Someone who turns 65 this year and is enrolled in Original Medicare will still have out-of-pocket expenses of around $185,500 to cover health care fees and expenses over the rest of their life.
That’s the latest estimate from Fidelity. And it’s likely to keep rising in the coming years. This year’s $185,500 average estimate was 7.5% more than a year ago, reflecting rising care costs, including a higher monthly premium for Medicare Part B. And that’s just for actual medical care; Medicare does not pay for the cost of ongoing long-term care assistance, whether at home or in a nursing home.
Now the good news is that this six-figure average expense is the total for someone’s entire remaining lifespan. For a 65-year-old woman today in average health, that means the estimated total cost is spread out across more than 20 years. But it’s still an eye-opener, right?
And it’s why I hope if you are in your 30s, 40s, and 50s, you will push yourself to save as much as possible for retirement. Medicare covers a lot of your medical expenses in retirement, but you will likely need to spend some of your retirement income as well.
Now for those of you who opt for Medicare Advantage (MA), rather than Original Medicare, it’s absolutely true that your upfront costs will be lower than if you chose Original Medicare, which involves purchasing a separate supplemental policy (called Medigap) to cover the portion of charges that the program doesn’t cover. But please don’t think that Medicare Advantage is some sort of free ride.
While there is no supplemental coverage to purchase with MA, you will run into deductibles and copays when you need care, which can add up. The legal limit for 2026 out-of-pocket costs for MA is more than $9,000, though most MA plans cap the cost at around half that much. But even $4,500 or so is a lot. So it’s definitely not free.
In fact, if you develop a chronic condition that requires ongoing care, MA might end up being more expensive than using Original Medicare and paying for a Medigap policy that limits your deductible to less than $300 in 2026. The monthly premium for a Medigap policy depends on your state, but in 2026 it typically costs around $150 to $250 a month, though in high-cost states it may push into $300 or more a month.
The main point you need to grasp is that neither Original Medicare nor Medicare Advantage is cost-free. The more you can save today, the easier you will find it to cover your later-life medical costs that Medicare does not cover the tab for.
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