More and more retirees are "retiring" from retirement.

Data from the National Institute for Occupational Safety and Health shows the number of retirement-age Americans in the workforce is growing.

And in a survey by Asset Preservation Wealth & Tax, 51% of respondents who'd reached retirement age said they plan to work indefinitely.

The reasons for retirees planning to work into their later years vary. Some simply have to from a financial perspective, while others want to live an active, purposeful life.

However, working during retirement brings challenges and trade-offs, especially when it comes to Social Security benefits, taxes and healthcare. The decisions you make about when to start claiming Social Security and whether you plan to keep working can have lasting consequences.

The pitfalls of claiming Social Security too early

A common phrase we hear is, "I'll just take my Social Security benefits at age 62." While it's true this is the first age you can start claiming benefits, doing so can backfire, particularly if you keep working.

If you claim and continue working before reaching your full retirement age, which is between 66 and 67 depending on your birth year, a portion of your benefits may be temporarily withheld owing to Social Security earnings limits.

For 2026, you can earn up to $24,480 before benefits will be withheld. In the year you reach full retirement age, the earnings limit increases to $65,160. After you reach your full retirement age, there are no earnings limits.

Upon reaching full retirement age, your benefit amount will be recalculated to give you credit for any benefits reduced and withheld.

Additionally, once you've started collecting Social Security, stopping and starting benefits is complicated and can permanently reduce your lifetime payments. It's not a switch you can easily flip on and off.

Bridging the healthcare gap: Age 62-65

Another major issue for people who claim Social Security benefits early is healthcare. Medicare eligibility doesn't begin until age 65, so if you leave your employer's health plan and retire at 62, you'll need to find coverage on the open market, which can get expensive.

Working part-time may provide access to employer healthcare, but that could put you at risk of exceeding the Social Security income limits. You could turn to private insurance, but the premiums can easily use up a large portion, or even all, of your Social Security check.

The three-year gap between age 62 and 65 is one of the most overlooked in retirement planning. I recommend sitting down with a financial adviser to go through all of your options before claiming early and potentially setting yourself up for financial failure, watching sky-high out-of-pocket premiums drain your savings faster than expected.

Income, taxes and the cost of working in retirement

Even after reaching full retirement age, when the Social Security earnings limit no longer applies, income from work can still impact your finances. That's because it depends on your total income.

If you're single and your combined income, the sum of your adjusted gross income (AGI), non-taxable interest and half of your Social Security, exceeds $25,000, or $32,000 for married couples, up to 85% of your Social Security benefits may be taxable.

In other words, the more you earn from working, the more you may have to give back in taxes. It's not necessarily a reason to stop working, but it does highlight the importance of strategically coordinating your income sources.

Knowing when to claim

Many people think waiting to claim Social Security until age 70 is always the best option, since benefits grow by about 8% each year after full retirement age until age 70. While that may maximize the amount you receive every month, it's not right for everyone.

For some retirees, the time value of money may matter more. For example, some may start taking benefits at 67 or 68 and use that income strategically by reinvesting it, reducing portfolio withdrawals or using it to strengthen their overall retirement cash flow.

There's also a break-even point, where the total amount collected by claiming early can surpass what you'd get by delaying. For married couples, it often makes sense to strategically stagger claims, with one spouse claiming earlier and the other delaying for a higher survivor benefit.

At the end of the day, there's no one-size-fits-all when it comes to claiming Social Security. It all comes down to finding the right balance of longevity, income needs and your overall financial plan.

Social Security should supplement, not replace, your income

Social Security was never designed to be the sole source of retirement income. It was meant to supplement, not replace, your paycheck.

You will likely need around 70% of your pre-retirement income to maintain your current lifestyle, and Social Security was only meant to cover about 40% of that.

That isn't to say Social Security doesn't matter. After all, those benefits come from decades of contributing payroll contributions. It's money you've earned. While the benefit may not be life-changing, it can still help cover major expenses, such as housing, travel or healthcare.

The importance of having a plan for claiming Social Security

Working in retirement can be incredibly rewarding, personally and financially. But it also requires strategic planning, especially if you plan to claim Social Security early.

Deciding when and how to claim Social Security is one of the most important financial choices retirees make because reversing your initial decision can be complicated and costly.

Before you claim, make sure you understand how your job, income and healthcare could affect your benefits. Working with a financial professional who can help you strategize Social Security with your overall financial plan can make a big difference. The right timing and strategy can help you keep more of what you've earned and lead to a more confident retirement.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Editor’s Note: This article is the last in a five-part special report exploring the connection between your money and your health. Other stories in the series look at 15 ways to lower your healthcare costs, how your finances affect your physical and mental health, the challenges of long-term care and managing the costs of mental health treatment.

If you're among the roughly 70 million people who get health coverage through Medicare, the federal insurance program for people age 65 and older and some younger people with disabilities, you're probably already aware of some of the big changes to the system in 2026 — changes that have hit budgets hard.

This year's 9.7% jump in premiums for Part B, which covers outpatient care, was the biggest increase in four years and eats up more than 25% of this year's 2.8% annual inflation adjustment (COLA) for Social Security benefits.

Meanwhile, cost pressures have caused some Medicare Advantage plans sold by private insurers to scale back extra benefits, such as dental, vision and hearing coverage, or eliminate others, such as allowances for transportation and over-the-counter purchases.

In some cases, private insurers have shut down plans or exited markets entirely. Those headline-grabbing shifts, however, aren't the only big changes to Medicare this year — and not all of the developments hurt your bottom line. You may benefit from new policies regarding drug pricing and telehealth services. But the new requirements for prior authorization in some areas and possible further shake-ups to Advantage plans? Not so much.

“There's a lot to think about and a lot to compare, and it can just be really overwhelming,” says Lindsey Copeland, director for federal policy at the Medicare Rights Center.

Here's the lowdown on this year's Medicare changes.

Some drugs are getting cheaper

New, lower prices went into effect on January 1 for 10 drugs covered under Medicare Part D, the first price reductions to be negotiated by Medicare directly with pharmaceutical companies under a landmark provision in the 2022 Inflation Reduction Act.

The medications include blood thinners Eliquis and Xarelto, diabetes drugs Jardiance and Januvia, and heart-failure treatment Entresto.

The nearly 9 million Part D beneficiaries who take these drugs will pay about 50% less on average than in 2025, according to the Centers for Medicare & Medicaid Services (CMS). But individual savings will depend on the particular drug and drug plan, and could range from a few hundred dollars to several thousand, says Gerard Anderson, a professor in the department of health policy and management at Johns Hopkins Bloomberg School of Public Health.

Lower, negotiated prices on an additional 15 drugs, including the diabetes and weight-loss medications Ozempic and Wegovy, will go into effect in 2027. A third round of negotiations, announced in January, will cover 15 more drugs, including Botox (to treat migraines and muscle conditions, not for cosmetic purposes), the GLP-1 diabetes drug Trulicity, and several cancer medications. Those prices will take effect in 2028.

What to do: If you have diabetes or another condition commonly treated by drugs whose prices have been negotiated by Medicare, but your particular medication is not among them, ask your doctor if it would be appropriate for you to switch to one that is. A 30-day supply of diabetes medications Januvia and Farxiga now costs 79% and 68% less, respectively, than their 2023 list prices. If you currently take other medications to treat the condition, such as Mounjaro or Afrezza, you could save a bundle.

You may also qualify for a temporary program, Medicare GLP-1 Bridge, that will cover GLP-1 drugs Wegovy and Zepbound for weight reduction this year. If you're enrolled in Part D, you'll pay just a $50 monthly co-pay for treatment between July 1 and December 31. You need preauthorization from your doctor.

Telehealth is sticking around

Before the pandemic, Medicare's telehealth coverage was generally limited to rural areas and required patients to travel to a designated clinic to receive care remotely. Many restrictions were lifted during COVID, making telehealth more widely available, but those benefits have been on the government's chopping block recently.

In February, Congress extended key provisions through 2027. These include allowing beneficiaries to receive services at home by video and audio, regardless of geographic location; audio-only visits for those who can't use video; and expanded coverage for remote care by physical and occupational therapists and other health providers.

“Telehealth has been an important tool to ensure that people can access the care they need, when and where they need it,” says Gretchen Jacobson, vice president of Medicare at The Commonwealth Fund.

What to do: Ask your doctor's office which appointments can be handled through telehealth, such as test result reviews or medication check-ins. Many practices that expanded services during the pandemic have kept it as an option.

Telehealth can't replace all types of primary care, however, such as wellness visits, immunizations, and some urgent or acute-care needs.

You may need to jump through a few more hoops

Under a six-year pilot program that launched in January, you now need prior authorization to receive certain medical services if you're covered under original Medicare and live in one of six states: Arizona, New Jersey, Ohio, Oklahoma, Texas or Washington.

The 17 procedures subject to artificial intelligence-assisted prior review include some steroid injections for pain management and some nerve-stimulation techniques used to treat Parkinson's disease, incontinence and sleep apnea.

The CMS says approval decisions will be made within 72 hours and that licensed clinicians, not AI or the outside organizations running the program, will make final coverage decisions.

But some policy experts have expressed concern over the potential impact. “The companies that have been hired to administer the approval process are incentivized to reduce spending, which means approving fewer services,” says Jacobson.

What to do: If you live in one of the affected areas and your doctor recommends one of the services identified in the pilot program, make sure the provider gets prior approval. Otherwise, you could be hit with a huge bill afterward.

Advantage plans could become more restrictive

In January, the Trump administration issued a proposal to keep reimbursement rates to Medicare Advantage insurers nearly flat next year, compared with the 4% to 6% boost insurers had anticipated. The news prompted dire warnings about the possible impact on enrollees.

“Flat program funding at a time of sharply rising medical costs and high utilization of care will impact seniors' coverage,” said Chris Bond, a spokesperson for AHIP, the national health insurance trade organization, in a statement at the time.

“If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors and people with disabilities when they renew their Medicare Advantage coverage in October 2026,” Bond said.

In early April, CMS announced the reimbursement rate had been finalized at 2.48%, higher than the initial 0.09% proposal, but probably not high enough to prevent changes in some plans for 2027.

What to do: If you're enrolled in a Medicare Advantage plan, carefully review the “annual notice of change” you get this fall for any adjustments to premiums, deductibles, co-pays and benefits. That will give you time to consider alternatives before open enrollment, which runs from October 15 to December 7.

If you sign up for an Advantage plan but then have second thoughts, you'll have another shot at choosing during the separate Medicare Advantage open enrollment period from January 1 to March 31. During this time, you can switch to a different plan or to original Medicare. Says Jacobson, “It's important to remember you have options.”

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Editor’s Note: This article is the fourth in a five-part special report exploring the connection between your money and your health. Other stories in the series look at 15 ways to lower your healthcare costs, how your finances affect your physical and mental health, the challenges of long-term care and what’s new in Medicare this year.

In 2023, Kent Scheibel finally found a psychologist who seemed like the perfect fit. The therapist specialized in treating people with bipolar disorder, which Scheibel, then 51, had been diagnosed with at age 20. After decades of trying to manage extreme emotional highs and lows, the treatment helped him find steadier footing at last.

The problem was the price. Scheibel was paying $175 a week out of pocket for therapy because the psychologist, like many mental health professionals, didn’t accept health insurance. By 2025, the expense had become impossible to sustain.

“I was feeling pressure financially,” says Scheibel, who was then self-employed as a life coach. “The first thing that goes is something like therapy. I guess you could call it a luxury even though it’s actually a necessity.”

Scheibel eventually took a full-time staff job selling insurance to qualify for employer-sponsored health coverage, a less expensive option than the $792 a month he’d been paying in premiums for a marketplace plan. He’s found a psychiatrist in his insurance network who has prescribed helpful medication. But he has yet to find an in-network therapist who meets his needs.

“My ability to function in life has to do with the care I get,” says Scheibel, now 53 and living in Marina del Rey, Calif. “I’m looking forward to having a therapist again, but it’s just not feasible financially right now.”

Scheibel’s experience underscores a difficult reality for millions of Americans: Getting mental health care can be a challenge. Paying for it may be even harder.

Nearly one in four adults in the U.S. experienced anxiety, depression or another mental, behavioral or emotional health condition in 2024, according to the latest data from the National Survey on Drug Use and Health run by the Department of Health and Human Services. The rate climbs to one in three for young adults ages 18 to 25, a group that often depends on a parent’s support — and health insurance — for care.

Yet despite how common mental health issues are, getting care is problematic for many people seeking treatment for themselves or someone they love. About half of those facing a mental health challenge in 2024 didn’t receive any treatment, according to the national survey.

Cost was one of the top barriers, cited by nearly two-thirds of adults 18 and older. About four in 10 didn’t have insurance coverage that would cover mental health treatment.

Those who do receive care often struggle to pay for it. Out-of-pocket costs for insured people who receive treatment for depression or anxiety, for instance, are almost twice as high as those for enrollees not being treated for a mental health condition, according to data from KFF, a nonpartisan health policy research organization.

Among adults with medical debt, 20% said they’d borrowed to pay bills for mental health treatment, a separate KFF survey found.

“These are choices no one should have to make,” says Jennifer Snow, national director of government relations and policy at the National Alliance on Mental Illness (NAMI). “You shouldn’t be forced to choose between your financial stability and the essential, life-improving care that you or your loved ones need.”

If your family is grappling with high out-of-pocket costs for mental health treatment, experts say there are steps you can take to help make those bills more manageable and avoid that trade-off.

Here’s what they recommend.

Why affordable care is elusive

It wasn’t supposed to be this tough. For decades, lawmakers at both the federal and state level have tried to require insurers to cover mental health and addiction treatment the same way as they cover physical health care — a concept known as parity.

The 2008 Mental Health Parity and Addiction Equity Act (MHPAEA), for example, required group health plans that cover mental health or substance use disorders to make treatment limits and financial requirements, such as deductibles, co-payments and coinsurance for those benefits, equal to those for medical care.

Two years later, the Affordable Care Act went further by requiring most individual and small-group health plans to include mental health and substance use treatment as essential health benefits. All 50 states and Washington, D.C., also have their own parity laws.

Together, the requirements have helped millions of Americans gain insurance coverage for therapy, psychiatric care and addiction treatment. But coverage on paper doesn’t always translate into care people can actually get.

Evidence, in fact, is plentiful that mental health treatment is still not on par with benefits for medical and surgical care. “No question, there is a big gap,” says Mark Covall, interim president and CEO of the National Association for Behavioral Healthcare.

One of the biggest challenges for people with coverage is finding mental health providers in their plan’s network. Insurers have struggled to build networks of mental health providers large enough to offer the same level of access that patients typically have for medical care, says Stoddard Davenport, who has researched disparities in care as a health care management consultant at Milliman, an actuarial and consulting firm.

Part of the problem is a nationwide shortage of mental health professionals, he says. But many therapists, psychologists and psychiatrists also choose not to belong to insurance networks because administrative requirements can be burdensome, and reimbursement rates are much lower compared with what other medical providers receive.

As a result, people with insurance often go outside their plan’s network to get care. A 2024 study by the Research Triangle Institute found that patients sought out-of-network care 8.9 times more often for psychiatrist visits and 10.6 times more often for psychologist visits than patients who went for medical and surgical office visits.

“Going out of network is almost always going to mean a significant increase in costs,” Snow says.

Even when people do find in-network care, out-of-pocket costs still can add up quickly. That’s because, despite parity laws, many insurers have continued to use stricter prior-authorization reviews for coverage, exclude key mental health and substance abuse treatments from benefits, and deny claims after treatment at a higher rate than they do for physical health care, according to a 2024 report to Congress on MHPAEA enforcement.

A 2024 federal rule addressed some of the disparity by requiring insurers to document how their mental health coverage plans work in practice and to measure outcomes, says Kaye Pestaina, a vice president at KFF, where she directs its program on patient and consumer protections. But the rule has faced legal challenges, and the Trump administration has not been enforcing some of its regulations, she says.

Know your rights around mental health care costs

If you have health insurance, the first step to getting mental health treatment at a price you can afford is understanding what your plan covers.

The MHPAEA doesn’t require employer group health plans to cover mental health and addiction treatment. But if they do, those benefits must be comparable to medical coverage. That means the plans typically can’t impose higher co-pays, stricter limits on appointments or separate out-of-pocket maximums for mental health services.

The parity law also applies to Medicaid plans and individual plans sold through the Health Insurance Marketplace, which are required to cover mental health and addiction treatment. It doesn’t apply to Medicare, although the program does cover a range of mental health services, including an annual screening for depression and individual and group therapy, as long as the provider is certified and accepts the insurance.

Signs that your health plan may be violating parity requirements include higher costs or fewer allowable visits for mental health services than other types of care, and requiring permission to get mental health care but not for other kinds of medical treatment and services, according to NAMI. Another red flag: None of the plan’s in-network mental health providers are taking new patients.

Before seeking treatment, ask your insurer about deductibles, co-pays and out-of-network reimbursement, as well as whether prior authorization is required. “You want to get as much information as possible up front about what you have to pay,” Pestaina says.

Also double-check with your insurer that any therapist, psychiatrist or other mental health professional you plan to see is actually in its network. Directories are often outdated and may include mental health providers who don’t accept new patients or have left the network, Pestaina says. If you contact several listed providers and can’t find one with availability, ask your insurer to identify an in-network provider who can see you. If one isn’t available, ask whether the plan will allow you to see an out-of-network provider at the in-network rate.

If your insurer denies coverage after you submit a claim for mental health treatment, you generally have up to 180 days from the date you’re notified to appeal the decision. If that’s turned down as well, you can request an independent external review. The denial notice should include information about assistance programs that can help you file an appeal, Pestaina says.

Look for lower-cost options

Can’t find a therapist, psychologist or psychiatrist in your health plan’s network who is accepting new patients? You might have other treatment options that don’t involve going out of network and being forced to pay more.

Telehealth is one of them. Your health plan might cover the cost of mental health care delivered remotely through online video conferencing. “That gets rid of geographical constraints to some extent,” Davenport says.

Your small town might not have a therapist, but a big city in your state could have several providers participating in your health plan’s telehealth network. Medicare also covers some telehealth services for mental health and addiction treatment.

Depending on your needs, your primary care provider might also be able to provide treatment or prescribe medication. “More mental health is seen in primary care than in the other setting,” says Benjamin Miller, a psychologist and adjunct professor at Stanford University School of Medicine.

There’s a growing trend known as the collaborative care model that integrates behavioral health managers and mental health clinicians into primary care practices. “It’s the easiest way to be able to have kind of a one-stop-shop, more-comprehensive approach to care,” Miller says.

Availability of this type of care varies by state. If your current primary care provider doesn’t offer integrated care, Miller recommends checking with other providers in your health plan’s network to see whether they do.

Negotiate a lower price

Therapists, psychologists and psychiatrists might be willing to adjust their rates. The key is knowing what to ask.

“Even if you have health insurance, one of the best things you can ask anybody is, Is there a difference in price if I pay cash or if I use my insurance?” Miller says. Also ask providers whether they use a sliding scale — that is, if they lower their rates based on a patient’s income or if the patient is experiencing financial hardship, he says.

Another option to keep down costs, if your health permits: Ask your provider whether you can meet less frequently, says Nancy Ruddy, a psychologist and behavioral health care consultant in Portland, Maine — say, every other week instead of weekly.

Explore other kinds of support

If the cost of traditional individual therapy is out of reach, there are other ways to get help that may be more affordable. Here are some of the approaches you might try.

Group therapy. Getting counseling in a group setting can cost half as much as one-on-one therapy, Miller says. Or there may be free peer-support groups in your community led by people with conditions similar to yours (to find out, check with community centers or the local branch of the Mental Health Association). NAMI also offers free groups for a variety of mental health conditions (find one here).

Employee assistance programs. Nearly all large and midsize U.S. companies, along with many small businesses, offer this free benefit, which provides short-term, confidential counseling for employees. The program typically covers three to six sessions, and counselors can help with referrals to other mental health care providers as well. “It’s a good place for people to start,” especially if you don’t need long-term treatment for a chronic condition, Ruddy says.

Certified Community Behavioral Health Clinics. These clinics are required to serve anyone with a mental health or substance use need, regardless of their ability to pay. The National Council for Mental Wellbeing has a list of CCBHCs by state. Telehealth services are available, and you don’t have to live in the state where they’re based to access them.

Student therapists. If you live near a university, you or your loved one might be able to see a student who is training to be a psychologist, social worker or family therapist. These clinicians-in-training typically charge much lower rates and are supervised by experienced mental health care providers, Ruddy says.

Online services. If you simply need some tips to get through a tough time, Ruddy suggests you look for therapist posts online that offer techniques to deal with conditions such as stress and anxiety. Look for videos that offer evidence-based strategies, she says. For example, mental health education platform Psych Hub has a YouTube channel featuring mental health experts.

Stay persistent

“All of these things may feel like you’re jumping through a hoop of fire backwards, blindfolded,” Miller says. He suggests trying to reframe how you think about the challenge: “It’s just trying to find a way you can get more timely access to the things that you have a right to get access to.”

Adds NAMI’s Snow, “Unfortunately, it’s set up that people have to stand up and fight for what they need.”

The payoff is usually worth it, says Kent Scheibel, who is all too familiar with how staying proactive about your care can make a meaningful difference in your overall well-being. “I’ve learned firsthand that without good mental and physical health, it’s difficult to achieve and enjoy anything in life,” he says. “Remember, you do have options.”

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Editor's Note: This article is the first in a five-part special report exploring the connection between your money and your health. Other stories in the series look at how your finances affect your physical and mental health, the challenges of long-term care, managing the costs of mental health treatment and what's new in Medicare this year.

Gas prices are soaring, the cost of beef is through the roof, and electricity bills have shot up everywhere. But in a year when the affordability of basic goods and services is causing great anxiety across the board, there seems to be no expense more worrisome to Americans than what they’re paying for healthcare.

The evidence is everywhere. Two-thirds of Americans now say they worry about how they’ll be able to afford healthcare for themselves and their families — overshadowing concerns about any other necessity, including utilities, food and groceries, housing, and gas, according to a recent poll from nonprofit health policy organization KFF.

And the majority, some 56%, say they expect the price of receiving care will become even less affordable this year.

"The problem of higher healthcare costs is bad, and it’s getting worse," says Caitlin Donovan, senior director at the nonprofit Patient Advocate Foundation.

The price of health insurance — the thing that’s supposed to protect you from high medical bills — has grown especially burdensome. That’s particularly true for many people who get coverage on the Affordable Care Act Health Insurance Marketplace.

Four out of five people who re-enrolled in marketplace plans for 2026 report their premiums, deductibles, coinsurance and co-payments are higher than last year, with about half saying they’re a lot higher, KFF says.

The benchmark premium is up 22% on average, compared with 2% average annual increases between 2020 and 2025, according to the Urban Institute. Meanwhile, the expiration of enhanced premium tax credits for people who earn more than 400% of the federal poverty level means those enrollees, on average, saw their premiums about double.

