medication coverage), even if they are presently taking no drugs. The penalty for late enrollment grows quickly, 1% of the national base premium every month without credible drug coverage. Data from the Medicare Rights Center shows thousands of retirees face penalties that increase their premiums by 30% or more.
“Don’t bet on perfect health,” Suze cautions. “One diagnosis can turn into thousands in drug costs if you’re not covered.”
Missing the Initial Enrollment Period Leads to Permanent Penalties
The Medicare Initial Enrollment Period (IEP) spans seven months, three months before your 65th birthday, your birthday month, and three months after. Miss this window, and you’ll face late penalties, possible coverage gaps, and delayed benefits. The Social Security Administration estimates that over 750,000 Americans missed their IEP in 2022.
Suze describes the mistake as “a financial landmine,” especially since the Part B penalty adds 10% of your monthly premium for each year you are late. “Don’t rely on the government to send you reminders,” she says. “Mark your calendar and sign up on time.”
Medicare Doesn’t Cover Long-Term Care
Few retirees expect that Medicare doesn’t pay for long-term custodial care, only for short-term rehab or skilled nursing care following a hospitalization. According to Genworth’s 2024 Cost of Care Survey, the national average cost of a private nursing home room is now $9,872 per month.
Suze urges retirees to save in advance for long-term care with savings, long-term care insurance, or hybrid life policies. The biggest retirement savings drain isn’t investing, it’s paying for long-term care out-of-pocket,” she warns.
Medicare Advantage Plans Can Be Deceptive
Medicare Advantage (Part C) plans are widely promoted, offering $0 premiums and dental coverage. Suze, however, advises retirees to read the fine print. Most plans come with limited provider networks, higher out-of-pocket maximums, and pre-authorization for covered care.
According to a 2024 OIG report, 13% of Medicare Advantage denials were against Medicare coverage policy. “Don’t trade freedom for benefits,” Suze warns. “If you like choice and don’t want to beg for referrals to see specialists, traditional Medicare with a Medigap plan may be a better fit.”
Medigap Can Save You Thousands—If You Enroll on Time
Medigap policies fill the “gaps” in Original Medicare, covering costs like coinsurance and deductibles. Suze points out that the best time to buy a Medigap policy is during your 6-month Medigap Open Enrollment Period, the month you turn 65 and are enrolled in Part B.
After that, insurance companies can deny coverage or charge more based on pre-existing conditions in most states. “Medigap isn’t optional, it’s your financial safety net,” Suze insists.
Medicare Premiums Can Garnish Social Security Checks
Social Security recipients have Medicare Part B premiums deducted automatically. In 2025, this can take checks down by over $2,000 a year. IRMAA surcharges can significantly increase this reduction. Suze urges high-income retirees to use strategic tax planning to avoid such surcharges.
Tactics such as Roth conversions or Qualified Charitable Distributions (QCDs) could prove beneficial. “What you keep is more valuable than what you make,” she suggests. “Control your taxable income to protect your Social Security.”
Your Income Determines Your Premiums—Two Years Back
Medicare determines your IRMAA category based on your two-year income. A 2025 retiree pays based on their 2023 income. If retirement makes your income lower, you can appeal and ask for a lower premium by filing an SSA-44 form. Suze insists on an annual tax review so that retirees do not overpay.
“Medicare penalizes success behind the times,” Suze jokingly says, “unless you know how to push back with forms.”.
Medicare Will Not Cover Dental, Vision, or Hearing Aids
Traditional Medicare doesn’t cover dental cleanings, glasses, or hearing aids, which are necessities for retirees. The ADA estimates 70% of seniors lack dental coverage, with deteriorating oral health to prove it. Hearing aids cost approximately $4,600 per pair, and regular vision care costs hundreds of dollars annually.
Suze recommends setting aside money or paying for a supplemental policy. “Just because Medicare ignores it doesn’t mean you must,” she says. “These are necessities to quality of life, not luxuries.”
Choosing the Wrong Plan Can Tie You Up
Medicare Advantage enrollees often find it difficult to switch back to Original Medicare with Medigap if they’re past their first year. Many states allow underwriting after that point, meaning you could be denied coverage due to health conditions. Suze warns:
“Don’t be seduced by the ads. Once you give up your Medigap rights, you may not get them back.” She recommends sticking with Original Medicare unless you’re 100% sure an Advantage plan is the right fit for you in the long term.
Medicare Continuously Changes
Premiums, deductibles, and coverage rules change annually. The 2025 Medicare Trustees’ report warned that costs would increase due to inflation and an aging population. Suze recommends that retirees review their coverage each year during Open Enrollment Time (October 15–December 7).
“Being passive will cost you,” she says. “The drug plan or Advantage plan that served you well last year may not be the best value this year.”
Spousal Planning Affects Medicare Too
Couples forget that one’s income will affect both their IRMAA premiums. Joint filers can easily slide into higher brackets. Suze recommends staggered retirements and pro-activité tax measures to reduce the effect. According to Vanguard, married retirees lose $1,400 on average annually due to IRMAA brackets as a result of mismanagement. “
Your health plans are tied together with taxes—plan like a team,” says Suze.
Medicare Is Not Portable for Snowbirds
Medicare Advantage plans have local networks, so they may not be a good choice for snowbirds and retirees who travel or spend part of the year in another state. Suze prefers traditional Medicare, combined with Medigap, for the flexibility it offers. “Health care shouldn’t be location-limited,” she says. “Choose a plan that will work wherever you are, not where you were when you enrolled.”
You Can Appeal Medicare Decisions
Most retirees are unaware that they can appeal a Medicare denial. A 2024 CMS report indicated over 70% of appeals are granted at the initial level. Suze demands persistence: “Don’t let red tape steal your health or your savings. File the appeal. Fight for your benefits.”
She recommends writing down everything, requesting written notice, and consulting with Medicare counselors for assistance.
Retirement Planning Is Healthcare Planning
Suze wraps up every conversation regarding Medicare with the same mantra: “There is no retirement without health care.” Healthcare costs are now the second-largest post-retirement expense after housing. A 2024 T. Rowe Price study found that retirees who budget for health care save 30% in the long term due to improved coverage choices.
“It’s not optional,” Suze maintains. “Play Medicare as if it’s part of your portfolio—it’s just as valuable.”
Key Takeaways
Navigating Medicare unscathed is perhaps the most essential thing any retiree can do to safeguard their financial future. Suze Orman’s comments remind us that healthcare is not merely a medical issue, but a crucial fiscal choice that affects every part of retirement planning.
With continually rising costs and plan sophistication, passive enrollment can result in substantial losses. Retirees must approach Medicare choices with the same seriousness they would their investments or will planning. The distinction between the right and wrong plan might save tens of thousands of dollars over a retirement lifetime.
Remaining informed, reviewing coverage annually, and taking proactive steps to manage income and healthcare needs will help retirees avoid costly mistakes and achieve better health outcomes. As Suze summarized it, “There’s no financial freedom without healthcare security.”
Disclaimer: The Finance key does not provide and does not intend to provide financial, investment, tax, or legal advice. Information contained in this article is for informational and educational purposes only. This list is solely the author’s opinion based on research and publicly available information. The inclusion of links to third-party content is not an endorsement by The Finance Key of such content or services. Please do your due diligence and use your discretion.
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