13 Health Care Cost Surprises That Can Sneak Up On You In Retirement

Americans face a financially challenging reality when entering retirement, as their healthcare risks rise alongside their medical costs. According to a study by the Centers for Disease Control and Prevention (CDC), 93% of American adults aged 65 and older were found to have at least one chronic condition, a dramatically higher proportion than the roughly 60% of those aged between 18 and 34. Another study published in the International Journal of Emergency Medicine found that elderly individuals account for nearly 25% of trips to the emergency department, while only representing 14% of the population. These alarming stats offer only a snapshot of the elevated health risks faced by aging Americans.

This disproportionate need for healthcare places a heavier financial toll on seniors. Analyzing data from the Center for Retirement Research at Boston College, BlackRock reports individuals aged between 65 and 74 frequently pay around $6,500 annually in routine medical expenses. That number nearly doubles to $11,500 for retirees between 75 and 84. Once you reach 85+, those anticipated healthcare costs are liable to hit $20,000 yearly. Meanwhile, the Center for Retirement Research reports that the mean healthcare expenses sit around $21,400 when you're 65, before spiking to $36,600 when you're 90.

The Kaiser Family Foundation (KFF) reports that about 22% of 65+ adults in the U.S. have some form of medical debt, illustrating how easily uncovered and surprise medical costs can snowball into debt. Clearly, healthcare is one major expense you can't forget about when planning for retirement. To better prepare for financial stability in your golden years, beware of these 13 surprise healthcare expenses.

A revealing survey by eHealth shows that a stunning 75% of beneficiaries are confused by their Medicare plan, signaling a disconnect between the coverage retirees expect and what the plans actually provide. Arguably, one of the costliest blind spots among recipients is the unlimited out-of-pocket expenses for Original Medicare. Part A and Part B don't place any cap on what retirees may have to spend to cover gaps in their Medicare plans. Standard coverage only handles 80% of approved healthcare expenses. The other 20% is paid by recipients, and there's no ceiling to how high that 20% can rise. This potentially puts individuals on the hook for exorbitant healthcare costs.

Since its founding in 1965, Medicare has always been designed as a cost-sharing program, intended to balance the burden of medical costs between the American people and the government. There's been a consistent push to implement a maximum out-of-pocket limit through Original Medicare, but critics argue it would place an unsustainable financial load on the federal government. For now, the key to getting ahead of this surprise cost is supplemental coverage. Medigap is private insurance specifically created to protect retirees from this unlimited out-of-pocket vulnerability. Fortunately, Medicare Part D's out-of-pocket spending cap could save you some money in 2025.

In addition to more frequent check-ups and healthcare treatment, retirees require assistance from specialty devices. Under Medicare, these instruments are known as durable medical equipment (DME) and include everything from wheelchairs and canes to oxygen tanks and CPAP machines. More specifically, Medicare defines DME as medical equipment designed for repeat use. Retirees can only receive partial coverage for these often expensive devices when they're deemed medically necessary for use within their homes, and Medicare only covers this equipment within a limited scope.

Even when prescribed as medically necessary by a doctor, DME isn't completely covered by Medicare, either. Broadly speaking, retirees must still foot 20% of the bill after reaching their annual deductible. Furthermore, repairs on this equipment are only covered up until costs reach the item's original value. Still, recipients have to put up 20% of the repair costs if their deductible has been reached. According to a study by the National Institutes of Health, 35% of 70-year-old adults in the U.S. suffered from a mobility limitation. This number jumps to over half for those older than 85. Needing DME in retirement isn't guaranteed, but it's a surprise cost worth considering when planning your nest egg.