People who get health insurance through work or Medicare have been hit hard, too. Premiums for family coverage rose 6% last year for people with employer-provided insurance, who paid an average of $6,850 in premiums, according to KFF. And costs are expected to rise even more this year — 6.7% on average, the consulting firm Mercer projects, the biggest jump in 15 years.

Costs have risen even more for people 65 and older who are covered by Medicare. Monthly premiums for Part B, which covers doctor visits and other outpatient care, jumped 9.7% this year, to $202.90, dwarfing the 2.8% inflation adjustment in Social Security benefits.

As a result, the percentage of Social Security income needed to pay Medicare premiums has hit an all-time high, according to a recent analysis by the Center for Retirement Research at Boston College.

The upshot: About one-third of Americans now report making at least one trade-off with daily living expenses to afford healthcare, such as stretching out prescriptions or borrowing money, according to a poll from the West Health–Gallup Center on Healthcare in America.

While the burden is worse for people without insurance, almost three in 10 people covered by a health plan say they’ve made at least one trade-off. Even among adults in households earning $240,000 a year or more, 11% report making at least one trade-off.

"In the wealthiest country in the world, people shouldn’t be choosing between their health and their financial future," says Tim Lash, president of the nonprofit West Health Policy Center.

Fortunately, you have ways to ease the strain. Here are 15 of them.

1. Reassess your health insurance options every year.

Whether you get coverage from your employer, a government marketplace or Medicare, you have a chance to reconsider your options and switch plans each year during your provider’s designated open-enrollment season to save money and get better coverage for your needs. You shouldn’t automatically default to re-enrolling in your current plan.

Yet that’s exactly what many people do. About half of employees who get insurance at work spend less than an hour reviewing their choices, according to a survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research.

And most Medicare beneficiaries didn’t look at other options for coverage, such as switching Medicare Advantage plans or moving to traditional Medicare from an Advantage plan, during a recent open-enrollment period, KFF found.

The costs of inertia can add up, says Jake Spiegel, a senior research associate at EBRI. Formularies for prescription-drug coverage can change, for example, so a low-cost med you’re taking now might move to a higher tier with a heftier co-pay. Providers may move out of a network, which means you’ll pay more to visit them.

Spiegel advises running the numbers every year, taking into account your total out-of-pocket costs, not just premiums, based on what you think your healthcare needs will be.

For example, if you’re managing a chronic condition that requires frequent doctor visits and treatments, or you expect you’ll need surgery, it might make sense to elect a plan with higher premiums but lower co-pays when you receive care.

2. Consider an HSA, if you’re eligible.

A health savings account is available to those enrolled in high-deductible health plans (with a deductible of at least $1,700 for individual coverage or $3,400 for families in 2026) who have no other comprehensive health insurance coverage, aren’t enrolled in Medicare and can’t be claimed as a dependent on someone else’s tax return.

Because of a provision in the One Big Beautiful Bill Act, all bronze and catastrophic plans purchased on the ACA marketplace are now eligible for HSAs.

"HSAs have a triple tax benefit," says Carolyn McClanahan, founder of Life Planning Partners and a certified financial planner and medical doctor. You get a tax deduction on your contributions, earnings on those funds grow tax-free, and you can withdraw the money tax-free as long as you use it to pay for qualified medical expenses.

You can use the funds to cover ongoing expenses, or you can pay those bills out of pocket, then invest the funds and use them in retirement to cover medical needs. Starting at age 65, you can also take money from the account for non-medical spending without penalty, although you will owe income tax on the withdrawals.

In 2026, the HSA contribution limit is $4,400 for individuals or $8,750 if you have family coverage. People 55 and older can make an additional $1,000 catch-up contribution. Bonus: Some employers contribute to workers’ accounts.

Read more: How to Track Your HSA Receipts and Paperwork

3. Check for medical billing errors.

About half of medical bills have mistakes, Donovan at the Patient Advocate Foundation estimates. Review your statements, identify possible errors and, if you see something fishy, dispute the charge.

Only about six in 10 people with some concern about a medical bill reached out to their provider, but nearly three-fourths of those who suspected an error succeeded in getting the charge corrected, a 2024 study published in the JAMA Health Forum found.

"For people who did make the call, they were really more likely to get some relief," says Erin Duffy, a scholar at the USC Schaeffer Institute for Public Policy & Government Service and lead author of the study.

Wait to pay any medical bill you get until you’ve received the explanation of benefits (EOB) or Medicare Summary Notice from your insurer, Donovan advises.

If the amount your insurer says you owe doesn’t match up with the bill, there’s an error, and you should call the provider’s billing office and ask them to explain the discrepancy. Be persistent, says Donovan, who notes that it usually takes multiple calls to get a resolution.

4. Compare prices.

Getting an MRI or a hip replacement isn’t the same as shopping for a new appliance or a car. But the principle of checking costs from several providers to find the best price for what you need still applies.

And prices for common healthcare services do vary widely, even within the same geographic area. One study found, for instance, that the price for a lower-back MRI in the Miami area ranged from $186 to $1,423, while the cost of a hip or knee replacement around San Diego ran from a low of $20,305 to a high of $51,995.

Federal law now requires hospitals to post prices on their websites — including cash prices and the negotiated price for specific insurance plans — for 300 "shoppable services," such as a colonoscopy or knee replacement.

Many have personalized tools so you can see what your costs will be. You can also call the provider for an estimate.

5. Negotiate with your provider.

Once you have a sense of the costs from different providers, you can negotiate, even if you have insurance. "Ask what the cash price is," Donovan says. "If you know you won’t likely meet your deductible outside of some catastrophic event, sometimes it will save you money not to use insurance."

In fact, hospital prices for 70 common services, such as lab tests, imaging and routine procedures, were lower nearly half the time for patients paying in cash rather than using insurance, a study by researchers at the Johns Hopkins Bloomberg School of Public Health found.

You can also negotiate after the fact — say, if you’re stuck with a big bill because, as is common, the provider’s fee was much higher than what your insurer deemed "reasonable and customary."

In the JAMA Health Forum billing study, 62% of respondents who reached out to negotiate a bill received a price cut. Donovan suggests offering a percentage up front, then monthly payments for a certain number of months, with the total adding up to a percentage of the original bill.

6. Do an annual prescription review.

About 66% of U.S. adults report taking at least one prescription medication, with 31% taking four or more, according to KFF. More medications mean a higher risk of side effects and drug interactions, as well as higher costs.

It’s a good idea to review your prescriptions annually with your physician to make sure you still need them.

"Talk to your doctor about what you should and shouldn’t take — it could save you a lot of money," says Arthur "Abbie" Leibowitz, chief medical officer and president emeritus of Health Advocate, a provider of health advocacy and navigation, well-being and behavioral health programs.

Don’t forget any over-the-counter medications or dietary supplements that you take regularly. Americans spent almost $69 billion on dietary supplements last year, most of them over-the-counter purchases, according to Grand View Research.

7. Shop for better prices on medications.

While generic drugs are usually cheaper, sometimes insurers will cut deals with pharmaceutical companies that make the name brand more affordable, so check the formulary, says Leibowitz.

Health insurers often have preferred pharmacies with better prices, so see where you’ll get the best deal. You can compare prices at GoodRx.com. Mail-order pharmacies are usually cheaper and permit you to get a 90-day supply.

If you take medications with a high co-payment, check with the manufacturer to see whether it offers a discount program that reduces your co-pay and, if so, how the program works with your insurance. (Medicare recipients usually aren’t eligible, and some marketplace plans won’t count the manufacturer’s assistance toward your deductible.)

It’s also worth checking online pharmacies such as the Mark Cuban Cost Plus Drug Co., though that usually means paying out of pocket.

"If you have a comprehensive insurance plan, it usually makes more sense to get your drugs through your insurer, where you have a co-pay and your payment is helping you reach your deductible," says Anthony Wright, executive director of Families USA, a consumer advocacy organization.

But in some cases, he says, the self-pay price may be cheap enough so that it makes sense to bypass your coverage, even though the payment won’t count toward your deductible.

8. Know when to go to urgent care.

According to Venteur, a health-benefits technology company, the average urgent care visit in 2026 costs between $150 and $280 without insurance; it’s a $20 to $75 co-pay with coverage. An emergency-room visit costs $1,500 to $3,000 or more without insurance; the typical co-pay is $100 to $500 or more with coverage.

That math’s a no-brainer. "Urgent care isn’t a substitute for preventive care and a relationship with a primary-care provider, but in many instances, it can be a good alternative to an ER visit," Leibowitz says.

Urgent care can handle less-serious problems that sometimes end up in the ER, such as an ankle sprain, upper-respiratory infection or back pain, according to the Mayo Clinic. But with certain symptoms, or if you have underlying health conditions, it’s better to be safe than sorry. If you’re experiencing potentially serious symptoms such as chest pain, seizures, a sudden, severe headache, severe abdominal pain or serious bleeding, or you have a head injury or a compound fracture with a bone poking through, go to the hospital.

And if you get insurance at work:

9. Contribute to an FSA.

Most employers offer flexible spending accounts, which allow you to contribute pretax money, up to $3,400 in 2026, to pay for a wide range of out-of-pocket healthcare expenses, including deductibles and co-pays, glasses, dental work, medical equipment, and over-the-counter medications. (See your options at FSAStore.com.)

If you contribute the maximum and are in the 22% tax bracket ($50,401 to $105,700 for singles, $100,801 to $211,400 for joint filers), you’ll save $780 by using an FSA.

Take care to correctly estimate those expenses when you sign up, because any funds in the account you don’t use by the end of the year may be forfeited to your employer. Some companies have a grace period that extends the deadline to March 15, or they may permit up to $680 to be rolled over into the next plan year.

Check with your benefits department for your company’s policy.

10. Grab your freebies.

You might be surprised by the free or discounted services you can get through your employer’s wellness program, Leibowitz says. For example, programs to help you stop smoking or lose weight are common, often with a financial incentive for participation or success.

You may also find gym discounts or reimbursements (including subsidized fitness apps such as Peloton), on-site fitness classes, free flu shots, on-site screenings for cholesterol and other biomarkers, and stress-reduction programs.

If you're on a marketplace plan, also:

11. Try to qualify for a subsidy.

If you previously qualified for a premium credit but no longer do, you might be able to limit your income — specifically, your modified adjusted gross income (MAGI) — to qualify for subsidies.

For 2026 plans, your MAGI must be no more than $62,600 for an individual and $128,600 for a family of four to qualify. Maxing out an HSA can help reduce your MAGI, as can maxing out pretax contributions to retirement plans such as a 401(k) or traditional IRA.

You can talk to your tax adviser about whether other deductions or capital losses might make you eligible for subsidies.

12. Switch to a lower tier.

If you are in reasonably good health, you may be able to save substantially on premiums by opting for a bronze plan over silver-, gold- or platinum-tier coverage during the next open enrollment period.

The trade-off: You’ll incur higher out-of-pocket costs when you do need care. Gold plans, for instance, pay 80% of covered costs; bronze plans pay an estimated 60%.

You should always do the math to be sure. That’s particularly important for people whose income is less than 250% of the poverty level because they can qualify for extra savings on a silver plan, which could make it the best option.

You can run the numbers to compare at the KFF Health Insurance Marketplace Calculator.

13. Look for alternatives in your preretirement years.

Many adults between 50 and 65 turn to marketplace coverage to plug a health insurance gap between having a workplace plan and qualifying for Medicare — say, if they’re laid off or retire early.

This group already faces higher premiums, paying up to three times more for coverage than younger adults, and they are now being hit particularly hard by the expiration of enhanced premium tax credits.

"They make too much to be eligible for Medicaid and are not old enough for Medicare," says Matt McGough, a policy analyst at KFF.

If you have a spouse who is covered through work, see whether you can be added to their plan, or check whether you qualify for retiree coverage through a previous employer. Or, if you retire at 63½, compare the cost of a marketplace plan against 18 months of COBRA coverage through the company you’ve just left to tide you over until you can get Medicare, McLanahan says.

With COBRA, you’ll pay the full cost of your premiums, plus an administrative fee, so a marketplace plan may still be cheaper, but it’s worth comparing the costs and coverage.

If you're on Medicare, also:

14. Lower your IRMAA.

If your income is even a dollar over certain limits, you will pay a surcharge, called the income-related monthly adjustment amount (IRMAA), on top of the base premiums for Medicare Parts B and D.

This year, individuals making more than $109,000 and joint filers with incomes above $218,000 will pay between $284.10 and $689.90 per month for Part B, depending on income, compared with $202.90 without IRMAA. The surcharge is based on the income you reported on your tax return from two years ago.

You can try to lower your MAGI to stay below the IRMAA threshold or lower your surcharge tier. One strategy is to prioritize withdrawals from accounts that are taxed at lower rates than ordinary income, McLanahan says.

The usual order is savings accounts, regular brokerage accounts, HSAs and Roth accounts, she says. Withdrawals from accounts such as traditional 401(k)s or IRAs are taxed as ordinary income and could lead to a jump in MAGI.

If your financial circumstances have declined significantly from the year on which your current IRMAA eligibility is based because of a "life-changing event" such as retirement, divorce or the death of a spouse, you can appeal by filing a short form (SSA-44) with the Social Security Administration.

15. Sign up for Medicare as soon as you are eligible.

"It’s never advisable to delay Part B," says Gio Florez, the director of enrollment and community engagement at the Medicare Rights Center. If you do, you’ll permanently pay premiums that are 10% higher for each 12-month period you were eligible but didn’t sign up. There’s also a penalty for late enrollment in Part D.

Your initial enrollment period encompasses the three months before you turn 65, the month of your birthday, and the three following months.

To avoid penalties, you must enroll during that seven-month period, or you must have creditable coverage elsewhere, such as through an employer or spouse’s employer.

If your employer coverage ends, you need to sign up for Medicare within eight months for Part B and within 63 days for Part D.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Health savings accounts (HSAs) offer a rare triple tax advantage: Contributions are tax-deductible, investments grow tax-free and withdrawals for qualified medical expenses are tax-free.

Those tax benefits come with an important responsibility, though. If you take tax-free withdrawals from your HSA, you should be able to document that the money was used for qualified medical expenses.

While IRS audits involving HSAs are relatively uncommon, they do happen. And when they do, many account holders struggle to locate receipts or remember which expenses they reimbursed themselves for earlier. Creating a simple system to save and organize HSA receipts can help protect your tax benefits and make it much easier to respond if questions ever arise.

What records HSA account holders should keep

Many people don't realize that the IRS requires you to keep records supporting HSA withdrawals. The following documents can help substantiate qualified medical expenses and reimbursements.

• Itemized receipts: Receipts for qualifying medical expenses need to include details specifying the type of item or service purchased, the date, the cost and any taxes or discounts.
• Proof of payment: Keep proof of payment for each purchase, such as a credit card statement or a canceled check. To stay organized, pair the proof of payment with the corresponding itemized receipt.
• Explanation of benefits (EOB): Your insurance provider’s EOB details the services provided and the amount that insurance covers. It also outlines what you may owe and helps prove that a service qualifies for HSA reimbursement.
• Detailed notes: Take notes on who each expense was for and whether your health insurance reimbursed you for the expense.

The easiest ways to organize HSA receipts

Keeping your HSA receipts organized can make tax time easier and help you respond quickly if you're ever audited. Whether you prefer digital storage, spreadsheets or dedicated tracking tools, several methods can help you keep your records in order.

Cloud folders: Storing receipts digitally in the cloud can reduce clutter and make records easier to retrieve if you need them later. Scan receipts and organize them in folders by year, using clear file names so specific expenses are easy to find. Popular cloud storage services, including Google Drive, Microsoft OneDrive and Dropbox, can make it easy to access records from multiple devices and create backups.

Budgeting apps: Many budgeting apps can also serve as receipt-storage tools. Apps like Monarch, YNAB and Quicken allow users to attach receipts, notes and other documents to transactions. Storing receipts alongside the corresponding expense can make HSA recordkeeping easier and help ensure supporting documentation is readily available if you choose to reimburse yourself years later.

Spreadsheet tracking systems: A spreadsheet can help you track key details such as the expense type, date and amount paid. You can create your own tracker or start with a template from platforms like Canva. Tools such as Google Sheets work well if you don't have Microsoft Excel, and you can access them from multiple devices. Just remember that you'll still need a separate system for storing copies of receipts.

Apps designed for HSA management: Apps designed for HSA management can help you store receipts, track expenses and identify HSA-eligible purchases. Popular options include Reimbursable, which is available for Apple devices, and TrackHSA.

Save PDFs from providers: Many healthcare providers make receipts and statements available online. Downloading and saving PDFs directly from provider portals can help you maintain a paperless recordkeeping system.

Use HSA provider tools: Some HSA administrators offer receipt storage, expense tracking or mobile apps as part of their accounts. These built-in tools can be a convenient way to keep your records organized in one place. If you change jobs, transfer your HSA or switch providers, make sure you know how to download and retain your records so you don't lose access to important documentation.

Keep security in mind when using digital tools to store and track receipts. Look for tools that allow you to create backups, and be sure that you create a secure password and keep it safe to protect your data and privacy.

Why some people delay HSA reimbursements for years

HSAs allow you to delay reimbursement for qualified medical expenses for years, provided you keep accurate records. Some account holders intentionally pay medical expenses out of pocket and leave their HSA funds invested, giving the account more time to grow tax-free.

While this strategy can be appealing, it can also backfire. If you lose receipts or other documentation, you may not be able to prove those expenses were eligible for reimbursement years later. If you're considering delayed reimbursement, it's important to create a reliable system for storing and tracking receipts and other supporting documents.

Common HSA paperwork mistakes that can create tax problems

HSA holders sometimes make paperwork mistakes that can create tax issues, especially during an audit. If you lose receipts, you may not be able to prove or claim HSA reimbursement for that expense.

When you use your HSA, be careful about double-dipping with insurance or tax deductions. If an expense is covered by or reimbursed by insurance, you can’t claim it as an HSA reimbursement. And if an expense is reimbursed by your HSA, you can’t claim it as a medical tax deduction.

Reimbursing nonqualified expenses with your HSA is another potential issue. The IRS provides specific guidance about what qualifies as a qualified medical expense, which includes expenses medically necessary for the "diagnosis, cure, mitigation, treatment or prevention of disease." Cosmetic procedures, spa treatments, unprescribed massages and more are nonqualified expenses.

Don’t forget to document over-the-counter purchases or medical necessity letters, too. This documentation is key to proving that your expenses qualified for HSA reimbursement, so gather these documents at the time of the expense and keep them organized and safe.

A simple annual HSA cleanup checklist

At the end of each year and before tax season, take some time and clean up your HSA documentation. Doing so will help keep you organized and will make filing taxes and navigating a potential audit much easier.

The following steps can help ensure you have your HSA receipts and documents organized:

• Download annual statements
• Reconcile reimbursements
• Back up receipts digitally
• Review qualified expense lists
• Store records with tax documents

Your HSA is only as good as your records

Keeping good records can help protect your HSA tax benefits and give you peace of mind. By creating a simple system now, you'll make it easier to track expenses, document reimbursements and stay prepared if the IRS ever asks questions.

The best recordkeeping system is one you'll use consistently. Whether you prefer cloud storage, spreadsheets or an expense-tracking app, a little organization today can help safeguard your tax savings for years to come.

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Question: Our new health plan is HSA-compatible. I know these accounts are great to have in retirement, but it seems like such a hassle. We are not the most organized couple, and I worry we won't use it all. Is it worth it?

Answer: High-deductible health insurance plans can be wonderful for people who are generally healthy and don't tend to see the doctor often. For people who tend to have frequent medical needs, they can be expensive.

But there's a silver lining. If you're enrolled in a high-deductible health insurance plan, you might be eligible to contribute to a health savings account, or HSA. Many financial experts are quick to point out that HSAs are a great tool to have on hand for retirement.

That said, HSAs require good record-keeping. They also have strict rules. If you take a withdrawal for non-medical purposes, you'll face taxes plus a 20% penalty (though the penalty is waived once you turn 65).

You might be wondering if an HSA is worth the hassle. Here's why it might be, even for people who loathe paperwork.

HSAs offer tax breaks galore

The reason so many people use IRAs and 401(k)s to save for retirement is the tax benefits these accounts offer. Traditional IRAs and 401(k)s allow contributions to be made with pretax dollars. Roth IRAs and 401(k)s allow for tax-free gains and withdrawals.

But as Jeff Judge, CFP and managing partner at Chesapeake Financial Planners, likes to point out, with an HSA, you get all three.

"Contributions reduce taxable income, growth is tax-free, and qualified withdrawals are tax-free. No other account does all three," he says.

Judge also likes to point out that HSAs are far superior to flexible spending accounts (FSAs).

"FSAs cap your contributions lower, expire at year-end or close to it, and aren't portable when you leave your employer," he explains. "An HSA is yours permanently, the balance carries over indefinitely, and you can invest it once the balance clears your plan's threshold."

HSAs offer loads of flexibility

It's true that HSA savers must worry about penalties for non-medical withdrawals prior to age 65. But that aside, Judge says, these accounts are extremely flexible.

"You don't have to reimburse yourself in the year the expense occurred," he explains. "Reimbursements can be pulled years or decades later if the expense was qualified."

That's a big deal because HSAs grow tax-free. This means that if you incur a $1,000 medical expense now but can pay for it out of pocket, you can leave the money in your HSA and get reimbursed 20 years later, at which point that $1,000 is apt to be worth a lot more.

"I had a client who tracked medical receipts for 11 years in a simple folder on her computer, then pulled $23,000 in reimbursements tax-free in the year before retirement," Judge says. "The IRS doesn't require you to keep receipts in any particular format. They just need to be legible and show the date, provider and amount."

Judge also points out that after age 65, an HSA works like a traditional IRA for non-medical expenses, in that you pay ordinary income tax on withdrawals but no penalty. In other words, there's really no risk of ending up with "too large" an HSA balance.

As Judge points out, an average couple can expect to pay approximately $345,000 (after tax) to cover healthcare costs in retirement, according to Fidelity's latest projections. Having a funded, tax-free bucket specifically for those costs is crucial.

Do HSAs hold up to inflation?

Of course, parking cash in an HSA for many years might seem like a bad idea, given that inflation could erode its purchasing power. Judge says that's a legitimate concern.

"If the inflation-adjusted return on your HSA investments is negative, yes, the tax benefit can erode," he says.

The key, therefore, is to invest your HSA strategically rather than keep your unused funds in cash.

"HSA funds invested in a diversified equity portfolio have historically outpaced medical cost inflation over long horizons," says Judge. "The mistake isn't treating the HSA as a long-term vehicle. The mistake is leaving the money in cash inside the account instead of investing it."

Try not to treat your HSA as a checking account

Another HSA mistake you might make? Dipping in regularly when you have other options for covering medical expenses, says George Dimov, CPA and founder of Dimov Tax.

