Key Takeaways
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In 2025, Medicare costs extend far beyond monthly premiums. Deductibles, coinsurance, prescription drug expenses, and non-covered services often go unnoticed until you are already facing them.
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Understanding what Medicare does not cover, including long-term care, dental, and routine vision, is critical to planning for out-of-pocket expenses that can accumulate quickly.
Medicare Is Not a One-Time Payment System
If you assumed Medicare was a pay-once, use-forever type of system, you’re not alone. Many enrollees enter retirement thinking their premium payments will cover everything. But Medicare is built on a shared-cost model. You pay premiums, yes, but also deductibles, copays, coinsurance, and in some cases, the entire cost of services Medicare doesn’t cover at all.
Let’s walk through the most common (and costly) expenses that often catch people off guard.
Hospital Stays Aren’t Free: Part A Deductibles and Daily Costs
Medicare Part A covers inpatient hospital stays. However, this coverage does not begin until you first meet a sizable deductible. In 2025, that deductible is $1,676 per benefit period.
After 60 days of inpatient care, daily coinsurance costs begin to apply:
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Days 61–90: $419 per day
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Days 91 and beyond: $838 per day (using lifetime reserve days)
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After lifetime reserve days: You pay all costs
This is where expenses can multiply quickly. A single hospital stay that spans beyond 60 days will leave you with bills that add up even under Medicare coverage.
Medical Visits Add Up: Part B Deductibles and 20% Coinsurance
Medicare Part B handles outpatient care like doctor visits, diagnostics, surgeries, and durable medical equipment. You pay a standard monthly premium (currently $185 in 2025), but coverage starts only after you meet the annual deductible of $257.
Once you meet this deductible, Medicare covers 80% of approved services. That means you’re responsible for the remaining 20%.
This 20% coinsurance can be a major burden when:
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You receive frequent outpatient procedures
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You undergo physical therapy or chiropractic care
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You need specialized diagnostic scans like MRIs or CTs
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You rely on wheelchairs, walkers, or other medical devices
There is no out-of-pocket maximum under Original Medicare Parts A and B, so your 20% share has no cap.
Prescription Drug Costs Aren’t Unlimited, But They Can Be Ongoing
Medicare Part D is designed to help cover the cost of prescription drugs. In 2025, the program includes a $2,000 out-of-pocket cap for drug spending, a major improvement from previous years.
However, before you reach that cap, you still face:
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A deductible (up to $590 in 2025)
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copayments or coinsurance based on drug tiers
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Ongoing monthly premiums
Even with the new out-of-pocket cap, your actual spending can be highly front-loaded and unpredictable depending on your medication needs. High-cost specialty drugs can push you to the $2,000 cap within a few months.
Routine Dental, Vision, and Hearing Are Not Covered
Medicare does not cover routine dental, vision, or hearing care:
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Cleanings, fillings, crowns, and dentures? Not covered.
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Eye exams, glasses, or contacts? Not covered.
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Hearing tests and hearing aids? Not covered.
Many retirees are surprised to find out they must pay out of pocket or secure separate coverage for these services. And these aren’t occasional luxuries. They are often recurring needs, especially as you age.
Long-Term Care: The Biggest Gap in Medicare
One of the most significant costs that Medicare does not cover is custodial long-term care. That includes non-medical help with:
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Bathing
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Dressing
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Eating
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Using the restroom
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Moving around your home
Whether in a nursing home, assisted living, or in-home setting, this type of care can cost thousands per month. Medicare may pay for a limited period of skilled nursing care after a qualifying hospital stay, but it does not cover ongoing custodial care.
Emergency Room Visits, Ambulances, and Urgent Care Can Trigger Big Bills
Emergency care might feel like something Medicare should fully handle, but in many cases, it doesn’t:
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Ambulance rides can cost hundreds or more, depending on location and urgency
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ER visits fall under Part B and require you to pay the 20% coinsurance
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Observation status in a hospital may not trigger inpatient coverage under Part A
This makes it essential to understand whether you’re being admitted or simply observed, as the difference significantly affects what you owe.
Skilled Nursing Facility Costs After Day 20
If you require skilled nursing care after a hospital stay, Medicare covers it fully for only the first 20 days. From days 21 to 100, you pay a daily coinsurance ($209.50 per day in 2025). Beyond day 100, you pay all costs.
Many patients do not realize that:
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Not all rehab stays qualify
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A 3-day inpatient hospital stay is required to qualify
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Observation status doesn’t count toward the 3-day requirement
This can lead to unexpected denials and full out-of-pocket responsibility.
Out-of-Network or Non-Participating Providers
If you see a doctor who does not accept Medicare assignment, you may pay up to 15% more for services. These “excess charges” come out of your pocket unless you have additional coverage that handles them.
Some providers have opted out of Medicare altogether, meaning they can charge you any amount they want, and Medicare pays nothing. This is common among concierge medicine practices and some specialists.
Annual Changes to Premiums, Deductibles, and Coverage
Every year, Medicare adjusts the cost structure:
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Premiums can increase
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Deductibles can change
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Drug formularies can shift
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Plans can leave or enter the market
Even if you budget based on this year’s rates, those costs may change again in January. For example, if your drug plan no longer covers one of your medications, you may be forced to pay full price or switch plans.
Income-Based Adjustments: IRMAA Surcharges
If your income is above certain thresholds, you’ll pay more for both Part B and Part D. In 2025, individuals with income over $106,000 or couples over $212,000 pay an Income-Related Monthly Adjustment Amount (IRMAA).
These surcharges can increase your monthly premiums by hundreds of dollars, and they’re based on your income from two years ago. So if you sold a property or cashed out investments in 2023, your Medicare costs in 2025 may reflect that.
Coordination of Benefits Issues
If you have retiree coverage, COBRA, a union plan, or an employer plan, coordination of benefits can lead to:
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Delayed claim payments
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Unexpected denials
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Duplicate coverage with unnecessary premiums
Many enrollees assume one plan will automatically handle what Medicare doesn’t. In reality, poor coordination can mean you pay first, then fight for reimbursement.
Preventive Services Aren’t Always Free
While Medicare does offer many preventive services at no cost, not all screenings and tests fall into that category. Additionally:
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Follow-up procedures may not be covered 100%
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Diagnostic tests based on screening results may trigger coinsurance
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Not all providers waive the full cost of preventive care
You may leave a preventive visit with bills you didn’t anticipate.
Using Telehealth? Know What’s Covered
Medicare continues to offer broad coverage for telehealth services in 2025, but some services still require in-person visits:
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Behavioral health visits via telehealth require at least one in-person visit every 12 months
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Certain specialties may require periodic physical appointments
Failing to complete required in-person visits could lead to denied claims, even for services received online.
What All of This Means for You
While Medicare provides vital coverage in retirement, the program is not designed to cover every health expense. Even in 2025, the gaps in coverage can cause significant financial strain—especially when services, frequency, or duration increase.
Taking the time to:
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Learn what’s covered and what isn’t
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Monitor annual changes in costs and plan benefits
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Prepare for income-related adjustments
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Plan for services not included under Medicare
can help you protect your finances and make more informed decisions as your needs evolve.
Planning Ahead Means Less Financial Shock Later
You deserve to feel prepared for the realities of Medicare beyond premiums. While you may not be able to control rising costs or coverage gaps, you can make smarter choices about your healthcare and financial strategy. If you’re unsure how your current Medicare coverage fits your needs, or whether you’re paying more than necessary, get in touch with a licensed agent listed on this website for personalized support.