One of the telltale signs you're a member of the upper class in retirement is being charged extra by Medicare due to a high income. The Income-Related Monthly Adjustment Amount (IRMAA) refers to the extra costs some high-earning recipients must pay on top of their monthly Medicare premiums. Usually, these additional charges are only levied against those with Part B or Part D coverage, while Part A is usually left alone. To determine these charges, the Social Security Administration looks at income from two years ago. For example, 2025 Medicare recipients are considered eligible for IRMAA charges based on their 2023 income. If an individual's Modified Adjusted Gross Income (MAGI) was higher than $106,000, or $212,000 for joint filers, IRMAA fees might apply.

If you're even $1 over those thresholds, it could cost you over $1,000 per year. The Centers for Medicare & Medicaid Services (CMS) report that an individual filer who made over $106,000 could pay an additional $74 per month for Medicare Part B and $13.70 per month for Medicare Part D. That comes out to $1,052.40 yearly on top of their current medical expenses — and that figure only rises as income grows. The total IRMAA premium possible maxes out at over $6,300 annually. Unless you're comfortable paying these surcharges, the best way to avoid IRMAA fees is to taper off your income to come in below these thresholds or find other ways to lower your taxable income in advance of when you'll need to register for Medicare.

Another surprise healthcare expense that can sneak up on you in retirement is ongoing late-enrollment penalties. Many private and Marketplace plans apply hefty penalties to people who enroll past the deadline, so this cost isn't necessarily unforeseen. However, what many retirees don't realize is that Medicare late-enrollment penalties aren't a single expense. These fees are often applied on an ongoing basis until a retiree is successfully enrolled, effectively penalizing retirees for not having healthcare coverage.

If you enroll past the deadline for Part B, the penalty is severe. Every 12-month delay results in a 10% increase on your annual premium, for as long as you receive Medicare Part B. Delayed enrollment for Part A recipients imposes a similar 10% surcharge, but only lasts for double the number of years of the delay. Keep in mind that most retirees aren't required to pay premiums for Part A, thus the penalty is null. The consequences for delayed Part D enrollment take a different form. Late enrollees see their monthly premiums go up by 1% of the national base beneficiary premium for every month that enrollment was delayed, and this surcharge lasts through the duration of that individual's coverage. Avoid these hefty fines by researching the enrollment period of your desired Medicare coverage to ensure you sign up on time or find out if you're eligible for special enrollment periods.

Dental coverage is another surprise healthcare expense that can sneak up on retirees. Most of the time, recipients are on their own when it comes to dental work. Medicare specifically calls out annual cleanings, implants, dentures, and tooth removals as examples of procedures and items that aren't covered by the federal program. Generally, dental bills are only covered by Medicare if they're borne out of an underlying medical complication that's already covered by your Medicare plan. For example, cancer patients who require a tooth removal prior to chemotherapy usually have this procedure covered.

The result of this lapse in coverage is a staggering number of retirees without a dental plan. As of 2023, Charm Economics reports that around 31% of U.S. adults 55 and older don't have dental coverage (via the National Association of Dental Plans). Dental care is easy to overlook, given the primary concern of broader health complications, but dentists implore older individuals not to ignore this crucial coverage. Even individuals with dentures require routine visits to the dentist to keep their oral health in check. Beyond health considerations, retirees are encouraged to secure dental coverage independent of Medicare to prevent surprise bills. Otherwise, a standard dental screening alone could cost you hundreds.

Social Security recipients were happy to hear about the cost-of-living adjustment (COLA) for 2026, which will elevate benefits by 2.8%. That translates to roughly an additional $56 per month for beneficiaries on average. In total, Social Security is set to send eligible seniors average monthly payments of $2,071. Annual COLA increases are designed to keep program payouts in line with inflation, so retirees can keep up with the persistent increase in living expenses. Unfortunately, seniors may not be able to realize the full breadth of this year's payout increase due to accelerating premiums.