Dimov says that if you constantly take HSA withdrawals to pay for medical bills, it won't function any differently than an FSA. That greatly erodes the benefit.

Tracking health care expenses can be a bit of a burden. But Dimov says it's worth doing.

"The HSA is not about convenience," he insists. "It is actually about doing the opposite of convenience. The whole strategy is paying bills out of pocket when you can afford to and letting the HSA grow."

That said, developing an efficient tracking system could make the process easier. That could mean scanning receipts and storing records digitally or using an app. It pays to spend some time developing a system, making sure it's backed up, and adding it to your digital estate plan.

Once you get into the habit of tracking HSA expenses, it might become less of a pain. That way, you get to reap the benefits of tax-free growth on your money while legally shielding income from the IRS along the way.

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Many Americans are dealing with medical debt, often from bills that showed up when they had the least ability to pay them.

Negotiation isn't a niche tactic these days — it's part of the process.

The difference now is that you actually have leverage in the form of access to real pricing data, better enforcement and clearer rules.

We're going to focus on what actually moves the number on your bill, what you can do before you ever get on the phone and how to manage your payment options.

What happens before you get your medical bill

When you're billed for a visit to your doctor or for a procedure, the insurance claim goes to your insurer, who applies your deductible, copays and coinsurance and sends you an explanation of benefits, or EOB. The EOB is not the bill.

The actual bill can sometimes show up before the EOB, sometimes after. And sometimes the numbers between the two don't line up.

Billing errors can happen because of incorrect coding, services being billed that weren't performed or documentation that doesn't match the care you actually received.

If something feels off, don't guess. Ask for an itemized bill. You need the medical codes that were used, the dates of care and line items. That's what you'll actually work from when you're negotiating.

The following terms matter, but only to the extent they affect what you owe:

• A deductible is what you pay before insurance does anything
• A copay is fixed amount per service
• Coinsurance is the percentage applied after the deductible
• The out-of-pocket max is your ceiling for in-network care

Many people are surprised when they're billed for out-of-network care. The federal No Surprises Act covers a lot of those cases now, but not all. It's worth checking out what the law says before assuming you're stuck with the bill.

The No Surprises Act also requires most health care providers to provide insured people a good faith estimate of the bill before an appointment or procedure.

Hospital pricing strategies in 2026

Hospitals used to operate behind a wall of inflated "chargemaster" prices. These haven't disappeared, but they're harder to hide.

Now:

• Hospitals have to publish standard charges: Gross, cash and negotiated rates
• Health plans have to show what they actually pay
• Estimator tools are easier to use and more accurate

You can now see how inconsistent pricing is.

Private insurance pays about 250% of Medicare rates on average. Sometimes more.

What that means is that Medicare sets a standard reimbursement rate for medical procedures. For example, if Medicare pays $1,000 for a knee surgery, a private insurer might pay $2,500 for the exact same procedure, so that's 250% of the Medicare rate.

This gap exists because private insurers negotiate rates separately, and hospitals often charge them significantly more. That gap is also what you can point to when you ask for a reduction in your bill.

Now that health care providers have to be more transparent, consumers can see that prices aren't standard. There's a range. And when your bill sits at the higher end of that range, you can ask for it to be brought closer to the more typical benchmark.

Facility fees are another quiet problem. You go in for something routine, and suddenly there's a separate charge just for the setting.

Ask about facility fees upfront. While asking doesn't mean you won't be charged, it's still useful to know in advance so that when you see your itemized bill, you can ensure it was applied appropriately.

You can also compare what the same service would cost in a non-hospital setting and ask about financial assistance or hardship-based adjustments.

Strategies for negotiating medical bills

Instead of immediately picking up the phone after you get a medical bill you think is too high, take the time to prepare for the negotiation.

If you bring up a vague complaint — saying something like, "This bill seems too high" — nothing will happen.

If you begin the negotiation with specifics, billing departments are more likely to take you seriously.

What you should do first:

• Look closely at the itemized bill. Look for duplicate charges, services you didn't receive and mismatched dates. These errors happen more often than people expect, and they're not small.
• Match the bill against your EOB. If something was denied or adjusted, find out why. Simple fixes can change the entire balance.
• Check the network status of all of the providers. Sometimes multiple providers are involved in your care. One out-of-network anesthesiologist can account for a major spike in your bill. This is where No Surprises Act protections may apply.
• Use estimator tools to explore prices. FAIR Health Consumer and Turquoise are good ones where you can establish a reasonable price range for the care you received.

If you're uninsured, ask your provider for the cash price of your care and inquire about their financial assistance policies. Nonprofit hospitals are required to have them. Don't assume you won't qualify.

When you're ready to negotiate, remember that clarity about what you're asking for is what matters the most.

First, ask to speak with a patient financial counselor. If you can't pay, say so right away. If you want a lower bill, keep it simple.

• Reference specific charges, rather than make general complaints
• Use actual numbers, especially Medicare comparisons
• Ask about discounts (such as prompt pay, cash rates, charity care)

Document everything in the negotiating process — names of the people you talked with and when and what they said. Get confirmations in writing before you pay anything.

If a claim was denied and it looks fixable to you, request resubmission. Then escalate through your insurer if needed.

This part isn't quick. It's a process.

Using technology and resources

A few resources and organizational tips that can help:

• Your insurer's cost estimator and messaging system
• A basic spreadsheet to track the calls you make and your outstanding balances
• Put everything in writing where possible

If the process gets overwhelming, consider contacting an organization that might be able to help, such as Patient Advocate Foundation or Dollar For. Your local medical system might also have a program that could help, such as Trinity Health of New England's RIP Medical Debt.

You don't need to figure everything out yourself.

Post-negotiation: Managing and paying medical bills

If you can't settle the debt in a lump sum, consider asking for a payment plan.

Jeffrey Zhou, CEO and founder of Fig Loans, works with borrowers navigating tight budgets where one unrealistic payment can throw everything off.

"The mistake we see most often is people agreeing to a number they know they can't sustain, just to close the situation. It feels like progress in the moment, but it usually leads to missed payments and more pressure later.

"The better move is to be upfront about what you can actually afford and lock that in from the start."

Many providers offer a payment plan with a 0% interest rate, though some might try to route you to third-party financing. Be careful there.

Medical credit cards and deferred-interest plans might look manageable — until they're not. One missed payment, and the math changes quickly. A smaller, consistent payment is better.

Luckily, things are improving with credit reporting. Paid medical collections are no longer reported, and many smaller debts have been removed. There's also a push to remove medical bills entirely from credit reports.

But unpaid medical bills can still go to collections.

How to avoid future billing issues

Most problems can be caught early. Before you get care, if possible:

• Check costs
• Confirm network status of the providers involved
• Ask about facility fees
• Request written estimates

These steps are even more important in areas like behavioral health, where treatment plans can span multiple services over time.

If you're getting care that combines both mental health and substance use support, such as dual diagnosis treatment, get clarity upfront on what's included, how it's billed and whether different providers or facilities are involved, because that's where unexpected costs tend to show up.

When you arrive for care:

• Double-check the insurance details
• Ask about financial assistance screening

After you've received care:

• Read every correspondence you receive
• Compare the bills to the EOBs

Flag issues quickly — waiting makes everything harder.

Ultimately, negotiating with your health care provider to try to lower your medical bills is less about a single quick fix and more about an organized process that requires preparation, clear communication and persistence.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Question: We're retiring at 63 with $5.7 million. My wife wants to buy long-term care insurance, but it's very expensive. I think we can just self-insure. Who's right?

Answer: If you're retiring with a large sum of money, you may be aware that there's one expense that could eat away at your nest egg over time — health care. Even if you're relatively healthy at the start of retirement, there's no guarantee you won't end up with medical issues later on.

Furthermore, as you age, you might eventually need more than just medical care. You might also need custodial care, or non-medical assistance with everyday living.

Unfortunately, that type of long-term care is not covered by Medicare. And if you're footing the bill yourself, you should know it could be a big one.

On a national scale, the annual median cost of a non-medical in-home caregiver was $80,080 in 2025, according to CareScout. Assisted living, meanwhile, cost the typical resident $74,400.

If you need a nursing home, you might really pay a bundle. The annual median cost for a shared nursing home room was $114,975 in 2025. For a private room, it was $129,575.

These are just averages and can be considerably higher in some parts of the country. For this reason, pre-retirees are often advised to look into long-term care insurance.

The problem with long-term care insurance, though, is that it isn't cheap. According to the American Association for Long-Term Care Insurance, as of 2024, the average annual premium for a $165,000 policy with no inflation adjustment was $950 for a single male and $1,500 for a single female when purchased at age 55. That same policy for a 55-year-old couple averaged $2,080 a year.

If you and your spouse are retiring at 63 with $5.7 million, you might assume that you have enough money to cover long-term care expenses as they arise. But your wife might prefer the protection of long-term care insurance. Here's how to figure out the best way to pay for this potentially large expense.

You probably have enough money to skip the insurance

As of 2022, the average household made up of people your age had about $538,000 in retirement savings, according to the Federal Reserve. For a nest egg that size, a single year of long-term care could be catastrophic. For a $5.7 million nest egg, even a few years of long-term care might only make a dent.

"With $5.7 million in liquid assets, this couple doesn’t need long‑term care insurance from a purely financial standpoint," says Michael Murray, AIF, CPFA, and President at Peabody Wealth Advisors. "If they’re comfortable absorbing the risk, self‑insuring is entirely reasonable. At this wealth level, long‑term care coverage isn’t about preventing financial ruin. It’s about reducing uncertainty."

That said, the benefit of having long-term care insurance, says Murray, is predictability. With insurance in place, you may not have to take a six-figure withdrawal to cover long-term care.

Even if you have a large nest egg, an expense that large can be uncomfortable. It might also get in the way of inheritance plans. So there's a value in having that protection, even if you technically have enough money saved that you don't need it.

As Dan Peterson, President and Managing Partner at E4 Insurance Services, explains, "Insurance is a transfer of risk. When you buy long-term care coverage, you pay a known cost so that an insurance company will absorb an unknown future cost."

He suggests that high-net-worth people determine exactly which assets would fund their care. Then, he says, it's important to see how that impacts overall financial plans.

If you come to the conclusion that you can absorb a few years of long-term care costs without impacting your goals, you may be able to skip the insurance. Otherwise, buying a policy could make sense.

Your wife's feelings are valid

If your wife seems more worried than you are about long-term care, there may be a reason for that.

"Statistically, men die earlier," Murray explains, "which means wives often shoulder caregiving responsibilities — an emotionally and physically draining role that can shorten a caregiver’s lifespan."

Furthermore, Murray says, if the husband passes first, the surviving spouse may need to rely on children or paid care. Insurance can help ease that burden.

You may want to consider a different type of coverage

For some people, a reason not to buy long-term care insurance is that if you don't end up using it, you're potentially giving up a lot of money that could otherwise become part of your estate plan. That's why Murray suggests a different approach to buying coverage.

"Many high‑net‑worth households gravitate toward hybrid life/long-term care policies funded with a lump sum," he explains. "If they never use the benefits, the remaining value passes to heirs or charitable causes, which feels more like repositioning assets than spending money on something they may never use."

Peterson agrees. A hybrid policy, he says, can still return value to your family if care is never needed.

"Instead of writing a blank check from your portfolio, you dedicate specific dollars to protect both your income plan and the people you care about," he says.

Read More

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• I Want to Retire, but I Have to Keep Working so My Adult Kids Have Insurance

I am currently covered by my wife's health care insurance, which is better than the plan my employer offers. However, her plan doesn't offer a health savings account (HSA).

Fortunately, my company has a flexible spending account (FSA) plan, which can be used to pay for most of the same expenses as an HSA.

In 2025, I signed up for an FSA for the first time. It was near the end of the enrollment deadline, and I elected a total plan-year pre-tax contribution amount of $1,000 without digging deeply into the details of the plan.

Had my employer structured its FSA in a less generous way, my lack of due diligence could have cost me dearly.

HSAs vs FSAs — the differences matter

HSAs are available only for employees enrolled in a high-deductible health plan (HDHP). FSAs are generally offered to those in non-HDHPs.

Both plans enable employees to make pretax contributions that can be used to pay for out-of-pocket medical and dental expenses. Both accounts can generally be used to pay for chiropractic care, weight-loss programs and qualified prescription and over-the-counter medications.

But there are key differences. Once employees enroll in Medicare, they can no longer contribute to an HSA, but they can continue to make FSA contributions.

HSA funds remain in the account until employees use them. They can take their HSA to another employer or move it into a special HSA with a brokerage company when they retire.

HSAs assets grow tax-free, and there are never any taxes on withdrawals if they're used to pay for qualified health care expenses.

FSA contributions, on the other hand, follow a use-it-or-lose-it rule. You elect to contribute a certain amount during a plan year. If you don't use the entire amount you contribute, you might end up forfeiting that balance.

In my situation, I had $400 left in my FSA at the end of 2025. When the new plan year started on January 1, any new claims could be paid for only by my 2026 plan-year contributions.

Understandably, I was worried that I would lose this leftover $400 and called my FSA provider to express my concern. This was a very useful call, since the plan representative patiently described the options some FSA plans can offer to help employees avoid losing their unused contributions.

Grace periods

Some FSAs allow employees a grace period of up to two and a half months to make new claims that are paid by previous year's contributions.

For example, for a plan year that technically ended on December 31, 2025, employees could continue to use their 2025 balances to pay for 2026-plan year claims until March 15, 2026.

'Run-out periods'

Many plans also offer a "run-out period" after the plan year ends. During this time frame, which generally lasts 90 days, employees can still file previous-year claims on remaining funds.

For example, for an FSA whose plan year ended on December 31, 2025, employees could file leftover claims for 2025 medical expenses against their remaining 2025 balance until March 31, 2026.

My plan doesn't offer a grace period. And its run-out period would be no use to me since I didn't have any additional 2025 medical expenses to claim.

FSA rollovers to the rescue

However, to my relief, my FSA plan allows me to roll over up to $660 in leftover 2025 contributions to my 2026 account after 90 days have passed.

I can tap these assets to pay only for 2026 plan-year expenses. And if I have combined 2025/2026 contributions left at the end of the year, I will be able to roll over only the 2026-adjusted maximum of $680 into my 2027 balance.

While all FSA plans can offer run-out periods, they can either offer grace periods or rollovers. They can't offer both.

Personally, I'll take the rollover option anytime.

Another misconception corrected

Until my call with the FSA plan representative, I always thought that I needed to have sufficient funds in my FSA to pay for any claims.

For example, in February, I wanted to use my FSA debit card to pay for a $200 dental bill, but as of the end of January, only $85 in pretax contributions had been deducted from my paycheck.

The representative assured me that I can start making claims up to my 2026 full-year FSA contribution of $1,000 even if the money isn't in the account yet.

That's because the FSA provider (and my employer) assume I'll continue to work there the entire FSA plan year. If I leave my company midyear with claims that are higher than my actual contributions, I will have to reimburse my employer out-of-pocket for this overage.

Conversely, if I leave with unused contributions remaining in my FSA account, I'll have to forfeit them.

That's fair. Unlike HSAs, contributing to an FSA can be a bit of a gamble. You have to calculate the risk of possibly losing what you've contributed if your health care costs are minimal during a plan year.

That's why you should avoid the mistake I made when I enrolled and carefully estimate what your qualified health care costs will be for the plan year — because you can't change your contribution amount when the enrollment period ends.

And it's important to know which provisions — if any — your employer allows to help you potentially avoid losing unused FSA funds.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

IRS tax season is upon us, but if the first time you turn your attention toward taxes every year is when you're gathering documents to file, the chances are you're missing out on some loopholes that can help lower your tax obligation.

These tips can help you (legally) reduce what you owe every year.

1. Supercharge your retirement savings with the mega backdoor Roth

Roth IRAs have both income and contribution limits set by the IRS, making direct contributions to Roth IRAs generally unavailable to some high earners.

One workaround for those high earners is the mega backdoor Roth strategy in which after-tax contributions are made to a 401(k) and then converted to a Roth 401(k) or Roth IRA.

Only employer plans allowing after-tax contributions are eligible for this strategy. This option might be worth exploring with your financial adviser if your income is too high to contribute to a Roth IRA, allowing you to increase the tax-free savings in your retirement accounts.

2. Turn your HSA into a stealth retirement account

Health savings accounts (HSAs) are designed as tax-advantaged accounts to hold funds for medical expenses, but a loophole allows you to stealthily use your HSA as a retirement account of sorts.

Since HSA funds don't expire every year, the funds can continue to grow tax-free. And since contributions to HSA accounts can be tax deductible, your annual taxable income can be reduced by your HSA contributions.

Withdrawals aren't taxed as income as long as the funds are used for medical expenses (those age 65 or older can use the funds for non-medical expenses without penalty but with the funds taxed as ordinary income).

HSAs don't have required minimum distributions, making them incredibly flexible in retirement.

Of course, HSAs can also be valuable as a way for those with high-deductible health insurance plans to pay their medical expenses, but when used as a stealth retirement account by those who qualify for these accounts, HSAs can nicely augment additional retirement funds.

3. The charitable 'bunching' strategy that doubles your deduction

Your generosity to the causes you care about can help lower your tax obligation, but if you're taking the standard deduction every year, there's a chance you're missing out on the opportunity to maximize your deductions.

A donor-advised fund (DAF) allows you to contribute assets (such as cash, stock and real estate) to an established, managed fund. Since the donation goes into the fund, there is some flexibility as to when you can take the deduction.

Even if the assets aren't allocated to a charity immediately, you can still take the deduction right away.

Since DAFs allow flexibility in what you can contribute, the potential for lowering capital gains tax by donating appreciated assets shouldn't be ignored.

Donating appreciated stocks directly into a DAF (instead of selling the stock and donating the proceeds) maximizes your impact while potentially lowering the tax you owe.

4. Family payroll power: Pay your kids and cut your taxes

Hiring your children to work for your business can make a lot of sense from the perspective of positioning them to live productive lives (or perhaps even someday become your successors), but it also makes sense when it comes to reducing your tax obligation.

The wages you pay your children for their work can be deductible as a business expense and, depending on their age and income, might not be taxable to them.

The trick here is that your children must actually work for you (you can't just add them to the payroll), the pay must be appropriate for their role, and you must keep records of their employment just as you would with any other employee.

Consider maximizing the benefits by having your children contribute to a Roth IRA with their wages, making the arrangement a win/win for you and them.

5. Harvest losses to offset gains (even in good years)

Contrary to what you might have heard, tax-loss harvesting isn't just for down markets. Instead, it's a potentially effective way to reduce what you owe in taxes while also balancing your portfolio.

Losses can offset capital gains, then up to a $3,000 loss can be claimed on your taxes against your ordinary income annually. Any remaining loss can be carried over into subsequent years.

You're not allowed to turn around and repurchase the stocks you sold at a loss (or stocks that are "substantially identical") within 30 days of the sale if you're claiming the loss.

But tax-loss harvesting is one of the simplest legal tools to fine-tune your taxable income and keep your portfolio efficient.

Like any of the other loopholes mentioned above, tax-loss harvesting is a strategy that should be discussed with your financial adviser to ensure it's something for which you qualify and that it's done correctly with proper documentation throughout the process.

Any strategy that reduces your tax bill can theoretically invite additional scrutiny from the IRS.

These strategies are legal methods for reducing your tax bill — they're not covert schemes that will automatically raise red flags and trigger an audit. Use these loopholes correctly and you may just reduce the amount of money you owe to the IRS.

I often speak with the families I serve about seeking joy. What brings about joy during tax season? A lower tax bill, of course.

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal, and/or tax advice. Investment advisory services offered through CWM, LLC, an SEC Registered Investment Advisor. Mitlin Financial is located at 140 Adams Avenue Ste. B-12 Hauppauge, NY 11788

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Medicare Advantage plans, formally Part C of Medicare, offer Medicare beneficiaries an alternative to original Medicare and have been successful in signing up Medicare-eligible Americans. However, 2025 was tough for Medicare Advantage plans and their customers. Policy changes during the past year have impacted deductibles, out-of-pocket costs, provider networks and prior authorization determinations.

The changes "have contributed to increased confusion, lower member satisfaction and a widespread lack of trust among Medicare Advantage plan members," according to J.D. Power's 2025 U.S. Medicare Advantage Study.

Among its findings, the study showed a 29-point drop in overall customer satisfaction with Medicare Advantage plans, led by a decline (39 points) in members' overall level of trust in their Medicare Advantage plan.

Not all Medicare Advantage programs are alike, however. Plans that provide new digital tools, broader networks and social support services. are more likely to win over subscribers, according to the J.D. Power Study.

Medicare Advantage (MA) enrollment has surged from just 19% of the eligible population in 2007 to 54% in 2025. This majority share represents 35 million out of the 62.8 million beneficiaries with both Medicare Parts A and B. While MA enrollment grew at a robust 9% annually between 2007 and 2024, that momentum is beginning to shift; since February 2025, plans added 1.1 million subscribers, marking a more modest 4% increase. Notably, the bulk of recent growth (83%) is driven by Special Needs Plans (SNPs), which are tailored specifically for individuals with chronic conditions, complex healthcare needs, or dual eligibility for Medicaid.

What Medicare Advantage plans offer

Unlike original Medicare, which is government-run insurance, Medicare Advantage plans are administered by private insurance companies. These plans cover the same benefits of original Medicare and typically include extra coverage such as out-of-pocket maximums and funds to cover dental or hearing exams and fitness benefits. Most Medicare Advantage plans also include prescription drug coverage at no additional cost to the beneficiary.

In 2026, the out-of-pocket limit for Medicare Advantage plans cannot exceed $9,250 for in-network services and $13,900 for in-network and out-of-network services combined. While traditional Medicare has no out-of-pocket cap on spending, Medicare Advantage plans have limited provider networks and apply cost management tools such as prior authorization, which traditional Medicare generally does not. In 2026, Medicare began testing out an AI-powered prior authorization plan in six states.

What Medicare Advantage enrollees like about their plans

The 2025 U.S. Medicare Advantage study by J.D. Power measured the customer satisfaction of Medicare Advantage enrollees and the most important factors driving customer satisfaction. This year, the study reflected how Medicare Advantage insurers and polices were impacted by policy changes that impacted many facets of member care and costs. The overall satisfaction rates have dropped, primarily as a result of a loss of trust.

“With so much rumbling in the marketplace right now about increased government oversight, policy changes, and profitability challenges confronting Medicare Advantage plans, it can be misleading for plans to conclude that the significant decline in member satisfaction is a byproduct of changes that are outside their control,” said Christopher Lis, managing director of global healthcare intelligence at J.D. Power.

