‘Listen up’: Suze Orman says Americans are miscalculating 1 critical retirement cost — are you? 5 ways to get ahead now

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For millions of Americans, turning 65 brings a major change in how they pay for health care: Medicare eligibility.

But financial expert Suze Orman says there's a potentially costly misconception about what happens next.

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Medicare doesn't make health care free — and failing to account for what it won't pay for could leave retirees facing substantial bills they never worked into their budgets.

"Clearly, that's a retirement expense you need to plan for," Orman wrote in a blog post about health care costs. And her warning isn't only for current retirees (1).

"Even if you have yet to enroll in Medicare, I need you to listen up."

With Fidelity estimating that a 65-year-old retiring in 2026 could need about $185,500 in after-tax savings to cover health care expenses throughout retirement (2), understanding where Medicare coverage ends could be an important part of making sure your savings last.

Medicare can still leave you with major bills

Medicare covers a substantial portion of health care expenses for Americans 65 and older, but retirees can still be responsible for premiums, deductibles, coinsurance and services that aren't covered.

"Health care is the most unpredictable expense because Medicare doesn't cover everything," certified financial planner Tyler End told AARP. "Out-of-pocket costs, deductibles, prescription drugs and the potential need for long-term care add up" (3).

Medicare Part A, which covers inpatient hospital care, is generally premium-free for people who qualify. But in 2026, patients face a $1,736 deductible for each inpatient benefit period (4).

And hospital care itself can be expensive. The average cost of a day in a U.S. hospital was $3,297 in 2024, according to KFF (5).

The risk of needing that care also rises with age. CDC data shows that in 2019, 16.9% of Americans ages 65 to 74 had at least one hospital stay during the year. Among those 85 and older, that climbed to 26.1% (6).

Hospital bills aren't the only potential hole in a retirement health care budget.