CMS reports that Part B premiums are set to jump by around 10% in 2026, rising from $185 to $202.90 per month. The National Committee to Preserve Social Security and Medicare (NCPSSM) highlights how this single-plan premium increase alone wipes out roughly 1/3 of the COLA increase, and it's not surprising given the climate. As NCPSSM's senior health policy expert Anne Montgomery notes, "Part B premiums are rising in part because of broader medical inflation and the cost of moving many treatments out of hospitals and into doctors' offices and outpatient settings." Unfortunately, the problem of premium inflation outpacing COLAs isn't likely to slow down, either. In fact, this recent jump in Part B premiums was the sharpest in nearly a decade.

It's looking increasingly likely that long-term care will be one of the essential healthcare services retirees won't be able to afford in 10 years — and that's already the reality for many elderly Americans. Although Medicare is specifically designed for older individuals, the price of extended care is often placed in the lap of fixed-income retirees.

By Medicare's definition, long-term care comprises any aid for someone suffering from a chronic illness or dealing with a disability, and that ranges far beyond conventional medical treatment. Some examples of uncovered care include nursing home stays, at-home personal care, meal preparation, and transportation. Even Medigap, which is uniquely designed to patch up holes in Medicare's spotty coverage, fails to assist retirees with the exceptional costs of long-term healthcare.

This hidden hole in coverage impacts the overwhelming majority of retirees, as 70% of individuals 65 and older will require some form of long-term healthcare attention, according to the U.S. Department of Health and Human Services. A quick look at some of the annual costs of extended medical care reveals the full financial load faced by retirees. The Federal Long-Term Care Insurance Program estimates that at-home care costs around $51,480 per year, while assisted living sits around $66,132. Nursing homes are even more expensive, with an average annual cost of $112,420.

It's a common misconception that emergency-related interventions, such as transportation, are handled by Medicare coverage. Unfortunately, emergency care makes for yet another hole in Medicare coverage, and even riding in an ambulance could seriously set you back. Ambulance rides are only covered by Medicare under specific circumstances: Often, you must be experiencing an immediate emergency, and you need to be in a physical state where traveling in other forms of transportation would put you in danger. Furthermore, Medicare only helps provide coverage for an ambulance ride to the closest relevant healthcare facility.

This glaring gap in coverage, especially under the stress of potential emergencies, is understandably frustrating for seniors. It essentially forces retirees dealing with a health scare in real time to determine whether the situation is a justifiable emergency. As Medicare largely refuses to offer assistance in non-emergency situations unless very specific conditions are met ahead of time, the financial cost of judging incorrectly is serious: Consumer Shield places the average cost of an uncovered ambulance ride between $940 and $1,277, depending on the extent of services included.

Many of the healthcare surprise costs that sneak up on you in retirement are systemic issues. Yet, some unforeseen expenses derive from expiring legislation. In 2026, certain Affordable Care Act (ACA) subsidies are set to terminate, unless Congress intervenes. More specifically, the program's Premium Tax Credits (PTC), implemented to ensure healthcare is more financially manageable for Americans, are expected to go belly-up on December 31, 2025. The average PTC recipient is at risk of seeing their monthly premiums rise by 18%, according to the Bipartisan Policy Institute (BPI). Although many demographics would be impacted by the legislation's sunset, retirees are at heightened risk because of the increased cost of their healthcare.

Older individuals face steep premiums as their risk profile jumps considerably. Medicare helps to supplement some of these heightened costs, but early retirees who leave the workforce and their work-related healthcare are entering an environment with spiking premiums. The BPI outlines a potential scenario where 60-year-old joint filers earning $85,000 may face an annual premium of $22,600, representing around 25% of their yearly income. Under current legislation with the ACA subsidies in place, the same couple would only spend roughly 8.5% of their income on these premiums.

The American healthcare system is notorious for its expensive prescription drugs. Even when they're determined medically necessary and a patient has healthcare coverage, certain medications come at a staggering expense to consumers. Unfortunately, retirees don't get additional protection from this shortcoming under Medicare. Part A and Part B don't tend to account for prescribed medications for outpatient care. If you want this coverage, you'll need to opt in to Part D, which is specific to drug coverage. Medicare's website claims that Part D plans are required to cover the majority of drugs Medicare recipients would need, but reality paints a different picture: Barron's found that Medicare fails to cover 44% of medications — nearly double the 22.9% denial rate of private insurance companies, per The New York Times.