Key findings of the 2025 study:

• The factors that drive customer satisfaction: Respondents gave Medicare Advantage plans an overall customer satisfaction score of 623 (on a 1,000-point scale). This is a 29-point drop from last year's score of 652. The top drivers of customer satisfaction for top plans are new digital tools, broader networks and social support services.
• Lack of trust drives satisfaction decline: A 39-point drop in members' overall level of trust in their Medicare Advantage plan was the primary cause of the decline in customer satisfaction. Factors such as product/coverage offerings meeting needs and the ease of doing business also saw significant declines in this year’s study.
• Plans that deliver "digital satisfaction" score higher overall: The ability to engage with members through digital channels resulted in higher satisfaction. Digital satisfaction was, on average, 98 points higher among members of the high-performing plans. More of these members (52%) "find the features or tools offered on their plan’s website very easy to use" as opposed to lower-performing plans (40%). That's probably why only 76% of members of low-performing plans have used their member portal vs 85% of high-performing plans.

Overall customer satisfaction index ratings for Medicare Advantage plans in surveyed states

Medicare Advantage subscribers in Pennsylvania (653), Michigan (647) and Ohio (649) give the highest satisfaction to the Advantage plans in their states, with survey respondents giving plans in Pennsylvania the highest marks among the 10 states surveyed. Georgia (622), Texas (607) and New York (600) had the lowest overall customer satisfaction scores and New York had the lowest of all states in the study.

Blue Cross Blue Shield plans topped the overall satisfaction rating for five states (Illinois, Michigan, New York, Ohio, and Texas). UnitedHealthcare was a distant second with top ratings from only two states (Georgia and North Carolina). Humana finished last in three states (Michigan, North Carolina, Ohio) and was second from the bottom in four states (California, Georgia, Pennsylvania and Texas).

How the study was conducted:

The 11th annual U.S. Medicare Advantage Study is based on eight factors (in order of importance): level of trust; able to get health services how/when I want; helping to save me time or money; product/coverage offerings meet my needs; ease of doing business; people — representatives, call center agents; resolving problems or complaints; and digital channels.

The 2025 U.S. Medicare Advantage Study is based on the responses of 10,888 members of Medicare Advantage plans in 10 market-based U.S. regions: California, Florida, Georgia, Illinois, Michigan, New York, North Carolina, Ohio, Pennsylvania and Texas. It was fielded from January through June 2025.

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In recent columns, I have written about longevity literacy and the need for long-term-care planning. To see how women fit into this picture, I interviewed Maddy Dychtwald, cofounder of AgeWave, a research and consulting firm focused on aging, and author of Ageless Aging: A Woman's Guide to Increasing Healthspan, Brainspan and Lifespan. Dychtwald interviewed dozens of researchers, scientists and physicians for her book, and these are some of her key takeaways.

What do women in particular need to know about aging?

For women, there is good news, bad news and better news. The good news is that we have won the longevity lottery; on average, women live between five and six years longer than men. The bad news is that we spend more years in poor health in our later years. We are twice as likely to suffer from cognitive decline and Alzheimer's.

What's the better news?

Up to 90% of our health and well-being is within our control. We used to think genetics was the be-all and end-all in determining our health, but now we know that lifestyle and environment have far more to do with how well we live than we thought.

Can you give an example?

If there were a silver bullet, it would be exercise. If you exercise regularly, the impact on heart and brain health can be extraordinary. And muscle strengthening is the longevity superpower. Building your muscle strength can reduce the risk of dementia, improve your mood and lower the risk of chronic ailments such as heart disease and stroke.

You say that social connections are also crucial.

Healthwise, loneliness is the equivalent of smoking 15 cigarettes a day. That doesn't mean you have to be a social butterfly. You just need a handful of people — your spouse or partner, a best friend — whom you can go to for companionship. And don't neglect what we call micro connections. Smile and strike up a conversation with the clerk at the supermarket checkout line.

What advice do you have for women who are single?

Women seem to thrive with strong networks, so build your support ecosystem. Cultivate a few close friends. Make sure you know your neighbors. Have a physician you can count on to answer your calls in an emergency. Strengthen your social network via micro connections. Also, you need to have clear legal and financial documents and a financial plan.

How should women approach long-term care?

Start the conversation early with your family, friends or trusted advisers. Let them know what your wishes are and how you plan to pay for the costs, whether through savings, long-term-care insurance or tapping home equity.

Many people assume that long-term care will mean a nursing home, but that's not always the case. For an older woman who is single, living in a planned community that offers services and socialization can be a great option. It's not about looking at your ultimate decline but about preserving dignity, control and a sense of choice.

Let's talk about finances.

Your earning power is one of your greatest longevity assets, so keep working as long as you can. While you're in the workforce, take advantage of contributions to your 401(k) or similar retirement plan, and automate wherever you can. When you retire, consider part-time work, eliminate debt, create a little security with paycheck-for-life insurance products.

Talk about finances with your spouse or partner and with your friends. Having the right knowledge is a powerful tool. Financial literacy is longevity literacy.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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If you'd like to have a stronger relationship with your primary care doctor — and quick access to them when you want to chat or schedule an appointment — direct primary care may be worth a look. With a DPC arrangement, you pay a membership fee, and in exchange you get unlimited access to certain primary care services, such as disease screenings, chronic-condition management and laboratory tests. DPC practices don't accept health insurance, and you pay the membership fee out of pocket.

Compared with a traditional primary care office, which may manage thousands of patients, a DPC practice sees an average of 413 patients, according to the American Academy of Family Physicians (AAFP). With a smaller load, DPC doctors can usually offer same-day or next-day appointments and spend more time with patients.

Teresa Lovins, a primary care physician and owner of Lovin My Health DPC in Columbus, Ind., says that she sees patients for an average of an hour, allowing her to discuss their medical concerns in depth. The average primary care appointment lasts about half an hour, according to a 2024 study from the Journal of the American Medical Association.

Direct primary care is similar to concierge care, another membership-based model for primary care. Both involve a relatively small group of patients and focus on personalized services. But concierge memberships often cost more, with the annual tab ranging from $2,000 to $10,000, depending on the services you sign up for, according to consumer website ValuePenguin.

That compares with a typical annual cost of $600 to $1,200 for direct primary care, according to the AAFP. Concierge practices usually offer more in-depth physical exams and screenings. And concierge care doctors may bill your health insurance company for certain services.

Although the number of DPC practices has risen to more than 2,700 across the U.S., according to advocacy group DPC Frontier, they’re not available in all areas. You can see whether any DPC practices are near you with online directories, including mapper.dpcfrontier.com and dpcalliance.org/find-a-dpc-physician.

Covering the costs

Your DPC membership fee includes the cost of most preventive and primary care services. But you'll need to have health insurance to get coverage for emergency room visits, care from specialists, surgical procedures and other services your primary doctor does not provide, says Moti Gamburd, chief executive officer of home health care agency CARE Homecare, in Los Angeles.

One option is to use a high-deductible health plan, which offers lower premiums and a larger deductible than a typical policy. If your high-deductible plan is paired with a health savings account, you can set aside pretax money (up to $4,400 for self-only coverage in 2026, or $8,750 for family coverage) in the HSA and use it tax-free for qualifying medical expenses.

Good news on the HSA front for DPC patients: Beginning January 1, 2026, direct primary care membership fees are a qualified medical expense for tax-free HSA withdrawals, thanks to provisions in the One Big Beautiful Bill Act. HSA funds may cover up to $150 monthly for individuals, or $300 monthly for a family membership.

Additionally, the law clarifies that enrolling in a direct primary care arrangement does not disqualify someone from being able to contribute to a health savings account if they also have an eligible high-deductible health policy.

Previously, DPC patients who had a high-deductible policy could be barred from contributing to an HSA.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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A Health Savings Account (HSA) is often viewed as a tool for current medical expenses, but its "triple-tax advantage" makes it one of the most powerful and flexible retirement savings vehicles available. By strategically saving and investing your HSA funds during your working years, you can unlock the full potential of these accounts to cover health care costs and even supplement your income in retirement.

After age 65, the account can even serve as a supplemental income source. At that point, the 20% penalty for non-qualified medical withdrawals disappears, leaving the funds subject only to standard income tax — similar to a traditional IRA or 401(k).

The triple-tax advantage

The core strength of the HSA lies in its three layers of tax benefits:

• Tax-deductible contributions: Money you contribute goes in tax-free or is tax-deductible if you contribute post-tax
• Tax-free growth: Your investments and interest grow tax-free
• Tax-free withdrawals: Withdrawals are tax-free if used for qualified medical expenses at any age

When you reach retirement, the third benefit becomes even more versatile.

What Can You Spend HSA Funds On in Retirement?

Health care is often the single largest expense for retirees. Your HSA is perfectly designed to meet this need in the most tax-efficient way possible. The ability to reimburse yourself for Medicare premiums, coinsurance, co-payments and deductibles can put a significant sum back into your pocket.

At any age, money withdrawn for qualified medical expenses is completely tax-free and penalty-free. In retirement, this can include:

Covering long-term care costs

Long-term care expenses often go unplanned, although 56% of people will need long-term care services within their lifetime. The Life Insurance Marketing and Research Association (LIMRA) estimates that only 3% of Americans over 50 have any long-term coverage (LTC). As noted, you can use HSA funds to pay LTC insurance premiums for yourself or your spouse; a portion of that payment is tax-free as a qualified medical expense.

The amount you can withdraw annually that will be treated as qualified medical expenses depends on your age. It is equal to the IRS tax deductible limits for LTC insurance and is indexed for inflation annually.

Limits on HSA reimbursement for long-term care insurance premiums:

Age attained before close of year/2026 annual limit
40 or less $500
More than 40 but not more than 50 $930
More than 50 but not more than 60 $1,860
More than 60 but not more than 70 $4,960
More than 70 $6,200

Pay out-of-pocket now, reimburse yourself later

One strategy to stretch your HSA is to pay current medical expenses out-of-pocket with non-HSA funds and keep the receipts for reimbursement at a later date.

Because your HSA funds never expire, you can let the balance grow and invest tax-free for decades. Then, in retirement, you can reimburse yourself for those previous, qualified expenses — potentially pulling out a large, tax-free lump sum that can be used for any purpose. Be sure to keep meticulous records of all receipts.

Remember that any expenses incurred before you established your HSA aren’t considered qualified medical expenses and aren't eligible for reimbursement.

An important difference between HSAs and FSAs: Unlike FSA accounts, there is no time limit to request HSA reimbursements. You can pay for qualified medical expenses out of pocket and reimburse yourself days or even decades later. You might not need to submit receipts to your HSA provider to get reimbursed, but keep those receipts for tax purposes.

Favorable rule changes when you reach 65

Once you reach age 65, your HSA essentially transforms into an even more flexible Traditional IRA or 401(k). At this age, you can take penalty-free withdrawals for any reason.

• Before age 65: Withdrawals for non-medical expenses are taxed as ordinary income and subject to a 20% penalty.
• At age 65 and older: The 20% penalty disappears. Any withdrawal used for non-medical expenses is treated just like a withdrawal from a traditional 401(k) or IRA: it is taxed as ordinary income, but is penalty-free.

HSA "don’ts"

1. Don't contribute to your HSA if you're within six months of applying for Medicare

This can be a costly mistake. If you're 65 or older, your Part A coverage will start up to 6 months back from the date you sign up for Medicare or apply for benefits from Social Security. You're not eligible to make contributions to your HSA after you have Medicare. If your Medicare Part A coverage overlaps with when you made contributions, you may have to pay a tax penalty.

2. Don’t use your HSA for Medigap premiums

As Medigap premiums aren’t considered qualified expenses for HSA purposes, they will be subject to income taxes. As you get older, chances are good you’ll have other medical expenses that would be a better use of those funds, because those expenses allow you to take advantage of the HSA's most powerful advantage: tax-free withdrawals to pay medical expenses. And those funds will continue to grow when they remain in the account for use at a later time.

3. Avoid non-qualified withdrawals by obtaining medical necessity documentation

For any non-traditional expense you intend to treat as a qualified medical expense, ensure you have a letter of medical necessity from your provider. For instance, expenses for modifications to your home or vehicle due to a disability or physical limitation.

And keep all your receipts and invoices, especially for any lodging or travel expenses. This documentation can be essential if there are any questions about a claim.

Important considerations for retirees

• Stop contributing when enrolling in Medicare- A critical rule to remember: You cannot contribute to an HSA once you enroll in Medicare (Part A and/or Part B). And, because anyone receiving Social Security is automatically enrolled in Medicare Part A and Part B when they turn 65, it's essential to plan your final contributions carefully. You should stop contributing to your HSA six months before your intended Medicare enrollment date to avoid potential tax penalties.
• No required minimum distributions (RMDs)- Unlike traditional retirement accounts, 401(k)s, or traditional IRAs, an HSA is not subject to required minimum distributions (RMDs) at age 73. This allows your money to continue to grow tax-free for your entire life, making it an excellent asset for long-term health planning and estate purposes.
• The spouse and beneficiary factor- If your spouse is your beneficiary, the HSA can simply transfer to them upon your death, and they will continue to enjoy the same tax advantages. If a non-spouse is named as the beneficiary, the account typically loses its HSA status and becomes taxable upon transfer.

HSAs offer unique benefits to retirees

The strategic use of an HSA in retirement is financial planning. By maximizing contributions, investing wisely, and carefully documenting your medical receipts, you can ensure that your HSA provides the ultimate financial security — tax-free money for medical expenses and penalty-free flexibility for all other needs after age 65.

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There's a new threat that could force Americans to scrap their early-retirement plans: skyrocketing health care costs. The enhanced Affordable Care Act (ACA) subsidies that expired at the end of 2025. That means 24 million Americans will see a sharp spike in their health care costs unless Congress extends the money-saving premium tax credits.

The most at-risk segment of the population relying on ACA health insurance is middle-income Americans aged 50 to 64. This group is still years away from being eligible for Medicare coverage and faces a doubling or tripling of medical care costs, according to data from KFF, an independent health policy organization.

The scrapping of this key ACA subsidy, coupled with the estimated 18% increase in premiums for ACA Health Insurance Marketplace plans, is making health care unaffordable for many Americans. Early retirees and the self-employed, who don’t get health coverage at work or through Medicare, would see some of the steepest increases, KFF data show.

Half of ACA enrollees eligible for the enhanced tax credit are ages 50 to 64, according to KFF. "It’s a budget buster," said Jamie Cox, managing partner at Harris Financial Group. "Health insurance is there to basically save your life. But it can also kill your retirement."

Just how much will ACA premiums rise?

The out-of-pocket marketplace cost increases are sizable enough to blow a hole in many Americans' retirement plans.

A 50-year-old would see their annual costs nearly double from $5,328 to $9,828, KFF estimates. The enhanced subsidies kick in when an individual’s income is 400% higher than the federal poverty level, or income of around $62,600 or more.

A 60-year-old with an income just about the subsidy cutoff line ($62,700, or 401% of the federal poverty level), for example, could pay roughly $9,600 more per year, or $800 more a month for a mid-range ACA marketplace plan, according to KFF.

A 64-year-old nearing the Medicare start age of 65 could see their annual costs more than triple from $5,328 to $16,500, an annual increase of more than $11,000, adding nearly $1,000 to their monthly cost.

"Older marketplace enrollees face some of the largest financial burdens if the enhanced tax credits expire," KFF policy analyst Matt McGough noted in a blog post.

Premium payments in 2026 for people currently receiving the tax credit will more than double, from $888 in 2025 to $1,904 in 2026, if ACA enhanced premium tax credits expire, according to KFF.

It's a catch-22 for most Americans: Many can't afford health insurance, but they can't do without it, either.

Will Congress rescue ACA premium affordability?

There is, of course, hope that Congress will act soon to extend the enhanced subsidies. The House of Representatives on Jan. 8, 2026, passed a three-year extension of ACA subsidies. But it's unclear whether the Senate will take up the House measure, amend it, and sign off on it.

The Senate has been hammering out its own deal, which would extend the federal health-insurance subsidies for two years. This shorter extension window, though, would likely come with limits, such as income caps to reduce the number of Americans eligible for the subsidy and antifraud measures.

Stay tuned to see how the Senate moves forward on this key affordability issue early in 2026. Keep in mind as well that President Donald Trump has indicated that he may veto any efforts to extend ACA subsidies.

The ACA cost increases are a wake-up call. Americans who get coverage through the marketplace may get a brief reprieve if Congress extends the subsidies. But it doesn't change the longer-term affordability challenge: health care costs are becoming increasingly cost-prohibitive for many Americans and, as a result, are forcing many older Americans to redo the math to see if they are financially able to retire early or if soaring health insurance costs are effectively wrecking their plans.

The ever-rising cost of health care may also force early retirees who have already stopped working to revisit their decision and re-run the numbers to see if they can still afford to stay retired. The rising cost of health care might also emerge as a top budgeting concern for proponents of the so-called FIRE movement (Financial Independence Retire Early) who save the bulk of their income and live frugally so they can stop working as early as their 30s and 40s.

No doubt, health care costs, which have always been a concern for retirees, are now more top of mind than ever. "The cost of health care is one of the major issues and concerns for most of our clients and retirees," said Rob Williams, head of wealth management research at Charles Schwab. "So, if you're planning to retire early, making sure you can manage and pay for any health care costs you have is significant."

Health care challenge for everyone: building rising costs into a retirement plan

The challenge, of course, for anyone wanting to retire early or who is already retired but too young to qualify for Medicare, is to build these extra costs into their financial plan. Unfortunately, many Americans have not done so. One in five Americans (and 25% of Gen Xers between the ages of 46 and 61) say they have never considered health care needs during retirement, according to Fidelity Investments' most recent Retiree Health Care Estimate report. And nearly two of 10 Americans (17%) said they have "taken no action at all when it comes to planning for health expenses in retirement."

Adding to the financial challenge is the fact that the median retirement age is 62, or three years before Medicare eligibility, according to the Transamerica Center for Retirement Studies. The reasons people retire earlier than initially planned include health reasons (46%), job loss (16%), organizational changes (16%), job unhappiness (14%), and retirement buyout (9%), according to Transamerica. Somewhat troubling is the fact that only 21% retired early because they could afford to do so.

Cox says the health care cost challenge is not just an issue facing ACA marketplace users, but also a budgeting obstacle for all Americans, whether coverage is obtained through the marketplace, an employer, or directly from a health insurer. "This is a universal problem across both public and private health insurance," said Cox.

Harris Financial Group, for example, provides financial planning advice to Verizon employees and retirees that helps them understand and optimize the money and benefits they receive from the company. Cox says Verizon’s highly subsidized, once-stable union health care plan is also set for a steep premium increase in 2026.

"Health care costs have increased to the point where even my union people have seen their health care premiums double starting this year," said Cox. "Some people's premiums are going to go up from like $600 to $1,800. It's almost like a second mortgage."

The potential financial fallout from skyrocketing health care premiums is real for early retirees, says Cox. "It evaporates their discretionary spending budget," he adds. "Their discretionary budget is now health insurance. They're not taking trips or doing as many things retirees normally do. And many of them are trying to re-enter the workforce just to get health insurance."

Cox says one of his clients, an ex-Fortune 500 executive with plenty of money who was considering early retirement, opted instead to stay on the job to keep his affordable health insurance coverage.

One short-term fix is to dip into your emergency fund to pay the higher premiums. But tapping a rainy-day savings account over the long haul to make health insurance payments isn't ideal, says Williams. "An emergency fund is traditionally used to cover something like a car repair or some other emergency, not an ongoing expense like health care premiums," said Williams.

How early retirees can plan for rising health care costs

Build extra costs into your financial plan. If you can, make adjustments to your saving, spending, and investing to help you cover the higher health care costs. In short, if you want to retire early, build higher expected costs into your budget now. "Covering these higher medical expenses might require cutting other expenses in your budget, or lead some people to find part-time work to earn additional income," said Williams.

Withdraw from savings. Tapping savings, whether from a high-interest-bearing savings account, a brokerage account, or a retirement plan like a 401(k) or IRA, can help make up the difference between last year’s premiums and future higher premiums.

Digging into your retirement savings, however, is not ideal, as it will shrink your nest egg and reduce the growth potential of your retirement account, says Cox. "It's a more painful option," said Cox. Taking distributions from your retirement account, however, could make sense if you're close to age 65 when Medicare kicks in, adds Cox. "It’s not a great strategy if you're in your 50s," Cox added.

Wait it out until Medicare kicks in. If you're 63 or 64 and just a year or two away from Medicare, you might simply bite the bullet and crimp and save or tap savings to pay the higher premium until more affordable Medicare coverage kicks in at age 65. One of Cox's clients, a husband and spouse on Verizon's union health care plan, for example, both turn 65 this year. The couple's combined insurance premium will drop from $2,700 to $700 when they switch over to Medicare.

Shop around for a better deal. If you're seeking lower premiums, shop around. Just like shopping for a new car or big-ticket items like home appliances, conduct research to find a health care policy that offers similar coverage to 2025 at a lower sticker price.

Consider jettisoning adult children from your plan. You might be able to net savings if you take your adult children under age 26 off your family health care plan and put them on their own plan, says Cox. "People of this age tend to pay less in premiums because they're generally healthier," said Cox. This money-saving strategy can work if the employer's "family" premium is priced much higher than "employee + spouse" coverage and the adult child moves to a cheaper individual policy.

The bottom line: if your health care costs are going up sharply, you must find a way to "bridge the gaps." You must fund both the gap between your old premium and your new, higher premium, as well as the years before you are eligible for Medicare coverage, says Williams.

Said Williams: "Have you planned for that gap? What are your assets to bridge the gap? What strategies will you employ?"

Read More

• The Average Cost of Health Care by Age and US State
• Average Net Worth by Age: How Do You Measure Up?
• How to Retire at 50 or 55
• Want To Retire at 55, 60, 62, 65, 67 or 70? Ask Yourself These Questions First

These days, it seems as if every other TV commercial is for yet another insurance product. While consumer choice can be a good thing, not all insurance is as essential as ads make it seem.

Although insurance plays an important role in anyone's financial plan, some products might be more about protecting the insurance company's bottom line rather than yours. Insurance decisions shouldn't be made in a vacuum.

You should consider your entire financial picture. That way, you can identify the gaps and figure out the coverage you truly need, along with any you could do without. It's also important to do an annual insurance review, as certain life events or milestones can change your insurance needs.

Above all, never buy insurance hastily based on fear, especially if it involves the products on this list.

If you're renting a car in the United States, decline that additional insurance the rental car company is trying to sell you. If you already have a standard car insurance policy, it'll cover you when you're driving the rental. You don't need rental car insurance.

If you're driving abroad, you still might not need to opt into the extra coverage if you book with one of the many credit cards that cover rental car insurance.

The same might also apply to rental car reimbursement coverage. This is an optional type of car insurance that would pay for a rental car while your car is being repaired.

But if you live in a multicar household, consider whether you need rental car reimbursement coverage. It might be a hassle to borrow your spouse's or your teen's car for a few days while your car's in the shop. But the lower premium you'd enjoy by dropping that coverage could be worth it.

As risky as it might sound, there's a point at which you shouldn't bother paying for more than the minimum car insurance required by your state.

