Health care could add up to one of your biggest monthly expenses during retirement. Medicare Part A hospital premiums are free for most people. But you’ll pay a premium for Part B doctor services, plus premiums for Part D drug coverage and Medigap insurance if you have them. If you have an Advantage plan, you might pay a premium for that as well as for Part B. You’ll need to budget for deductibles and/or copays, too.  

Many Medicare Advantage plans have low or no premiums. But your choice of doctors and hospitals is often limited. You might have a high deductible and many copays. The cap on your out-of-pocket spending could go as high as $8,300 for in-network services and $12,450 for out of network. So do your research. If you see many specialists or know you’ll need surgery, estimate what the plan will really cost you.

If you choose traditional Medicare, consider coverage for the 20% of Part B costs it doesn’t pick up. A Medigap, or supplemental, insurance plan will have a monthly premium. (Its cost will vary based on the plan you pick.) But you may not have any deductible beyond Part B’s annual $226. You’ll also likely have lower (in some cases, no) out-of-pocket costs compared to an Advantage Plan. 

It can be hard to compare all the plan choices and add up all the possible costs on your own. The National Council on Aging’s online Age Well Planner lets you connect with a licensed Medicare enrollment specialist for free. These professionals are insurance brokers who understand the options and can explain them to you in detail.  

Take good care of yourself. Get all recommended health screenings and other preventive services. Don’t put off a doctor visit if you don’t feel well.  Treatment often costs less when you catch a condition early. Aerobic exercise, good for the heart, also exercises your brain. It can help preserve memory and lower dementia risk along with the chances that you’ll need costly caregiving. 

This means the health care provider agrees to accept the amount Medicare pays for their service, even if it’s less than what they usually charge. Some providers take Medicare patients but don’t accept assignment. They’re allowed to charge you up to 15% more than the Medicare limit. If you use them, you’ll pay that extra amount out of pocket.  

Follow your plan’s rules on where to get services. For example, Medicare Part B only pays for flu, pneumonia, hepatitis B, and COVID-19 vaccines when you get them at your doctor’s office. Other shots, like shingles and DPT, are covered through Part D and you usually need to get them at a pharmacy. If you get one during a doctor visit instead, you could get a large bill. 

Even when your drug plan covers the meds you take, your local pharmacy might not be the cheapest option. You can often save by ordering 3-month supplies through your drug plan’s website or preferred home delivery pharmacy. Switching from brand-name drugs to generics can also bring big savings. Some drug plans even offer discounts when you use their preferred pharmacy chain. This can be helpful for urgent needs or when you’re taking only a short course of a drug.

You can use a health savings account (HSA) set up while you were working to pay premiums, deductibles, copays, and other medical costs after you retire. If you haven’t yet enrolled in Medicare, keep contributing to your HSA. The pretax money you put in comes out tax-free -- even if the fund went up in value. If your HSA funds are invested in stocks, you might switch to a money market fund once you retire to lower your financial risk.

If your income is over $97,000 for a single person or $194,000 for a couple in the 2 years before you go on Medicare, you’ll pay more for Part B and D premiums. (They’re set on a sliding scale.) If you haven’t yet retired, ask your financial or tax advisor how your modified adjusted gross income, or MAGI, will affect your premiums, what cost-cutting strategies might be available, and how to appeal for lower premiums.

Long-term care can be hard to find and cost thousands of dollars a year. But it’s still possible to get long-term care insurance. This coverage helps pay for assisted living, a nursing home, or care in your home. (Medicare doesn’t cover long-term care.) Another strategy: If you own a house, you might plan to sell it if you need to move to a care facility. Or a reverse mortgage could pay for nursing care and let you stay in your own home.

If you have few or no assets, you may be eligible for Medicaid. Unlike Medicare, it covers long-term care costs. Also, 31 states offer PACE, a Medicare and Medicaid program that helps people who need nursing home-level care get it in their own homes. 

Every September, compare your current Medicare plan to others to look for savings. Medicare.gov’s “Explore Your Medicare Options” tool can help. Check whether your doctors are still in your plan and your medications are still covered. You can switch from Original Medicare to an Advantage plan or vice versa from Oct. 15 through Dec. 7. From Jan. 1 to March 31, you can switch from one Advantage plan to another or go back to Original Medicare.