At the same time, retirees are witnessing a rapid shrinkage in the variety of stand-alone drug coverage. In 2026, KFF predicts the average Medicare beneficiary may only have eight to 12 different plans from which to choose. According to the Associated Press, that's down from 12 to 16 in 2025 and almost 30 a few years ago. Not only does this diminishing range of options minimize potential drug coverage, but the lack of competition also drives up premiums. Another telling statistic is that almost 11% of people enrolled in a standalone drug plan lost coverage in 2024, according to the JAMA Network.

When free time is abundant and work is a thing of the past, many retirees choose to enjoy longer-term travel. Some even seem to spend their golden years abroad by finding the best countries to retire outside of the U.S. This extended international exploration can lead to another sneaky healthcare cost in retirement, since most private and public plans don't cover healthcare abroad. Medicare indicates it only provides international coverage in extreme circumstances, all of which still require beneficiaries to be in North America at the time they need treatment.

For instance, retirees may have coverage abroad if the closest hospital is in a foreign country when an emergency happens. This might also be true in a non-emergency context if the closest hospital that can reasonably fulfill a specific medical need is abroad. Another possible scenario where Medicare covers treatment outside of the U.S. is when medical intervention is needed in transit between the contiguous U.S. states and Alaska, and the closest hospital is in Canada. Barring those hyper-specific and uncommon conditions, retirees must supplement their medical coverage with travel health insurance when abroad. Even when abroad coverage applies, recipients are responsible for submitting their own treatment bills to Medicare, as foreign hospitals don't need to make Medicare claims on behalf of their patients.

Many retirees are also surprised that hearing aids aren't covered by Medicare. It's common to assume relatively routine medical needs are covered by insurance, but often Medicare seeks to avoid co-sharing these common conditions due to the heavy financial burden. Hearing loss is incredibly common among retirees, with the National Institute of Aging (NIH) estimating one in three elderly Americans suffer from some sort of hearing difficulty — an issue that only worsens as time goes on. The obvious prevalence of hearing loss in old age leads to some hefty expenses for retirees. 

Prescription hearing aids are among the most common solutions to help those with hearing problems, and they're not cheap. According to Forbes, prescription hearing aids can cost anywhere from $2,000 and $7,000 per pair, and even over-the-counter hearing aids can still run consumers thousands. That's a serious out-of-pocket expense for anyone, let alone retirees on fixed incomes. More than a nuisance, hearing loss has been associated with worse health conditions, such as dementia, depression, and fall risks. The condition can also be extremely socially isolating, so those denied access to hearing aids are almost sure to contend with some form of mental toll, with or without a medical diagnosis to go with it.

Arguably, one of the trickiest healthcare surprises that can sneak up on you in retirement hinges on a technicality at the hospital. Medicare coverage distinguishes between inpatient and outpatient care. Generally speaking, Part A covers the former and Part B handles the latter. This is an important distinction since retirees face different cost structures under these different parts of Original Medicare. This meticulous distinction might not be conspicuous to patients in the moment, but it has real-life implications. In some instances, doctors will keep you under observation status while determining whether you should be admitted or discharged.

Medicare Part A only kicks in when you're considered an inpatient at the hospital — a status only achieved following a formal admission request by your doctor. This often occurs when a patient is likely to spend two or more nights in the hospital for essential medical care. If you're labeled as an outpatient under observation status, many hospital costs could fall under Part B, which may mean higher cost-sharing and out-of-pocket expenses. Furthermore, retirees heading to a skilled nursing facility after their visit may not receive Medicare coverage depending on their hospital status. Even with these crucial caveats to healthcare, retirees need to beware that Medicare won't cover inpatient hospital costs forever, either.