If your car is older or has otherwise lost most of its market value, you'd likely be better off dropping things such as collision insurance or comprehensive insurance.

The most your insurance company will ever pay is the current market value of your car. Meanwhile, dropping to minimum coverage could save you a thousand or more per year.

At a low enough market value, it makes more sense to pocket those premium savings than to pay for full coverage that would only ever pay a few thousand dollars.

If you've splurged on your dream vacation, you (rightly) feel as if you shouldn't expose yourself to the risk of canceled flights, closed hotels or other unexpected emergencies.

Travel insurance is a great way to make sure you'll get your money back if anything goes wrong. But, if you've got the right travel rewards card, there's a good chance you have some basic protections already.

More credit cards are offering basic trip cancellation coverage and, sometimes, even throwing in lost or damaged baggage insurance.

Depending on your trip and how you book, you might need to buy supplemental coverage for things such as medical emergencies or a cruise-specific policy if your credit card's travel insurance isn't enough. For quick weekend trips or low-cost vacations, your credit card's coverage is probably enough.

If you're still working but nearing retirement, consider whether your long-term disability insurance is worth keeping. The premium for an employer group plan typically increases with age.

The policy also will limit the payout period until a particular age, such as 65. As this age nears, your maximum possible benefit shrinks. This is especially true for someone who could have retired earlier but is still working.

If you've got a fully funded retirement, you're no longer dependent on your salary. The higher insurance bill might not be worth the dwindling maximum payout, especially if it's just protecting income you could technically live without.

A stroke, heart attack, life-threatening cancer and an organ transplant are just some of the serious health issues that critical illness insurance covers. If you develop one of these conditions, the insurer sends you a lump sum cash payment, ranging from $10,000 to $50,000, that can be spent however you want.

Despite this flexibility, it's not always as useful as it seems. Your health insurance will already put some limits on your out-of-pocket costs in these scenarios.

Before paying for this added layer of protection, review your potential out-of-pocket costs for health insurance to see whether you need critical illness insurance or if you could manage the bills with savings.

All the dysfunction and uncertainty in Washington has led to a new product: Social Security insurance. It's a type of annuity, an insurance contract that turns part of your savings into future income.

When you add this insurance to an annuity, the insurer promises your annuity payment will increase to cover any government shortfall that results in a smaller Social Security benefit.

However, the odds of that happening, at least in the near future, are slim. Retirees have strong voter turnout. More than half of the voters in 2020 and 2024 were 50 and older, and 28% were 65 and older, according to the Pew Research Center.

Cutting Social Security benefits when such a large chunk of those who turn out to vote are either collecting Social Security or planning to do so soon would be a huge risk for anyone hoping to get re-elected.

While you might be used to having them when your employer is subsidizing premiums, individual dental and vision policies might not be worth buying after you retire.

Without those employer subsidies, the cost of this coverage will skyrocket. Not only are premiums higher for individual plans, but they could also have high out-of-pocket costs for care, an exclusion of major services for the first year of coverage and a limited annual coverage limit.

Instead, you might be able to pay less per year on vision and dental costs by simply paying cash. Some providers might offer subscription plans that include all your preventive care for a low monthly price that would be lower than an insurance premium.

You can also look into alternatives such as dental savings plans, in which you get access to heavily discounted services for a low annual fee.

Say you've got term life insurance that will provide a $500,000 payout to your beneficiaries if you pass. Once you hit $500,000 in retirement savings, you can consider dropping the insurance and just designating your beneficiaries as heirs to your retirement fund.

However, if your family would need the cash right away, one benefit of life insurance is that the proceeds aren't taxable, while an inherited 401(k) is (if they withdraw it rather than rolling it into another retirement account).

If you want to drop life insurance but make sure your family receives the full $500,000 payout, you can wait to cancel your policy until your 401(k) balance is high enough that your family would receive $500,000 after taxes.

No one disputes that long-term care in the United States is an expensive risk. A private room in a nursing home costs more than $90,000 a year, on average, according to the U.S. Department of Health and Human Services.

Still, traditional long-term care insurance policies have high premiums that make them hard to justify. As you get older, those high premiums get even higher. Because it only applies under such narrow, specific circumstances, the hefty cost is usually not worthwhile.

As an alternative, you can look into a long-term care hybrid (LTC-hybrid) life insurance policy. With these policies, if you don't end up needing long-term care, your heirs will receive the cash as a death benefit instead. Your premiums aren't going to waste on a policy that never gets used.

Before buying even a hybrid policy, do the math on how much long-term care would cost. For example, some expenses, such as food, housing and utilities, would be provided by the long-term care facility.

Even when one spouse enters long-term care while the other remains in the couple's home, some daily living expenses are still reduced. If you're considering long-term care insurance, ask yourself whether you need to cover the full cost of a nursing facility or if you could go with a partial benefit that's more affordable.

Although the classic example is rental car insurance, there's often a fair amount of overlap with the insurance people have. Your car insurance covers medical bills after a car accident, but so could your health insurance.

Your home insurance covers liability for an injury on your property and so does an umbrella policy, which should offer enough supplementary coverage, if needed, to protect your net worth.

Given this overlap, it's possible that the limits on your existing policies are higher than necessary because they cover the same risk. If you have umbrella insurance, for example, drop your liability coverage on other policies to the minimum required.

While insurers usually require a certain amount of liability coverage on your home or car insurance before they'll offer an umbrella policy, there's no reason to go above that requirement.

Another sneaky way you end up paying for redundant coverage is when life events render your policy redundant. If your teen moves out for college and gets their own car insurance, for example, there's no reason you should pay the added cost of keeping them listed as a driver on your policy.

Review your insurance policies regularly and think about whether you still need the coverage for which you're paying. The money you save by slashing unnecessary premiums can go toward boosting your emergency fund or toward paying for better coverage in the areas you do need it.

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Turning 65 should be a milestone of freedom, not a source of financial stress. Yet, for millions of Americans, navigating the first step of Medicare — the Initial Enrollment Period (IEP) — becomes a confusing high-stakes gamble.

The IEP is a critical seven-month window centered on your 65th birthday, and missing it can trigger something far worse than a temporary inconvenience: lifetime late enrollment penalties added to your Part B and Part D premiums, along with costly gaps in coverage.

Whether you are ready to retire or plan to keep working, understanding this single, immutable deadline is the first and most important step to securing your health care future.

The Medicare Initial Enrollment Period (IEP)

The Initial Enrollment Period (IEP) is the first time you are eligible to sign up for Medicare Part A hospital insurance and Part B medical insurance.

The IEP is a 7-month window centered around the month you turn 65:

• 3 months before the month you turn 65
• The month you turn 65
• 3 months after the month you turn 65

Birthday Rule: If your birthday falls on the first day of the month, your Medicare eligibility is moved forward one month. Your IEP and coverage start one month earlier.

The penalties for missing the IEP

Medicare penalties are surcharges added to your monthly premiums for as long as you have that part of Medicare, except for Part A. These penalties are designed to encourage timely enrollment.

If you miss your IEP and do not qualify for a Special Enrollment Period (SEP) (usually due to having creditable employer coverage), you face two serious consequences:

How employer insurance factors in

Deciding when to enroll is highly dependent on your current or your spouse's employer-provided group health plan and the size of the employer. Before your IEP begins, you should always speak with your employer's Benefits Administrator or HR department and ask these two questions:

• "How many employees are currently on the payroll?" Why? This determines if Medicare your is primary or secondary insurance.
• "Is our employer-provided prescription drug coverage considered creditable coverage by Medicare?" Why? If not, you may need to enroll in Part D during your IEP to avoid a Part D penalty later.

Primary and secondary coverage

When you have Medicare and other health coverage, such as a group plan, retiree coverage, or Medicaid, each plan is called a payer. The payment process follows a specific sequence, known as "coordination of benefits."

• Primary payer: This plan pays the medical bill first, up to the limits of its coverage.
• Secondary payer: The remaining balance is then sent to this plan, which pays for services covered by its policy.
• Your responsibility: If the secondary payer doesn't cover the full remaining balance, you may be responsible for the rest of the costs.

Important reminder for those covered by a group or retiree plan: If your group health plan or retiree coverage is the secondary payer, you might be required to enroll in Medicare Part B before they will agree to pay their portion of the costs.

Employer-provided insurance

When working for a 'large employer' (20 or more employees): If you, or your spouse, are still working and covered by a group health plan from an employer with 20 or more employees, the employer's plan is considered the 'Primary Payer'. It can be used in place of Medicare Part B and you can generally delay enrollment in Part B without penalty.

Since Part A is usually premium-free, many people enroll in it at 65, even while working. It serves as secondary insurance in the case you are hospitalized.

A Special Enrollment Period (SEP) is available when employer coverage ends: When your current employment ends or your employer coverage ends (whichever comes first), you qualify for a penalty-free SEP to enroll in Part B. This SEP lasts for 8 months after the employment or coverage ends.

Caution: If you have a Health Savings Account (HSA), you cannot contribute to it once you enroll in any part of Medicare (even premium-free Part A). You must stop contributions at least six months before you plan to enroll in Part A.

Working for a 'small employer' (fewer than 20 employees): If you or your spouse is still working and covered by a group health plan from an employer with fewer than 20 employees, Medicare generally becomes the 'Primary Payer' at age 65.

In this circumstance, you must enroll in Medicare Part B during your IEP. Why? If you delay Part B, your employer's plan may only pay a small fraction of your medical bills (or nothing at all), resulting in massive out-of-pocket costs, and you will face the late enrollment penalty.

Retiree coverage and Medicare Part B: The critical difference between retiree coverage vs active coverage is whether your insurance is considered "creditable coverage based on current employment." Retiree coverage, insurance offered by a former employer, union or government entity, does not qualify you for a Special Enrollment Period (SEP) to delay enrollment in Medicare Part B. The only time you can delay Part B without penalty is if you (or your spouse) are actively working and covered by an employer group health plan (EGHP).

Most employer-sponsored retiree plans are designed to work with Medicare, not replace it. Once you turn 65, most retiree plans expect Medicare to pay first.

Before making any enrollment decisions, contact your former employer's benefits administrator/HR department and ask these crucial questions:

• "Am I required to enroll in Medicare Part A and Part B to keep my retiree health coverage?" (The answer is almost always yes.)
• "Is my retiree prescription drug coverage considered creditable coverage?"  If the answer is no, you must enroll in a Part D plan during your IEP.
• "If I enroll in a separate Medicare Part D plan, will I lose my entire retiree health plan?" (Some plans will terminate all your retiree benefits if you enroll in a separate Part D plan.)

Different rules for retiree coverage and Medicare Part D: The rules are slightly different for prescription drugs (Part D). You can delay enrollment in a Medicare Part D plan without penalty only if your retiree drug coverage is considered creditable coverage. Creditable means the plan is expected to pay, on average, at least as much as standard Medicare Part D coverage.

For prescription drug coverage, your former employer or union must send you a notice each year, before October 15, informing you whether your drug coverage is creditable. You must keep this notice as proof.

COBRA Coverage: COBRA is generally not considered "coverage based on current employment" because you (or your spouse) has been 'separated from service." This means an employee's ties with an employer have ended, due to retirement, resignation, termination or death.

You will qualify for a SEP when you lose your employer-provided insurance and have up to eight months after you stop working (or lose your health insurance, if that happens first) to sign up for Part B without a penalty, whether or not you choose COBRA. The end of COBRA coverage will not trigger a second SEP.

The process for enrolling in Medicare Part A and Part B

If you're 65 or older, you can enroll in Parts A and B, or Part A only. You can delay Part B if you're already covered through an employer group health plan. If you want to sign up for a Medicare Advantage or Part D drug plan, you have to enroll in Medicare first. You can make specific elections after enrollment.

You may be surprised to learn that enrollment for original Medicare (Part A and Part B) is handled by the Social Security Administration (SSA), not Medicare itself.

Automatic Enrollment: You will be automatically enrolled in Part A and Part B if you are already receiving Social Security retirement benefits or Railroad Retirement Board (RRB) benefits at least four months before you turn 65.

If you are automatically enrolled, you will receive your Medicare card in the mail approximately three months before your 65th birthday. You can choose to opt out of Part B if you have qualifying employer coverage. You can't disenroll from Medicare Part A. Since most people don't pay a premium for Part A, it can serve as secondary insurance if you are hospitalized.

Manual Enrollment: If you are not receiving Social Security benefits at age 65, you must sign up manually during your 7-month IEP.

Online: Applying through the official Social Security website. This is the fastest method, and you can apply for Medicare only if you are delaying Social Security retirement benefits.

If you want to sign up online, you must create or sign in to your personal my Social Security account.

• By phone: Call the SSA at 1-800-772-1213. Tell the representative you want to sign up for Medicare Parts A and B, or just Part A.
• In person: If you are more comfortable applying in person, then your best option is to visit your local Social Security office.

The process for signing-up for Medicare Advantage (Part C) and Part D drug plans

Medicare Advantage and Part D insurance coverage is managed by private insurance companies. If you want to enroll in either plan, you generally sign-up directly with the insurer after enrolling in Medicare.

Medicare Advantage Plans (Part C): You can enroll directly with a private insurance company after you have enrolled in both Part A and Part B. You can do this during your IEP.

Part D (drug plans): You can enroll through the Medicare Plan Finder tool on Medicare.gov, by contacting the specific insurance plan directly, or by calling 1-800-MEDICARE. You must sign up for this during your IEP to avoid penalties.

Knowing your IEP saves you money

Before your seven-month window closes, it is essential to calculate your start and end dates precisely. Don't forget about the impact of the Medicare birthday rule. If your birthday falls on the first day of the month, your Medicare eligibility is moved forward one month. Your IEP and coverage start one month earlier.

If you have employer coverage, confirm your company’s employee count and obtain proof of creditable coverage in writing. Don't rely on assumptions or general advice; rely on the specific rules of the IEP.

Taking these decisive actions now guarantees you avoid the painful late enrollment penalties, ensuring your retirement is defined by financial peace, not preventable premium surcharges.

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Do you have or are you thinking about opening a Flexible Spending Account (FSA)? Here’s a potentially good reason to consider it. The IRS recently raised the limits on tax-advantaged healthcare and dependent care contributions.

With an FSA, employees can make payroll deposits into their accounts to build a cushion to pay insurance deductibles or pay for qualifying medical expenses, or other items not covered by insurance.

Deposits are made with pre-tax dollars, before any federal or state income taxes, Social Security taxes, or Medicare taxes are withheld from your paycheck. That means your FSA deposits are not included in your taxable income. In other words, it’s essentially “tax-free.”

Want to know more? Read on.

What’s an FSA and what’s so great about it?

FSAs are employer-sponsored savings accounts that allow employees to set aside money from their paychecks, before taxes, to pay for healthcare and health-related dependent care expenses.

This tax-free money establishes a revolving, self-replenishing fund from which an employee can pay insurance deductibles, copays, and other qualified medical expenses.

Qualifying FSA expenses include, but are not limited to:

• Prescription medications and most over-the-counter medications (like cough remedies)
• Medical equipment and supplies, like monitoring devices (e.g., CPAPs), canes, hearing aids, first aid, and emergency care
• Denture and orthodontic care, like adhesives, retainers, and dental treatments like fillings and crowns
• Prescription eyeglasses and contact lenses, including over-the-counter contact lens care and maintenance supplies.

FSA downsides to watch out for

Having access to tax-free money to pay healthcare bills can be great, but it’s a good practice to keep tabs on how much you’re putting into your account.

As mentioned, the IRS has announced higher contribution limits for next year (2026): $3,400, up from $3,300 in 2025.

But if you contribute more than the FSA threshold to your account ($3,400 for 2026), your deposits lose their tax advantage and will be taxed as wages at your applicable income tax rate.

The fact that FSA deposits are made through your employer’s payroll system can act as a brake of sorts on the amounts you’re contributing.

Another reason to monitor your FSA balance is that if you don’t spend all the money in your FSA by your health plan’s year-end, the balance will be forfeited to your employer. That’s pretty harsh.

• Employers may allow employees a grace period after the plan year’s end to spend the funds, or allow the employee to roll over a certain amount (up to $680 for 2026) to the following plan year.
• But an employer isn’t required to provide that relief.
• And if an employee leaves the company, the money in their FSA account stays with the employer. That's because under IRS rules, the account belongs to the employer, not the employee.

In either case, it’s in your best interest to exhaust all your FSA account funds before the plan year ends or before you leave the company.

Is an FSA right for me?

It depends. Employers may elect to offer FSAs to employees in addition to their standard benefits package, but it’s not a requirement. In addition, only employers can sponsor FSAs, so if you’re self-employed, you’re out of luck. (There are alternatives for you, but they’re governed by different rules.)

However, FSAs can be good for people with ongoing routine medical expenses — prescription and non-prescription drugs, glasses, contact lenses, and products for their maintenance, denture and orthodontic care products, and other dental treatments.

Dependent care FSA limit 2026

Employees with child or adult dependents who require care so the employee can work can open a dependent care FSA in addition to a healthcare FSA (these are separate accounts under IRS rules).

And some good news: The dependent care FSA limit is significantly increasing for 2026.

For 2026, the maximum dependent care tax-free contribution is $7,500, up from $5,000 in 2025. Eligible expenses include:

• Childcare (day care, pre- and after-school care)
• Summer camps (not overnight)
• Babysitters or nannies (work-related)
• Adult day care for a dependent parent or spouse

Not FSA-eligible? Consider an HSA

Under IRS rules, FSAs can only be sponsored by employers as part of an employee’s health benefits package, and in fact, the account belongs to the employer. So, individuals who aren’t employed are ineligible for an FSA.

But the self-employed and others aren’t left in the cold when it comes to a tax-advantaged savings account. They can open a health savings account (HSA), with all the tax benefits of an FSA and more, provided they meet a key requirement: they must be enrolled in a qualifying high-deductible health plan (HDHP).

However, HSAs come with their own contribution limits and pros and cons. For more information, see Kiplinger’s report: An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for You.

Read More

• What Medical Expenses Are Deductible?
• Hidden Costs and Tax Benefits of Health Savings Accounts
• Child Tax Credit: How Much Is It for 2025 and 2026?

Sen. Josh Hawley (R-Mo.) is pushing a new “No Taxes on Healthcare Act” that would let households deduct up to $25,000 in out‑of‑pocket medical costs, including health insurance premiums they pay themselves.

This proposed deduction would be in addition to the standard deduction, which most taxpayers currently claim.

The proposal comes on the heels of a massive 2025 Trump/GOP tax and spending bill that offers taxpayers several new deductions for car loan interest, overtime pay and tip income.

However, Hawley's proposal, which would have to clear significant political hurdles to advance in Congress, wouldn’t replace the Affordable Care Act (ACA) premium tax credits.

Those credits, which help millions of Americans afford health care premiums, have been at the heart of debate on Capitol Hill since the government shutdown.

Will there be significant changes to health care tax breaks in 2026?

No taxes on health care?

In a release about the bill, Hawley points out that “nearly 41 percent of adults in the United States have some form of debt stemming from medical expenses. In the last year alone, a recent Gallup report found that 31 million Americans borrowed money to pay for health care.”

To address that, Hawley’s bill would expand the existing medical expense deduction, which currently is available only to taxpayers who itemize and only for expenses above 7.5% of adjusted gross income.

His plan would move that deduction “above the line,” so that any taxpayer could claim up to $25,000 per person in out‑of‑pocket medical spending, including premiums they pay directly for coverage.​

The proposal, announced in early December, is framed as “no taxes on healthcare,” echoing recent GOP slogans such as “no tax on tips” and “no tax on overtime.”

What about ACA tax credits?

ACA premium tax credits lower marketplace premiums up front based on income and plan cost, and enhanced subsidies created by pandemic‑era legislation are set to expire at the end of 2025 unless Congress acts.

• Hawley’s bill doesn’t extend those ACA subsidies and doesn’t create a new ACA‑style credit.
• Instead, his proposal offers a separate federal tax deduction that would come into play at filing time, not at the time you purchase a health care plan.​

Because deductions reduce taxable income rather than premiums directly, they generally deliver less relief than a dollar‑for‑dollar subsidy, particularly for lower‑income households with little tax liability.

If enhanced ACA credits lapse, many marketplace enrollees could see substantial premium increases in 2026, regardless of Hawley’s idea. Nonitemizers would still likely be left weighing higher monthly bills against a possible year‑end tax break

Who might benefit?

Generally speaking, an above‑the‑line health deduction would skew toward taxpayers with enough income and out‑of‑pocket costs to fully use it. Think middle‑ and upper‑middle‑income households buying their own coverage without employer help.

Lower‑income consumers who currently rely on ACA subsidies, Medicaid, or employer plans with modest worker premiums might see little or no direct gain from a health care tax deduction such as Hawley’s. That's because they often don't pay enough income tax to fully benefit from a large deduction.

And ... a tax deduction wouldn't prevent coverage loss for people who can't afford the higher gross premiums that will come if enhanced ACA credits expire.​

Health care premiums: Bottom line

Key mechanics of the Hawley plan remain vague, including a major fiscal issue: How the government would offset the revenue loss from such a significant, broadly available health care tax deduction.

For now, the long and short of it is that Hawley’s bill is just a proposal.

Senate Democrats, meanwhile, continue to push for an extension of ACA subsidies rather than a deduction‑based alternative.

The health care tax debate rages on.

Read More

• What's in Trump's 2025 Tax Overhaul Bill?
• ACA Tax Credits and the Government Shutdown
• Most Overlooked Tax Deductions and Credits
• Premium Tax Credit: Are You Eligible?

Medicare premiums and deductibles increased in 2026 from 2025 levels, with Part B premiums rising by about 9.7%. The Part A deductible increase was smaller at 3.7%.

To get the most from your plan, it’s important to understand your premiums, deductibles and out-of-pocket costs, which will vary depending on your plan and income.

In addition to your regular premiums, you could also owe a monthly surcharge on your Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA). High earners will pay an additional Part B surcharge, ranging from $81.20 to $487. The Part D surcharge can be as small as $14.50 and tops out at $91.

Medicare open enrollment runs from October 15 to December 7 annually. During this period, you can switch from original Medicare to a Medicare Advantage plan, or vice versa. You can also choose a new Advantage plan or Medicare Part D prescription drug coverage.

Medicare Part A deductible  

The Part A deductible for hospital admissions increased to $1,736 in 2026. That's an increase of $60, up from $1,676 in 2025. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.

There’s no limit to the number of benefit periods you can have in a year. This means you might pay the deductible more than once in a year.

For patients hospitalized for more than 60 days, the co-insurance amount in 2026 is $434 per day (up $15 from $419 in 2025) for the 61st through the 90th day of hospitalization. The co-insurance payment rises to $868 a day, up $30 from $838 in 2025, starting on the 91st day of hospitalization.

For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 of extended care services in a benefit period is $217, up $7.50 from $209.50 in 2025.

Reminder: Part A doesn't cover long-term care. It also doesn't cover most nonmedical personal expenses, such as custodial care that helps with daily activities, such as eating and bathing.

Medicare Part B monthly premium

In 2026, the standard monthly premium (PDF) is $202.90, up $17.90 from $185 in 2025. That's an increase of almost 10%. The annual deductible for all Medicare Part B beneficiaries is $283 in 2026, $26 more than the 2025 deductible of $257.

Part B covers doctor visits, outpatient services, home health care, durable medical equipment and many preventive services. You usually pay 20% of the Medicare-approved amount for Part B-covered services after you meet your deductible. This amount is called your co-insurance.

High earners will pay more. The income-related monthly adjustment amount (IRMAA) is a surcharge for people with income above a certain amount that must be paid in addition to their Medicare Part B and Part D premiums.

The IRMAA is calculated every year. That means if your income is higher or lower year after year, your IRMAA status can change. If the Social Security Administration (SSA) determines you must pay an IRMAA, you’ll receive a notice with the new premium amount and the reason for the determination.

This surcharge shifts costs back to the beneficiary. If you're a higher-income beneficiary, you'll pay a larger percentage of the total cost of Part B based on income reported on your annual tax return. You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount.

In 2026, if your 2024 AGI is above $109,000 if you are single or $218,000 if you’re married and file jointly, you’ll pay an extra amount in addition to your plan premium. That surcharge ranges from $81.10 to $486.50.

Medicare Part D prescription drug plan

The average premium for a Part D standalone plan, which covers drug costs, is expected to be $34.50 in 2026, down $3.81 from $38.31 in 2025. If you have a Medicare Advantage plan that charges a Part D total premium, that cost is projected to decrease to $11.50 in 2026 from $13.32 in 2025, down $1.82. These rates aren't set by Medicare, but vary according to the plan you select.

The maximum Part D deductible is set at $615 for 2026, an increase of $25 from the 2025 deductible of $590. The cap on Part D out-of-pocket costs is $2,100, up $100 from 2025.

The cap on out-of-pocket expenses applies only to medications covered by your Part D plan and doesn't apply to spending on Medicare Part B drugs. Part B drugs are usually vaccinations or injections that a doctor administers, and some outpatient prescription drugs.

However, some vaccines are covered at no cost, including flu shots and COVID boosters. The list of free vaccinations is updated annually.

Optional payment plan. Part D enrollees can spread out their out-of-pocket costs over the year rather than face high out-of-pocket costs in any given month. To do this, you'd pay a capped monthly installment over the course of the calendar year instead of all at once at the pharmacy. Here's how that would work:

If you opt into the Medicare prescription payment plan (PDF) through your Part D sponsor, you won't be charged at the pharmacy; your plan is automatically notified. Instead, your plan will send you a monthly bill showing the amount owed for your prescriptions and payment instructions.

Your regular monthly plan premium (if applicable) will be billed separately. You can directly opt in to the Medicare Prescription Payment Plan through your Part D plan sponsor.

IRMAA. A surcharge for high earners also applies to your Medicare Part D drug coverage. In 2026, if your 2024 AGI is above $109,000 if you're single or $218,000 if you’re married and file jointly, you’ll pay an extra amount in addition to your plan premium. That surcharge ranges from $14.50 to $91. You’ll be liable for this surcharge if your Medicare Advantage Plan includes Part D drug coverage

Tip: Medicare recommends beneficiaries consider getting a drug plan even if you don’t take many drugs now or your current out-of-pocket drug costs are low. If you enroll in a plan with a low monthly premium, you can avoid the late enrollment penalty. Since all plans must cover a wide range of drugs that people with Medicare take, it will come in handy if your needs change.

Medigap

Medicare doesn’t cover everything; there is a coverage gap when it comes to co-insurance, copays and deductibles. Part A inpatient hospital has a $1,736 deductible per benefit period and Part B pays for only 80% of doctors’ visits and other outpatient services. In addition, Medicare doesn’t cover supplemental services such as basic dental care, eye appointments or hearing aids.

You have two options for handling your uncovered expenses. You can purchase Medigap insurance to complement your original Medicare insurance or enroll in a Medicare Advantage plan.

Private insurers, not Medicare or the government, offer Medicare supplemental insurance or Medigap policies that cover deductibles and copayments. The policies are categorized by letters A through N.

All plans offer the same basic benefits, no matter where you live or from which insurance company you buy the policy. Every policy that goes by the same letter must offer the same basic benefits; the only difference is usually the cost.

Due to the phasing out of the popular Medigap Plan F, Plan G is now the plan of choice for many. The glaring difference between F and G is that Plan G doesn't cover the Part B deductible.

Plan G also covers “excess charges” that doctors who don’t accept the Medicare-approved amount as full payment can charge you, up to 15% above the Medicare-approved amount for services and procedures. Anyone enrolled in Medicare before 2020 can still enroll in plans F and C.

If you choose a high-deductible F or G plan, you can expect to pay a deductible of $2,950 before your policy pays anything, including co-insurance, copayments, and deductibles. This is an increase of $80 above the 2025 deductible of $2,870.

Medicare Supplement Plan K and Plan L are cheaper than other Medigap policies and have an out-of-pocket limit. These two plans have lower monthly premiums, since you’ll also share the co-insurance costs for your Plan K (50%) and Plan L (25%) up to your annual maximum limit.

Read What’s the Best Medigap Plan? to find out more about the 10 different Medigap plans you can choose from.

Medicare Advantage plans

A Medicare Advantage plan is an alternative to original Medicare, making Medigap coverage unnecessary. Medicare Advantage Plans are sometimes called “Part C” or “MA Plans." If you join a Medicare Advantage Plan, you’ll still have Medicare, but you’ll get your Part A and Part B coverage from your Medicare Advantage Plan. You're prohibited from buying a Medigap plan while enrolled in an MA plan.

These plans provide medical and prescription drug coverage through private insurance companies. Depending on the plan you choose, you might pay a monthly MA premium, in addition to the Medicare Part B premium. The average monthly premium is expected to decrease to $14 in 2026, down $2.40 from $16.40 in 2025.

Advantage policies charge lower premiums than Medigap plans but might have higher deductibles and copayments, and your choice of providers might be more limited than with original Medicare. Some enrollees might need to find new coverage, as some major insurers have reduced the number of plans they're offering in 2026. Check your Annual Notice of Change to see if the plan reductions impact you.

Unlike original Medicare, Medicare Advantage plans have a maximum out-of-pocket limit. In 2026, your maximum expenses are $9,250 for in-network services and $13,900 for out-of-network services. This is a decrease from $9,350 and $14,000, respectively, in 2025.

However, plans might set lower limits that apply only to Parts A and B and do not include Part D costs.

Related Content

• Medicare Premiums 2026: IRMAA Brackets and Surcharges for Parts B and D
• Cash In on Your Medicare Advantage Flex Card Perks Before They Disappear
• 9 Medicare Changes in 2026

If you have Medicare Part B and/or Medicare Part D prescription drug coverage, you could owe a monthly surcharge based on an income-related monthly adjustment amount (IRMAA). This surcharge is paid by Medicare beneficiaries for Parts B and D Medicare, in addition to the standard premiums, if their taxable income exceeds certain thresholds. For 2026, the IRMAA income brackets and surcharges increased by approximately 3% and 9%, respectively.

The Medicare surcharge in 2026 applies to beneficiaries with income exceeding $109,000 (for single filers and married filing separately) or $218,000 (for joint filers). For these beneficiaries, total monthly Part B premiums range from $284.10 to $689.90. Part D surcharges range from $14.50 to $91.00.

The IRMAA is calculated on a sliding scale with five income brackets, topping out at $500,000 for individual filing and $750,000 for married, filing jointly. These figures, except for the top bracket, are inflation-adjusted annually. For 2026, these inflation-adjusted brackets range from $109,000 to $205,000 for single tax filers and $218,000 to $410,000 for joint filers.

IRMAA calculations have a two-year lag. Whether you pay an IRMAA in a given year depends on your tax returns from two years ago. That means that your liability for the surcharge next year, in 2027, will be based on your 2025 tax return.

The IRMAA applies to all Medicare and Medicare Advantage beneficiaries whose earnings are high enough to make them eligible. This is a cliff surcharge: just $1 over the limit will trigger surcharges for both Parts B and D. Income planning in the years leading up to Medicare eligibility can help beneficiaries avoid the surcharge.

Here's a look at the IRMAA and what it costs in 2026:

The IRMAA for 2026 

IRMAA is a surcharge that some Medicare enrollees must pay in addition to regular Medicare Part B and Part D premiums. The surcharge is based on your Modified Adjusted Gross Income (MAGI) from two years ago. In other words, your 2026 IRMAA liability is based on your MAGI from 2024.

The SSA determines who pays an IRMAA based on the income reported two years prior. In other words, the SSA looks at your 2024 tax returns to see if you must pay an IRMAA in 2026.

Medicare determines the 2026 IRMAA charge in the 4th quarter of 2025. That is why your IRMAA determination is based on 2024 filing status and income — it's the latest data point the Social Security Administration (SSA) can obtain from the IRS to determine your 2026 IRMAA liability.

You can easily determine your 2026 Part B and Part D total premiums by adding the income-related monthly adjustment amount to the 2026 premium costs. For 2026, the Part B premium is $202.90, and the Part D standalone premium is, on average, $34.50.

The 2026 IRMAA surcharge amounts for Part B range from $81.20 to $487.00. Medicare Part D surcharges range from $14.50 to $91.00.

The income brackets and inflation adjustments. The first four brackets of the IRMAA are indexed for inflation annually. However, the 5th bracket is currently frozen and is eligible to be indexed for inflation beginning in 2028.

The indexing is determined by how much the average CPI-U over the 12 months ending in the most recent August has increased compared to the average CPI-U for the previous 12-month period.

Couples that are liable for the IRMAA will pay a higher surcharge when filing separately. Why? The range of brackets and surcharges for married couples that file separately are narrower:

Types of income that trigger the IRMAA

The modified adjusted gross income (MAGI) used to determine IRMAA is generally calculated by taking your Adjusted Gross Income (AGI) and adding back specific types of income that were excluded from AGI. In simple terms, for most people, the MAGI for IRMAA is the sum of their Adjusted Gross Income (AGI) from their tax return plus any tax-exempt interest income.

Adjusted Gross Income (AGI): This encompasses most sources of taxable income, such as:

• Wages and salaries
• Taxable portion of Social Security benefits
• Distributions from traditional IRAs, 401(k)s, and other tax-deferred retirement accounts (including Roth conversions)
• Interest (taxable) and dividends
• Capital gains
• Pension and annuity income
• Rental and royalty income
• Business income

Tax-exempt interest income. The IRMAA-specific MAGI is primarily your:

Adjusted Gross Income (Form 1040, Line 11) + your tax-exempt interest (Form 1040, Line 2a). That tax-exempt interest includes: municipal bonds, tax-exempt dividends and U.S. Savings Bonds used for qualified higher education expenses, all of which would be added back to your AGI. This is a key "add-back" that often pushes retirees over an IRMAA threshold.

Income planning the best way to avoid the IRMAA

That is a crucial area of retirement planning. The core strategy for avoiding or reducing IRMAA is to lower your Modified Adjusted Gross Income (MAGI) in the relevant year, which is typically two years before the year you pay the premium.

Here are the most robust income planning tactics to manage your MAGI and mitigate IRMAA:

• Optimize your retirement account withdrawals (The "Roth Strategy") — Since withdrawals from traditional IRAs, 401(k)s, and RMDs (Required Minimum Distributions) are generally included in MAGI, while Qualified Roth withdrawals are not, strategic use of Roth accounts is the most powerful tool you have to reduce your MAGI and limit your exposure to the IRMAA.

Here are three other ways to reduce your MAGI:

• Utilize Qualified Charitable Distributions (QCDs) to reduce the impact of RMDs.
• Manage investment income to avoid large capital gains spikes and harvest tax losses.
• Time and structure your income, by accelerating or deferring income, to limit unavoidable IRMAA liability, "take the IRMAA hit" for only one two-year period.

How to pay your IRMAA

Your monthly Medicare Part B and D IRMAA charges are deducted automatically from your Social Security check, with two exceptions: if you have opted to defer your Social Security benefits and do not receive a Social Security check, or if the amount of your Social Security check is not large enough to cover your IRMAA. In that case, you will receive a bill for the unpaid IRMAA balance from the Centers for Medicare & Medicaid Services (CMS).

IRMAA surcharges for Part B and Part D are paid separately. Part B IRMAA is automatically added to your monthly premium bill. The Part D IRMAA must be paid directly to Medicare, not your plan or employer.

It’s your responsibility to pay it even if your employer or a third party (e.g., retirement system) pays your Part D plan premiums. You’ll get a bill each month from Medicare for your Part D IRMAA, and you can pay it the same way you pay your Part B premiums.

You have three ways to pay your Medicare IRMAAs online — you can use your MyMedicare account, your bank’s bill pay service or you can automate the process by using Medicare Easy Pay. I recommend using a MyMedicare account. It is safe, secure, and there is no fee to make a payment. You’ll need to know your Medicare number and your Medicare Part A start date to create your account. You can find both on your Medicare card.

Lastly, you can send your payment by mail to: Medicare Premium Collection Center, PO Box 790355, St. Louis, MO 63179-0355.

Plan to avoid the IRMAA

Be mindful of the risk of a one-time spike in income that could trigger the IRMAA, such as proceeds from a home sale or converting your traditional IRA to a Roth IRA. To avoid this risk, properly time a Roth conversion; you can then avoid the IRMAA when you take tax-free distributions. Learn more about strategies, such as how to lower taxes on required minimum distributions that could otherwise trigger the surcharge.

If your income suddenly dropped due to a major life event or change of circumstances, you do not have to wait two years for the IRMAA to adjust. You can appeal the surcharge with SSA using Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event).

Related Content

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• What is the IRMAA (Income-Related Monthly Adjustment Amount)?
• 7 Ways to Plan Now to Save on Medicare IRMAA Surcharges Later
• 9 Things You Must Know About Medicare's Income-Related Monthly Adjustment Amount (IRMAA) Surcharges
• How to Appeal the IRMAA for Medicare Parts B and D

The White House recently announced a landmark deal with pharmaceutical companies Eli Lilly and Nordisk that will impact Medicare beneficiaries and others in the coming months. The agreement cuts prices for GLP-1 receptor agonists, such as Ozempic and Wegovy, while expanding Medicare coverage for these weight-loss medications. The news is a turnaround from a Trump administration announcement earlier this year blocking Medicare from covering obesity drugs.

With the new deal, Medicare will no longer only cover these drugs for diabetes or heart issues, but for obesity itself, potentially saving beneficiaries hundreds of dollars each month.

Why it matters: In the U.S., over 30% of adults age 65 or older are considered obese — having a body mass index (BMI) of 30.0 or higher — according to America's Health Rankings. The Centers for Disease Control and Prevention (CDC) estimates the prevalence of obesity among all American adults to be 40%.

Before the deal, these injectables cost $1,000 or more per month, making it difficult for many retirees to afford. Trump’s deal promises lower government pricing and copays, which is considered a game-changer for the 65 million people currently on Medicare.

With the new deal, people buying GLP-1 medications directly from the manufacturers (or through a new portal called TrumpRx) will pay an average of $350 per month to start, with the companies having committed to lowering the price to roughly $250 over the next two years.

The price of Ozempic ($1,000 per month) and Wegovy ($1,350 per month) will decrease to $350 per month when purchased through TrumpRx or directly through the manufacturers. The prices of Zepbound and Orforglipron (if approved) will fall from $1,086 per month to an average of $346 per month, per the White House.

If the FDA later approves the oral version of Wegovy, or similar GLP-1 pill-form drugs in each company's portfolio, TrumpRx will price the initial monthly dose at $150.

Medicare beneficiaries will have access to some GLP-1 drugs approved for both obesity and diabetes for a $50 copay. The manufacturers have agreed to cut the price Medicare pays to $245, to help cover the costs of increased coverage of weight-loss drugs.

The agreements also call for Novo Nordisk to commit $10 billion and Eli Lilly to commit $27 billion to boost their U.S. manufacturing, effectively securing a reprieve from potential tariffs.

Trump promoted the deal as "the biggest price cut in history," but the rollout is slow. TrumpRx is expected by December 2025, with full integration by Medicare in mid-2026.

To understand the savings to Medicare and Medicaid recipients, here's a quick comparison:

Additionally, the deal also provides reduced costs on other Eli Lilly and Novo Nordisk medicines.

For example:

• Emgality, a treatment for migraines, will cost $299 per pen, a discount of $443 off of the list price.
• Trulicity, a commonly used diabetes medicine, will cost $389 per month, a discount of $598 off of the list price.
• Widely-used insulin products, including NovoLog and Tresiba, will cost $35 per month in supply.

Key facts:

• Drugs involved: Ozempic and Wegovy, Mounjaro and Zepbound. Down the line, oral versions like Orforglipron may be included.
• Price cuts: Medicare will pay $245 per month, down from list prices of about $1,000 to $1,350. Beneficiaries pay a maximum copay of $50. Direct-to-consumer via TrumpRx or the manufacturers: $350/month now, $250 in two years, with oral starters at $149.
• Expansion of coverage: Obesity and weight loss will be included for the first time under Medicare coverage if tied to comorbidities, such as heart or kidney disease, or severe obesity. This will affect about 10% of Medicare enrollees. Medicaid states it will see the same rates.
• Rollout: TrumpRx by year-end 2025. Medicare mid-2026

What does this mean for Medicare beneficiaries?

For a Medicare beneficiary who is diabetic, obese, and living on a fixed income, the deal could mean the availability of proven GLP-1s without breaking the bank. The deal could also open doors for those with heart or kidney issues, and address obesity's $173 billion annual Medicare tab.

Besides the good news, access hinges on the plan's adoption. Will it become voluntary for Part D? And, copays, although capped, can add up over the long term. Early adopters via TrumpRx will get relief now, but most will wait until summer 2026.

Deal seeks to balance targeted relief and tariffs on big pharma

The United States has less than 5% of the world’s population, yet roughly 75% of all global pharmaceutical profits come from American taxpayers. As it stands now, Trump's GLP-1 deal is attracting both praise and skepticism, as it strikes a balance between imposing tariffs on the pharmaceutical industry and targeted relief to aid Medicare's most vulnerable.

If all goes as planned, the deal would transform access, slash monthly costs for injectables and lift the burden for low-income Medicare retirees. According to David Certner, a former AARP staff member, "This levels the playing field for seniors who've been priced out."

Will you benefit? Check eligibility at medicare.gov or trumpRx.gov.

Related content

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• Dental Cost Advice for New Retirees, From a New Retiree
• Seven Medicare Changes Coming in 2026
• Brace for Higher Health Costs in 2026: A Look at Projected Medicare Premiums
• Prior Authorization Coming to Traditional Medicare Starting in 2026

When you enroll in a 2026 health insurance plan this fall, don’t be surprised if you see a significant increase in your premium, whether you get coverage from your employer or on the Affordable Care Act marketplace.

Large employers expect health care costs for employee coverage to rise by a median 9% in 2026, according to the Business Group on Health. “This is the highest single-year forecast in more than a decade,” says Ellen Kelsay, BGH president and CEO.

Employers plan to pass along more of the increase to employees than they have in the past few years, and some are offering new kinds of plans with restricted provider networks as another way to manage their expenses.

The sticker shock will be even more intense for people who buy insurance on the ACA marketplace. When health insurance companies filed their proposed rates for 2026 with regulators over the summer, the median premium increase from 2025 was 18% — the largest rate change insurers have requested since 2018, according to an analysis by KFF, a health care research organization.

And that’s just part of the picture for marketplace plans. If you’ve qualified for a premium subsidy to reduce costs based on your income in recent years, that may change: The enhanced premium tax credits that enlarged the subsidies starting in 2021 are set to expire at the end of 2025, unless Congress makes a last-minute change.

If they are not extended, the subsidies will shrink for people earning less than 400% of the federal poverty level; for 2026 plans, 400% of the poverty level is $62,600 for singles and $84,600 for couples in most states. People earning more than that won’t receive a subsidy.

Despite these developments, you still have solid strategies at your disposal to make smart health care decisions and manage the costs during open enrollment. Here’s what to expect when assessing your plan options this fall.

New employer-plan options

The BGH study’s 9% projected increase in health care costs is driven primarily by the rising price of pharmaceuticals, the growing popularity of obesity treatments (especially GLP-1 medications, such as Ozempic), an increase in cancer diagnoses, and higher usage of mental health services, which many employers have expanded in the past few years.

The employers who responded to the survey expect to moderate the increase to a median of 7.6% by tweaking the design of their health plans, including some changes that affect employees’ options and costs. The plans may limit or reduce coverage for GLP-1 medications and require prior authorization for more procedures and services before they provide coverage.

Employers may also pass along a larger share of the cost increase to employees than they have over the past few years, through higher premiums, deductibles and co-payments. The median estimate of employee contributions to annual premiums is rising from $2,983 to $3,251 per employee in 2026 (including both single and family coverage), and the median yearly out-of-pocket cost for employees is increasing from $1,825 to $2,224, according to the BGH study.

But a growing number of employers are also looking for alternatives to increasing deductibles, recognizing that high deductibles can cause people to avoid seeking care, leading to more expensive medical issues in the future.

More than one-third of the plans surveyed by Mercer, a human resources and employee benefits consulting firm, expect to offer a medical plan with no deductible or a low deductible, and 12% expect to offer at least one plan with no premiums for employees.

Some employers hope to reduce costs by offering plans with incentives for employees to use certain providers that offer high-quality and cost-efficient services. So you may see plans with new types of provider networks on the menu.

For example, if your plan includes a “high-performance network,” you may have lower deductibles and co-payments when you use certain providers than you do when you visit the rest of the providers in your plan’s standard network. A high-performance network is “generally like a PPO, but it’s a more curated network,” says Tracy Watts, senior partner at Mercer.

With these plans, you may be able to use out-of-network providers, but with higher costs for you, as is typical with a PPO (preferred provider organization). Another version of these high-performance network plans, called EPO (exclusive provider organization) plans, restricts coverage to in-network providers only.

As another option, some employers are offering “variable co-pay plans” that have no deductible and provide a range of co-payments that vary by provider, which the employees see up front. “The idea is you’re getting somebody to do their homework before they call the doctor,” says Watts.

You may also be able to use centers of excellence, which are hospitals that may be outside your area but specialize in certain conditions. More than half the companies surveyed by BGH plan to include centers of excellence in their networks in 2026 for bariatric surgery, musculoskeletal conditions, fertility treatments, or cancer. Centers of excellence are more commonly included in large-employer plans than those from smaller employers.

Employers and their health plans have also been beefing up navigator programs. Health care navigators can help you learn about your care options if you’re diagnosed with a medical condition and find in-network providers in your area. Navigators may let you know whether your plan offers a center of excellence for your condition or whether you may be eligible to participate in a clinical trial, says Watts. They can provide information about other programs the employer offers, too, such as employee assistance programs, which provide a growing number of in-person and online counseling options and other benefits.

Strategies for workers

Because of the increasing costs and changes to employer health insurance, it’s worth making an extra effort to review all your choices during open enrollment this year. The following steps can help.

Make the most of each spouse’s benefits. If both you and your spouse have coverage at work, compare the options. “Don’t assume that if you work for a bigger company, your family should all go on your plan,” says Watts. It may make sense to stay on your own company’s plan, but have your children on your spouse’s plan. Or you could get medical coverage through your plan, but dental and vision coverage through your spouse’s employer.

Do the math. Add up premiums plus the costs for the care and prescription drugs you and your family need regularly under the plans offered by your employers. Also check coverage if you were to get a serious diagnosis, such as cancer or a condition that requires major surgery, so you’ll understand how your medical care may be covered under each plan, says Watts. If you choose a high-deductible health insurance policy paired with a health savings account and the employer contributes money to the HSA on your behalf, subtract that amount from the potential costs.

Contribute to an HSA if you do choose a high-deductible policy. Many employers seed HSAs for employees with eligible health plans or match their contributions. To qualify for an HSA in 2026, your policy must have a deductible of at least $1,700 for single coverage or $3,400 for family coverage. You’ll be able to contribute up to $4,400 in 2026 if you have self-only coverage or $8,750 for family coverage, plus an extra $1,000 if you’re 55 or older.

Learn about new network options, which may be a way to reduce your costs. If you don’t have a strong relationship with any doctors, or if your current doctors happen to be in the network, making use of a plan that offers a preferred network could help you save money on premiums without paying a high deductible, says Watts. Find out whether the plan will cover out-of-network providers with higher cost-sharing or if it will cover only in-network providers.

Check how the plans will cover your medications, especially if you need expensive maintenance drugs. Some plans are altering their formularies, which specify whether a drug is covered and what your co-pay would be, says Watts. Even if the plan includes your drug, you may need to meet prior-authorization requirements before the insurer will cover it for you. Don’t assume your drugs will continue to be covered the way they had been in the past.

Take advantage of extra benefits. For example, employers are making their wellness programs more attractive to many employees. Employers may give you a few hundred dollars each quarter for a gym membership, for example, rather than require you to complete a complicated health assessment. Employers may also offer more mental health benefits and other programs, both in-person and remotely, such as virtual physical therapy.

Choosing a marketplace plan

If you buy insurance on the Affordable Care Act marketplace — either at HealthCare.gov or your state’s marketplace — you may see a particularly large jump in costs. The increase in premiums might not be quite as high as 18% by the time rates are finalized.

“But this gives us a really good signal of what insurers are thinking of the current state of the individual market and how health costs will change,” says Matt McGough, policy analyst in KFF’s program on the Affordable Care Act.

Final rates are available on HealthCare.gov starting the week before open enrollment begins, on November 1. Open enrollment for 2026 plans ends on January 15. (The time frame for open enrollment will be shorter, starting with 2027 plans.) Some states have different time frames.

The increases are due in part to rising health care costs, but they’re also fueled by uncertainty about what will happen to the enhanced premium tax credits.

"Last year, we saw record insurer participation,” says McGough. "Consumers had more choice than ever when it came to selecting a plan on the marketplace. But partially due to the uncertainty, a lot of insurers are pulling out because it might not be as profitable anymore."

Some insurers are worried that if the enhanced subsidies expire, some healthier people will choose not to get a marketplace plan, which could leave the pool of insured individuals sicker and more expensive for insurers to cover.

"Insurers are going to try to protect themselves from what might be a sicker group of people,” says Sara Collins, senior scholar for health care coverage and access with the Commonwealth Fund, a health care research organization. If the insured people are less healthy overall, the costs go up for everyone — even those who are free of medical conditions.

Aetna, which had sold marketplace plans in 17 states, is leaving the ACA marketplace in 2026. Two large plans in Colorado announced in late August that they would exit the individual market. But regardless of whether the insurer that provides your current plan is sticking with the marketplace, it’s a good idea to shop around.

Your options will be based on where you live and whether you qualify for a premium subsidy. It’s important to look not only at the plan’s sticker price but also at your after-subsidy premiums and potential out-of-pocket costs.

"The amount you pay depends on your income and the plan you choose,” says Cheryl Fish-Parcham, director of private coverage at Families USA, a consumer health care advocacy organization.

“Don’t assume that what another person pays is what you’re going to pay," said Fish-Parcham. Look at the plan choices, and make sure you’ve updated your income figures when shopping for a marketplace plan.”

To help estimate your premiums and possible subsidies, you can use the calculator at kff.org/interactive/subsidy-calculator. (KFF plans to update the tool for 2026 plans before open enrollment starts.)

Plans on the exchange are separated into bronze, silver, gold and platinum categories. Bronze policies generally offer the highest deductibles and lowest premiums; platinum policies provide the most robust coverage in exchange for higher premiums; and silver and gold policies fall in the middle.

Platinum plans aren’t available in most states, so you’ll likely be choosing among the other options. If you have a silver or gold plan now, you may be able to reduce your premiums by switching to a bronze-level plan — but be prepared to pay more for the deductible and cost-sharing. Make sure you understand the types of care that aren’t subject to the deductible, such as a lot of preventive care.

One important benefit to buying an ACA marketplace policy rather than going without insurance: All marketplace plans cap your maximum out-of-pocket costs for the year. In 2026, the cap will be $10,600 for individual plans and $21,200 for family plans. That limit protects you against the risk of incurring massive bills should you end up needing expensive health care.

A helpful development from the One Big Beautiful Bill Act (OBBBA), which the president signed into law in July, is that all bronze-level plans will be eligible for health savings accounts starting in the 2026 plan year.

Make the most of an HSA to build up tax-free savings, which can help you pay out-of-pocket health care costs now or in the future. Contributing to an HSA also reduces your modified adjusted gross income, which could help you qualify for a premium subsidy.

If your income is less than 250% of the federal poverty level (which will be $39,125 for singles and $52,875 for couples for 2026 plans), you can also qualify for a special subsidy that reduces your deductible and co-payments if you buy a silver-level plan, which could be a better deal for you than a bronze plan.

Understand how the network works. Is it a PPO that lets you use both in-network doctors and out-of-network doctors, but with higher co-pays, or is it an HMO that covers only in-network doctors? Find out whether your providers will continue to be in-network. Also, check the plan’s formulary to see how it will cover your medications.

Fish-Parcham recommends getting assistance from a helper or navigator in your area; you can find one through HealthCare.gov or your state marketplace. The federal government has cut back on funding to support these helpers. In case they’re stretched thin, it’s best to get started early so you have time to work with them.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Open enrollment season is here, bringing with it the annual rush of decisions about health insurance and related benefits. For many, one option often rises above the rest: the Health Savings Account (HSA).

Why? Because of the HSAs’ so-called “triple tax advantage.” That includes pre-tax contributions, tax-free investment growth, and tax-free withdrawals for qualified medical expenses.

With such potentially significant tax advantages, opting in to an HSA might seem like an easy choice.

However, some situations may make an HSA less than ideal for you or your family, despite its tax benefits.​ Curious? Here’s more of what you need to know.

How do Health Savings Accounts work?

An HSA is a special savings account that allows you to pay for qualified medical expenses with pre-tax dollars. You can only open a health savings account if you’re enrolled in a high-deductible health plan (HDHP) — meaning you’ll pay more out of pocket before insurance kicks in.

You (and sometimes your employer) can deposit money into the account, and that money can be used tax-free for expenses like doctor visits, prescriptions, or even dental and vision care.

The balance rolls over from year to year, and you keep the account even if you change jobs or retire.

As mentioned, a main appeal is the triple tax advantage:

• HSA contributions are tax-deductible
• Growth is tax-free, and
• Withdrawals for eligible expenses are also not taxed.

However, while HSAs can be a powerful way to save on healthcare costs, they may not be the best fit for every health plan or budget. Here are some key reasons why.

‘Hidden costs’ of High-Deductible Health Plans

To qualify for an HSA, you have to have a high-deductible health plan (HDHP). That means trading lower monthly premiums for higher out-of-pocket costs. (Because HSAs pair with HDHPs, you’ll pay more out of pocket before insurance starts covering expenses.)

• If you don’t have enough saved yet, those upfront costs can be tough to manage.
• The high-deductible, higher-risk paradigm means you’ll need to cover more upfront costs before insurance kicks in, which can strain your cash flow if medical needs arise.
• You might not see enough savings to offset the higher deductible.

That structure can be challenging for people with chronic conditions, ongoing prescriptions, or families with ongoing medical needs, or those who expect high medical costs early in the year.

Studies from the National Bureau of Economic Research (NBER) note that while HSAs incentivize consumer-driven health spending, they also disproportionately affect chronically ill patients and lower-income individuals.

The Kaiser Family Foundation reports that "premiums for HSA-qualified health plans may be lower than for traditional insurance, but these plans shift more of the financial risk to individuals and families through higher deductibles."

Conversely, if you rarely have medical expenses, the potential deductions may not outweigh the higher deductible or plan limits.

And from a tax perspective, if you find yourself pulling from your HSA for regular health bills, you miss out on tax-free investment growth. As mentioned, for many, the compounding aspect is a large part of the HSA’s appeal.​

Frequent HSA withdrawals undercut long-term growth

Some people understandably end up using their HSA dollars every year just to cover doctor visits or medications. But each withdrawal means less money stays invested, which not only reduces future tax-free growth but can also undermine the “retirement account” aspect HSAs aspire to offer.

If you’re in that boat, the account can sometimes feel like more of a glorified checking account than a tax-optimized investment vehicle.​

Limited HSA contributions mean limited tax benefits

Much of the power of an HSA is realized when you can contribute a meaningful amount each year and, ideally, leave those funds invested for a significant period.

Note: The IRS sets annual contribution limits for these accounts.

Here are the 2025 and 2026 contribution limits for individuals and families, including the catch-up amount for those aged 55 and older:

HSA Contribution Limits

These limits apply to the total contributions from both individuals and employers combined. The catch-up contribution allows individuals 55 or older (not yet enrolled in Medicare) to contribute an additional $1,000 each year.

Still, if you can’t afford to contribute much because of, for example, tight household finances, other priorities, like debt repayment or just the higher out-of-pocket costs that come with a high-deductible health plan, can also effectively shrink the tax benefits of an HSA.

• That is because HSAs essentially reward those who can maximize contributions.
• The tax deduction for putting money in is only substantial if you’re actually making full or near-full contributions.

Higher earners, or those with substantial disposable income, can often reap significant tax benefits, while others may see less substantial tax breaks.

Other factors can undermine the “triple tax” HSA promise

Account fees and investment limits: Some providers require keeping a minimum cash balance or charge fees that can erode some of your gains, particularly if your HSA balance is low.​

As Kiplinger has reported, former Consumer Financial Protection Bureau (CFPB) director Rohit Chopra has said, "HSAs may appear beneficial due to tax advantages, but many consumers underestimate the hidden costs, including account fees, complexity, and the challenge of high deductibles that can hinder access to care."

Medicare eligibility and job changes: Even though the HSA remains yours even if you switch jobs, turning 65 or switching to a non-HDHP (including many employer plans) means you can’t make new HSA contributions to that account. That could hinder your future potential for tax-advantaged savings.​

Recordkeeping demands and early withdrawal penalties: Managing an HSA requires careful recordkeeping to document eligible medical expenses. Additionally, if funds are withdrawn for non-qualified purposes before age 65, the amount is taxed as ordinary income and subject to a 20% penalty. For those who may need easier access to their savings, this lack of flexibility can limit the practicality of the account’s “triple tax” advantage.

Preference for predictable costs. Some people would rather pay higher premiums each month in exchange for lower, more predictable costs when they need care. An HSA plan can feel risky if you want that stability.

Employer coverage advantages with other plan options. If your job offers another plan with low copays and strong employer coverage, that option might save you more overall than an HSA-linked plan.

Downsides of an HSA: Bottom line

An HSA can be a powerful tool, especially for those who can consistently contribute and let their savings compound over many years while covering high upfront medical costs out of pocket.

If that doesn’t fit your financial life or if frequent withdrawals, high expenses, or modest contributions are part of your reality, the tax perks of an HSA might seem minimal.

As open enrollment continues, it’s worth running the numbers on whether you’ll reap the tax benefits of an HSA will or if you’re better off (even if only temporarily) focusing on another health plan option.

Read More

• HSA Contribution Limits Are Set for 2026
• What's the Standard Deduction for 2025 and 2026?
• Three Hidden Costs of Health Savings Accounts

I recently received a shock when I went to the dentist for my six-month checkup. Not because I had a mouthful of cavities or needed another root canal. (I floss!) The unpleasant surprise occurred when it came time to pay the bill. This was my first appointment since I retired and lost my employer-provided health insurance, and I was on the hook for the entire cost.

As I mentioned in an earlier column, I opted for original Medicare and a Medigap plan when I retired. I made this decision because with a Medicare Advantage plan, I would have been limited to using in-network doctors and other providers. Likewise, while many Medicare Advantage plans include dental care, the coverage is usually restricted to providers in their network.

In addition, Medicare Advantage plans often impose waiting periods of six months to two years before they pay for expensive procedures, such as crowns and dentures. Preventive care is usually covered immediately, but you'll typically face an annual cap on coverage — an average of $1,300, according to a 2021 survey by health-policy research organization KFF.

In my case, signing up for Medicare Advantage would have required me to switch to an in-network dentist to get coverage, something I'm reluctant to do because I've been a patient of the same practice for more than 20 years. I'm pretty sure I'm putting my dentist's children through college, but I still have most of my teeth, so I consider that a fair trade-off. (Due to bad youthful habits and some congenital issues, there are more bridges and canals in my mouth than there are in Venice).

Ways retirees can lower dental costs

For retirees like me, there are other ways to lower dental costs, although all of them have limitations. One option is a stand-alone dental insurance plan, which many major providers offer. Premiums range from $20 to $80 a month, depending on the services covered and annual caps.

But before you sign up for one of these plans, scrutinize the fine print. Most plans will cover only a portion of the cost of certain procedures, such as fillings and root canals, and limit annual payouts; in some cases, the cap is as low as $1,000. Some have waiting periods of 12 months or more before they'll cover some procedures.

And to use the coverage, you'll probably have to visit a dentist within the plan's network. When I plugged my zip code into the search engine for a well-known dental insurance plan, I discovered that there weren't any participating dentists within 30 miles of my home.

A discount plan is another possibility. These plans aren't insurance — they simply offer members a discount ranging from about 15% to 50%, depending on the dentist and procedure. If your dentist participates in one of these programs, or you don't mind switching to one who does, this could save you some money. I was offered access to a discount plan through my Medigap policy at no cost.

In other cases, participants may pay a membership fee. (You'll have to estimate whether your savings from the discount will surpass the fee.) For example, a dental practice in my neighborhood offers discounts of 20% to 30% for a one-time membership fee of $199.

Unfortunately, my dentist doesn't participate in one of these programs, either, so I'm planning to use money I accumulated in my health savings account to pay for my dental work. Although you can't contribute to an HSA after you enroll in Medicare, you can use the funds tax-free to pay for a variety of health-related out-of-pocket costs.

I'm also going to talk to my dentist about other ways to save money, such as spreading out X-rays and fluoride treatments. And I'll continue to floss. Now that I'm paying the entire tab, it's more important than ever.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Medicare provides health insurance to 69 million Americans. During Medicare open enrollment, which runs from October 15 to December 7 this year, people can enroll in the program or change plans.

You can also switch from original Medicare to a Medicare Advantage plan (or vice versa), and weigh your Part D prescription drug plan coverage against other options.

If you choose original Medicare (Part A and Part B), you can also buy a Medicare Supplement Insurance (Medigap) policy from a private insurance company to cover services and out-of-pocket costs not covered by original Medicare.

It's important to note that you can only buy Medigap if you have original Medicare. That means you must sign up for Medicare Part A and Part B before you can buy a Medigap policy.

Medigap Open Enrollment

According to Medicare, you have a six-month Medigap Open Enrollment period, which starts the first month you have Medicare Part B (medical insurance). During these six months, you can enroll in any Medigap policy, and you can’t be denied coverage for any pre-existing health problems.

After six months, you might not be able to buy a Medigap policy, and if you can, it could cost more. The Medigap Open Enrollment period only happens once and doesn’t repeat yearly such as Medicare Open Enrollment.

Stay tuned for live updates: Medicare Open Enrollment 2026 Live Updates: We'll Be Back on December 1 for the Final Week of Open Enrollment

What is Medigap?

Most states offer 10 different Medigap plans sold by private insurance companies. They're named A-D, F, G, and K-N, and the price is the only difference between the plans.

Medigap Plan G provides the most comprehensive coverage and continues to be the most popular plan in 2025, accounting for approximately 39% of all policyholders, according to KFF. Plan F came in second (36%).

You might also be able to buy another type of Medigap policy called Medicare SELECT, which is only available in some states. If you choose a SELECT policy, you have the right to change your mind and switch to a standard Medigap policy within 12 months.

If you live in Massachusetts, Minnesota and Wisconsin, Medigap policies are standardized differently. Medigap must follow federal and state laws meant to protect you, but illegal practices by insurance companies can happen, so do your research when shopping for a Medigap policy.

What does Medigap cover?

Medigap policies help cover out-of-pocket costs, such as co-insurance, copayments and deductibles associated with original Medicare — nationwide. Some Medigap policies might also cover foreign travel emergency care, which gives you an extra layer of well-being when you travel outside the U.S.

Note: Although plans E, H, I and J are no longer sold, they still cover foreign travel emergency care if you're enrolled in one of these plans. If you want prescription drug coverage, you can enroll in a separate Medicare drug plan (Part D).

What does Medigap not cover?

Although Medigap plans cover all or part of original Medicare’s additional fees, it doesn’t cover everything, such as long-term care, elective surgeries, hearing aids, eyeglasses, vision and dental care and private-duty nursing.

Not all plans cover Part B deductibles. It's also worth noting that Medigap plans sold after 2005 don’t include prescription drug coverage.

Pros and cons of Medigap insurance

Medigap covers items and services not covered by original Medicare and significantly extends hospital, skilled nursing and travel coverage. But there are a few disadvantages worth looking at before you sign up.

Medigap and Medicare have different Open Enrollment windows and policies

The initial enrollment period for Medicare is a seven-month window, which starts three months before your 65th birthday, the month you turn 65 and the three-month period after your birth month.

If you fail to enroll for Original Medicare during the initial enrollment period, you’ll get another chance during Medicare Open Enrollment, which happens from October 15 through December 7, 2025.

You have a six-month Medigap Open Enrollment period, which starts the first month you have Medicare Part B (medical insurance). During these six months, you can enroll in any Medigap policy, but after the six-month period, you might not be able to buy a Medigap policy, or it might cost more if you do.

The Medigap Open Enrollment period only happens once and doesn’t repeat every year such as Medicare Open Enrollment. Time is of the essence.

Still working? You can sign up for Medicare even if you’re still on your employer’s health plan.

Read: Seven Medicare Changes Coming in 2026.

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Open enrollment is an important time for employees to review and select benefits and those decisions can have a lasting impact on your financial future.

According to the U.S. Bureau of Labor Statistics, the average employee benefits package accounts for 29.7% of total compensation for private industry workers and 38.4% of total compensation for state and local government workers.

But when the average employee has to choose from more than a dozen benefits, it is easy to become fatigued while working through the open enrollment process. The steps that follow will help keep you on track.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

1. Review your current benefits

Start by evaluating your existing benefits. Consider what worked well in the past year and what didn't.

Look at your health care usage, out-of-pocket costs and any changes in your circumstances — such as marriage, the birth of a child or new health needs — that may influence your choices. Try to judge how much the upcoming year's expenses may look like this year's.

A tool that may help is "start, stop, continue." Try to decide what benefits were missing this year that you would like to start in the new year, what benefits were not used that you might stop and what benefits were helpful that you want to continue.

This exercise can help you group your benefits by category.

2. Attend informational sessions and read materials

Keep an eye out for emails and other communications that offer enrollment support. Your employer offers these resources because they want you to get the most out of your benefits.

Use your human resource team to help you manage your decision-making. Consider talking to HR with your partner, if applicable, to help your family get the most out of your benefits.

3. Compare plans carefully

When selecting, compare plan premiums, deductibles, copayments, coverage networks and prescription drug benefits. Use available online tools or calculators to estimate your annual costs based on anticipated health-care needs.

Try not to get overwhelmed. Start by thinking about how well this year's plan served you and your family. The complexity of plan comparisons makes relying on your HR team especially important.

Start by telling them what you liked and did not like about this year's plan.

4. Consider flexible spending and health savings accounts

Flexible spending accounts (FSAs) and health savings accounts (HSAs) offer tax advantages for medical and dependent care expenses. Review contribution limits and eligible expenses for each account and decide how much you should set aside for the coming year.

Remember that FSAs typically have a "use it or lose it" rule, so plan your contributions carefully.

And don't let the acronyms confuse you. Perhaps think of your FSA as your "fast" account that generally has to be spent in the year it is funded and think of your HSA as your potential "hold" account which can be saved, if not needed, year-over-year and even invested subject to certain conditions.

5. Evaluate supplemental benefits

Beyond core health insurance, many employers provide added benefits such as life insurance, disability coverage, legal assistance, and wellness programs. Assess your need for these supplemental benefits and consider increasing coverage to suit your needs.

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Benefits you have to pay for are a bit like subscriptions for services, such as streaming. Individually they may not seem expensive, but when combined they can be expensive.

6. Plan for retirement

Open enrollment is a great time to review your retirement savings strategy. Check your contribution rates to your workplace savings plan if you have one.

A best practice to consider is to at least contribute enough to get the maximum company match. Another is to increase your contributions steadily to at least 10%.

Other questions to consider include whether to use a pre-tax contribution or a Roth contribution, if offered.

The former allows money to be contributed pretax and comes out as taxable income when withdrawn, while the Roth is made up of after-tax contributions and comes out as tax-free when withdrawn, subject to certain conditions.

Although company contributions will most likely be taxable when withdrawn, having tax-free Roth dollars in retirement may still be beneficial.

7. Understand deadlines and take action

Be aware of open enrollment start and end dates, and submit your selections before the deadline. Late submissions may result in missed coverage or defaulting to less optimal plans.

Because benefits decisions may impact your take home pay it is best to complete the forms with your partner. Completing the process early and sleeping on your decisions before final submission is another good idea.

8. Seek advice if needed

If you're unsure about which options are best for you and your family, consider consulting with benefits specialists or financial advisors. They can help you understand complex plan terms and make choices that align with your goals.

This is particularly true if you have special circumstances, such as a family member with a chronic condition.

A final note on AI

Open enrollment season is your annual opportunity to tailor your benefits to meet your evolving needs. By reviewing your current coverage, attending informational sessions, comparing options and acting early, you can ensure you're maximizing the value of your employee benefits.

You could also try using AI for guidance, whether by uploading plan documents to a chatbot and asking it to summarize them, or simply by asking it questions. AI isn't foolproof, however, so be sure to verify any information you've been given with your HR team.

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The Centers for Medicare and Medicaid Services (CMS) is taking measures to safeguard a critical season for American health care, announcing the temporary return of approximately 3,000 workers who are expected to manage the ongoing Medicare Open Enrollment and upcoming Affordable Care Act (ACA) Marketplace Open Enrollment periods. This recall, necessitated by the ongoing government shutdown, underscores the essential nature of these employees' duties and the impact staff shortages can have on federal health programs and their beneficiaries.

Last week, some employees of the Bureau of Labor Statistics were recalled to complete the September CPI report. This report contained data that was essential to computing the 2026 Social Security COLA. That report was released on October 24, nine days after its scheduled release date of October 15.

Addressing the operational issues

The decision to bring back the furloughed workers comes at a crucial juncture. The Medicare Open Enrollment period that runs from October 15 – December 7 is already underway, and the ACA Marketplace Open Enrollment will begin soon on November 1 and run until January 15. Together, these periods represent a vital window during which millions of Americans enroll or change their health coverage for the coming year. Losing thousands of workers during this period could undermine beneficiaries' ability to find and enroll in the best health care plan for their needs and budget.

A CMS spokesperson told the Federal News Network that the recall was necessary "to best serve the American people amid the Medicare and Marketplace open enrollment seasons."

The recall highlights the vast responsibilities of CMS, which provides health coverage for over 160 million Americans through its programs: Medicare, Medicaid, and the ACA Marketplaces. Without sufficient staffing, even mandatory federal programs, which are largely protected from a shutdown, such as Medicare, can face administrative issues and staffing shortfalls that directly impact beneficiaries.

Funding the furlough fix

An interesting aspect of the recall is the funding mechanism used to pay the employees. To avoid violating government shutdown rules, CMS announced that the returning employees will be paid through user fees collected from sharing data with researchers, a funding stream separate from the lapsed congressional appropriations, according to Reuters.

While this solution ensures staff are paid and operations can continue for the time being, it is temporary, and the duration of the recall remains unknown.

With the cost of next year's health plans still unknown for many, the increased staffing at the CMS provides some assurance that the enrollment process itself will not be interrupted or impeded by the current political stalemate.

The CMS staff recall shows that the agency’s mission is critical — and the deadlines too immovable — to be subject to ordinary shutdown procedures. It is an information lifeline extended to the millions of Americans who depend on a functioning enrollment system to secure their health coverage.

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• 11 Costly Medicare Mistakes You Should Avoid Making
• Seven Medicare Changes Coming in 2026
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Question: I want to retire, but I have to keep working so my adult kids have insurance. What are my options?

Answer: You may reach a point when you’re ready to retire and embrace that next phase of life. And if you’re confident in the amount of savings you have, there shouldn’t be much stopping you.

But what if you have adult kids who rely on you for health insurance?

It's a common scenario. The Kaiser Family Foundation found that as of October 2024, 72% of young adults aged 18 to 25 were covered as dependents on a family member's health insurance plan.

Meanwhile, in 2020, the U.S. Census Bureau reported that Americans ages 19 to 34 had the highest uninsured rate of any age group in the U.S. Moreover, 26-year-olds specifically had the highest uninsured rate in the nation.

There’s a very easy explanation for that. The Affordable Care Act allows children to remain on their parents’ health plans until age 26. And while some states allow children to stay on a parent’s health plan until age 30, depending on circumstances, that’s not guaranteed to be an option.

If you have young adult children under 26 who are on your current health insurance plan, you may feel compelled to delay your retirement so they can keep that coverage a bit longer. But that’s not necessarily fair to you. It’s important to strike a balance between helping your kids retain insurance coverage and pursuing your own dreams after a lifetime of hard work.

A potentially slippery slope

It’s noble to want to provide health coverage for your young adult kids. But Adam Spiegelman, CFP and Wealth Advisor at Spiegelman Wealth Management, says there’s a danger in doing so. What starts out as working longer to set your grown kids up with health insurance could evolve into many years of extending financial support rather than focusing on your own needs and encouraging your children to become more financially independent.

In situations like these, he says, “Support tends to expand and never really end – phones, tuition, weddings, even mortgages.”

In Spiegelman’s experience, what starts out as financial support for grown children who are new to the workforce often evolves into supporting children well into their 40s or 50s.

“That may not be healthy for anyone,” he insists.

A recent Savings.com report finds that half of parents with adult children provide regular financial support. The average amount of support given? A whopping $1,474 per month.

This isn’t to say that working a couple of extra years to allow your grown children to stay on your health insurance plan will result in having to support them for decades. But before pushing yourself to plug away at a job for longer than you’re interested in, Spiegelman suggests hitting pause so you can thoroughly evaluate your goals.

“Are you continuing to work purely to provide health insurance, or does staying employed serve other purposes for your retirement readiness or family dynamic?” Spiegelman says.

If there’s a benefit to you in extending your career, like boosting savings or being able to delay Social Security benefits, then that may be a reason to do it. Otherwise, Spiegelman says, “First, plan your own retirement. Maybe even be a little ‘selfish’ there.”

Other paths toward health coverage

Another reason not to automatically delay your retirement for the express purpose of hooking your grown kids up with health insurance? There may be another path toward coverage.

“For many 20-somethings, lower-cost HMOs can be very affordable and sometimes better than staying on a parent plan,” Spiegelman explains.

Depending on their income, your children may qualify for an ACA plan subsidy, making it more manageable. (Note, however, that Congress is divided over whether these subsidies should be extended in 2026, which could more than double ACA premiums.) Or even without a subsidy, they may find that they can swing the cost of a bronze plan, which is the lowest tier available for ACA plans.

Bronze plans typically come with low premiums but higher out-of-pocket costs. They can be suitable for young, healthy enrollees who expect to use their insurance minimally and mostly need protection from catastrophic or emergency care.

Medicaid may also be an option, depending on your children’s income.

Michael LaCivita, CFP at Domain Money, says that if your grown children don’t qualify for Medicaid and can’t afford health insurance premiums on their own, there’s another way to help.

“You may not have to change your retirement date to help your kids with healthcare coverage,” he says. “If your budget allows it, one option is to give your child the premium you pay as an employee to keep them on the health insurance plan. Your children can use this toward their individual coverage. It may not cover all of the premium your child or children may pay to have their own health insurance policy, but it helps.”

It’s okay to put your own needs first

Even if you can’t afford to help your grown kids cover the cost of health insurance, if you’re ready to retire and have saved well to reach that point, then it’s not fair to you to delay your own plans. In fact, being kicked off of your health plan could be the push your children need to find jobs that provide employer-subsidized insurance, or rethink their spending in a manner that makes an ACA plan more affordable.

This isn’t to say that you shouldn’t do it nicely. Aim to give your kids a few months of notice so they can start crunching numbers and preparing.

But as Spiegelman says, “Protect your own mental health, lifestyle, and retirement goals first — because time is finite.”

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For the first time in nearly seven years, the federal government shut down on October 1, 2025.

Government shutdowns aren’t new to Washington. Since the late 1970s, there have been 20 funding gaps. Some lasted only a few hours, while others have lasted several weeks. Initially, the longest was during President Donald Trump’s first term, when a border wall funding standoff lasted 35 days. But the 2025 shutdown moved into the spot for the longest in U.S. history.

The standoff behind the scenes notably centered on taxes and health care.

Specifically, Congress has been battling over the extension of premium tax credits that help millions afford health insurance. (Reversing billions in Medicaid cuts that Trump and the GOP pushed through in their 2025 tax and spending bill are also at issue.)

So, the sheer scale of this year’s tax and health care concerns — potentially impacting nearly one in 14 Americans — adds an unusual twist to the recent shutdown. Here’s more to know.

ACA Premium Tax Credits in the health care debate

At the heart of the 2025 government shutdown impasse was a widely used tax credit that subsidizes premiums for Affordable Care Act (ACA) marketplace insurance.

• Congress originally expanded these premium tax credits during the pandemic in 2021 and later extended them through the end of 2025.
• They substantially lower health insurance costs for more than 24 million people in the U.S., or roughly 7% of the population.
• Data show the tax credits have helped make coverage more affordable for a range of people, including the self-employed, small business owners, and those who lack access to employer or other coverage.

Congressional Democrats made it clear they would not approve a temporary spending bill unless Republicans also agreed to extend these enhanced credits and reverse scheduled Medicaid cuts.

At the time, Minority Leader of the U.S. House of Representatives Hakeem Jeffries (D-N.Y.) told reporters the following regarding rising health care premiums and the shutdown stalemate.

“In just days, tens of millions of Americans will see their health care costs rise sharply because of the failure to extend Affordable Care Act tax credits. It’s happening at a time when the cost of living is already too high.”

While some Republicans have acknowledged the popularity of the tax credits, many rejected the notion of tying any extension of them and/or any rollback of Medicaid cuts to a stopgap funding deal.

Vice President JD Vance said in a Fox News interview, “I will go to the Capitol right now to discuss premium support for the Affordable Care Act with Chuck Schumer and Senate Democrats, but only after they have reopened the government.”

In a surprising move, Rep. Marjorie Taylor Greene (R-Ga.), a staunch supporter of the Trump party line on most political issues, noted that her own adult children's insurance premiums would double, along with those of many families in her district, but still described health insurance as "a scam."

Medicaid cuts are also part of the shutdown battle

As Kiplinger has reported, scheduled Medicaid cuts ushered in by the GOP megabill signed into law by Trump on July 4, 2025, risk curtailing coverage and access for millions of low-income families, increasing the uninsured rate, and shifting costs onto hospitals and local governments. Many rural hospitals could be forced to close.

Many Democrats insist that both protections — the ACA credits and broader Medicaid funding — remain in place.

The GOP megabill, nicknamed the “big, beautiful bill,” includes a cut of approximately 15% to Medicaid spending, totaling nearly $1 trillion over the next ten years. According to the nonpartisan Congressional Budget Office (CBO), these cuts could result in approximately 7.8 million people losing Medicaid coverage by 2034.

Health care for undocumented immigrants?

The President and some Republican lawmakers have claimed that Democrats want to provide health care to illegal immigrants.

It’s important to note that individuals in the U.S. illegally aren’t eligible for insurance coverage provided through the Medicare program or the ACA exchange.

Current policy only allows Medicaid and ACA subsidies for U.S. citizens, lawful permanent residents (green card holders), and certain immigrants with lawful presence status.

Note: Hospitals receive Medicaid reimbursements for emergency services they provide to undocumented immigrants; however, this expenditure is a small fraction of their overall spending and does not constitute “free healthcare” coverage.

Health insurance: What happens if ACA tax credits expire?

According to the Kaiser Family Foundation (KFF), ACA plan premiums could increase by an average of 114% if Congress allows the credits to expire. That could mean a jump from $888 this year to nearly $1,904 per year for a typical beneficiary.

• Some enrollment experts warn that more than 4 million people could leave the marketplace entirely, overwhelmed by the cost.
• The expiration would hit middle-income households that were newly eligible for the enhanced credits the hardest. Many would lose all subsidy support overnight if Congress doesn’t act before Dec. 31, 2025.
• KFF reports that ACA marketplace insurers, anticipating coverage lapses, are already raising their proposed 2026 rates, with some reportedly increasing by as much as 18%.

Medicaid, meanwhile, faces its own set of cascading effects if the cuts take effect.

Past state-level rollbacks have shown that reduced federal Medicaid funding often leads states to restrict eligibility, cut provider payments, or both. So, fewer people are being covered and a greater strain is being placed on emergency care systems.

For more information, see: How Five States Are Worse Off After SNAP, Medicaid Cuts.

Government shutdown update: What's at stake?

As open enrollment for ACA began in November, some insurers and policyholders alike have been in limbo, unsure what premiums or coverage rules will look like. Some Medicaid participants wonder if new cuts could force them off coverage or reduce their access to care in the coming year.

As the government shutdown stretched on, President Donald Trump issued stark warnings about potential layoffs of federal workers. On social media, he framed the shutdown as what he called an “unprecedented opportunity” to cut federal programs aligned with Democratic priorities.

In an interview reportedly taped with One America News, as reported by PBS, Trump added, “There could be firings, and that would be their responsibility. There might also be other actions. We could eliminate projects they favor, and those would be permanently cut.”

Update: The government shutdown ended without an extension of ACA premium tax credit subsidies. A vote on the matter could take place in the Senate in December.

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• New Tax Rules: Income the IRS Won't Touch in 2025
• Premium Tax Credit: Are You Eligible?

The One Big Beautiful Bill Act, signed into law in July, has wide-reaching implications for taxpayers. From an enlarged standard deduction for older adults to more-generous tax credits for families with young children, the legislation contains a plethora of provisions that could lower your 2025 tax bill — or, in some cases, increase it.

Just as noteworthy as the new rules are those that extend provisions from the 2017 Tax Cuts and Jobs Act (TCJA). The OBBBA makes permanent the reductions in federal income tax rates that the TCJA implemented. (Otherwise, those tax rates would have expired on December 31.)

In addition, the OBBBA increases the federal estate tax exemption from $13.99 million per person in 2025 to $15 million per person, or $30 million for a married couple, in 2026. It will be adjusted annually for inflation.

Without congressional action, the exemption would have dropped to about $7 million after 2025. Because of the exemption’s size, the vast majority of taxpayers don’t need to worry about paying federal estate taxes.

You may want to schedule an appointment with your financial planner or tax preparer to discuss how the bill will affect your 2025 tax liability.

“You’ve got to run the numbers, because there’s so much that’s changing,” says Tim Steffen, director of advanced planning at Baird.

To get you started, we have guidance here on how to get the most from some of the significant provisions in the OBBBA.

A BONUS DEDUCTION FOR OLDER ADULTS

Starting with the 2025 tax year, taxpayers who are 65 or older will be eligible for an additional standard deduction of $6,000. The bonus deduction, which is scheduled to expire at the end of 2028, comes on top of an existing extra standard deduction of $2,000 for single filers who are 65 or older or, for married couples who file jointly, $1,600 for each spouse who is 65 or older.

The expanded deduction means a single taxpayer who is 65 or older will be able to deduct up to $23,750 from taxable income, while a married couple who file jointly will qualify for a deduction of up to $46,700, assuming both are 65 or older.

That can translate to significant savings for older taxpayers. For example, an older married couple in the 22% tax bracket (for 2025, that includes income of $96,951 to $206,700) could see tax savings of $2,640 a year, says Marilou Davido, a certified financial planner in Milwaukee.

Older taxpayers in lower tax brackets could save $600 to $1,200 a year, she says.

The legislation won’t eliminate taxes on Social Security benefits. But because the taxability of benefits is based on a calculation involving your adjusted gross income, the OBBBA will reduce the number of beneficiaries who pay the taxes from 36% to 12%, according to the White House Council of Economic Advisers.

Now for the caveats: The bonus standard deduction will affect only eligible taxpayers whose income exceeds the amount of the deduction, so low-income people won’t benefit from this tax break.

At the other end of the spectrum, higher-income taxpayers could see the amount of the bonus deduction reduced or eliminated altogether.

The deduction starts to phase out for couples with modified adjusted gross income of more than $150,000 ($75,000 for single filers) and is fully phased out at MAGI of $250,000 ($175,000 for singles). Your modified adjusted gross income is your adjusted gross income with certain deductions added back.

The higher standard deduction won’t shield Medicare beneficiaries who pay a surcharge, known as the income-related monthly adjustment amount (IRMAA), on their Part B and Part D premiums. The surcharge is based on a version of your MAGI that’s specific to Medicare and is calculated before the standard deduction applies.

Taxpayers whose MAGI is close to surpassing the eligibility threshold for the bonus standard deduction should consider avoiding moves that could reduce this tax break’s value.

For example, converting funds in a traditional IRA to a Roth IRA could reduce or eliminate the bonus deduction by increasing your MAGI, says Davido.

If you want to convert to a Roth, consider spreading out the conversions over several years to keep your MAGI below the threshold, she says.

One argument in favor of doing a Roth conversion is that it protects your nest egg from future tax increases, because Roth withdrawals are tax-free as long as you’re 59½ or older and have owned the Roth for at least five years.

But now that the OBBBA has extended current tax rates, individuals can spread out conversions without fear of a tax increase, at least under the current presidential administration, Davido says.

Timing matters, too: Converting to a Roth before age 65 would avoid the potential loss of the bonus deduction.

Capital gains distributions and withdrawals from traditional IRAs will also increase your MAGI. But there are steps you can take to offset that income and preserve the bonus deduction.

If you’re still working, increasing pretax contributions to 401(k) plans and health savings accounts (HSAs), for example, will reduce your MAGI.

Individuals who are 70½ or older can reduce their MAGI by making qualified charitable distributions from their IRAs, says Todd Calamita, a CFP in Charlotte, N.C.

In 2025, taxpayers can make QCDs of up to $108,000 from their IRAs to qualifying charities. If you’re 73 or older, a QCD will also count toward your required minimum distribution (RMD). A QCD isn’t deductible, but it’s excluded from taxable income.

Davido recommends working with your tax preparer or financial planner before year-end to adjust income-tax withholding and estimated tax payments for 2026. The bonus standard deduction could enable you to reduce the amount of tax withheld from your Social Security benefits and IRA withdrawals; you may also be able to lower your quarterly estimated tax payments.

A BIGGER BREAK FOR HOMEOWNERS

The OBBBA contains a valuable tax break for homeowners who live in high-tax states, and like the bonus standard deduction, the change could affect your 2025 tax bill.

Starting in 2025, those who itemize will be able to deduct up to $40,000 in state and local taxes (SALT), up from a cap of $10,000. The cap will increase by one percentage point each year through 2029, then return to $10,000 in 2030.

The SALT deduction includes state income, property and sales taxes; it’s often most useful for property taxes, which have soared as home values have risen in recent years. The primary beneficiaries will be homeowners in states with high property taxes, such as New Jersey and New York.

The cap is gradually reduced for those with MAGI above $500,000 ($250,000 for a married individual filing separately), and taxpayers with MAGI of $600,000 or more will be limited to deducting $10,000 on their tax returns.

Consequently, homeowners who are eligible for the higher cap need to be even more mindful of their 2025 MAGI, says Robert Keebler, a CFP with Keebler and Associates in Green Bay, Wis. This phaseout is potentially more costly than the phaseout for the bonus standard deduction, he says.

Keebler offers this example: Suppose you’re married, file jointly and have a MAGI of $500,000. Your itemized deductions include $40,000 in state and local taxes. If you convert $100,000 from a traditional IRA or 401(k) to a Roth, your gross income rises to $600,000, and your state and local tax deduction is reduced to $10,000. While your gross income went up by $100,000, your taxable income rose by $130,000.

At a 35% marginal rate, your effective rate on the conversion is 45.5%.

As is the case with older taxpayers, homeowners who are eligible for the higher SALT cap should consider spreading out Roth conversions and taking other steps to keep their MAGI below the thresholds.

Homeowners in high-tax states may get even more out of the higher cap by bunching their itemized deductions.

For example, if you paid your 2025 property taxes earlier this year and receive a bill for 2026 in December, pay it before December 31 so you can deduct both payments on your 2025 tax return, Davido says.

Using the bunching strategy, you would claim the standard deduction in 2026 and make two property tax payments in 2027 so you can itemize in that year.

Bunching your charitable contributions is also an effective way to increase your itemized deductions and lower your tax bill.

A donor-advised fund is a useful tool for this strategy. These funds, offered by major financial institutions, allow you to make a large contribution, deduct the donation on the current year’s tax return, and decide later which charities you want to support.

However, there are other provisions in OBBBA that could reduce the effectiveness of this strategy, which we’ll discuss below.

NEW STRATEGIES FOR CHARITABLE CONTRIBUTIONS

As you consider your year-end charitable contributions, it’s important to understand new tax breaks for givers — along with new limits on how much some donors will be allowed to deduct.

Starting in 2026, taxpayers who don’t itemize can deduct up to $1,000 in charitable contributions, or up to $2,000 for married couples who file jointly. Donations to donor-advised funds and private foundations aren’t eligible for this new deduction.

If you don’t itemize and want to take advantage of this tax break, consider making the charitable contributions you’d ordinarily make by the end of this year in January 2026 instead.

Meanwhile, taxpayers who itemize on their tax returns and deduct charitable contributions will be subject to a new limit on the amount they can deduct. The maximum amount of cash gifts donors can deduct will remain at 60% of AGI.

However, starting in 2026, the deduction will be limited to the amount of charitable contributions that exceed 0.5% of adjusted gross income, Steffen says.

For example, a married couple with AGI of $100,000 who donate $700 to charity will be permitted to deduct only $200.

To avoid that new floor, itemizers may want to make their 2026 contributions in 2025, keeping in mind how that will affect other aspects of their tax bill.

Taxpayers in the top tax bracket (for 2025, that includes income higher than $626,350 for singles or $751,600 for joint filers) may also want to accelerate charitable contributions into 2025 because of a cap on all itemized deductions those taxpayers can claim.

Starting in 2026, the amount of itemized deductions taxpayers in the 37% tax bracket can claim will be limited to 35% of their taxable income.

MORE BENEFITS FOR HEALTH SAVINGS ACCOUNTS

A health savings account can be a valuable tool to set aside money for both current and future health care expenses. An HSA provides a triple tax break: Your contributions are tax-deductible (or pretax if made through your employer), the money grows tax-deferred, and you can use it tax-free for eligible medical expenses in any year.

After you turn 65, you can also withdraw money tax-free from the HSA for Medicare premiums, in addition to other out-of-pocket health care costs.

The new law has three HSA-related provisions. Starting on January 1, 2026, you can withdraw up to $150 per month ($300 for couples) from an HSA tax-free to pay monthly or annual fees for direct primary care arrangements (also known as concierge medicine), in which doctors provide services in exchange for a membership fee.

The law also clarifies that enrolling in a direct primary care arrangement does not disqualify someone from being able to contribute to an HSA if they also have an eligible high-deductible health policy.

Not all concierge practices qualify under the new law as direct primary care arrangements — there are limits to the types of services they can provide beyond primary care.

Additionally, the law permanently exempts telehealth services from the HSA-qualified plan deductible. Most medical care, except for some preventive care, must be subject to the deductible for a health insurance policy to be HSA-qualified.

During the COVID pandemic, you could receive some telehealth services without first paying the plan’s deductible — typically with a $5 or $10 co-payment — but that rule expired at the end of 2024. The OBBBA permanently exempts telehealth from the deductible requirements, retroactive to January 1, 2025.

Finally, bronze plans and catastrophic plans sold on the Affordable Care Act insurance marketplace will automatically be HSA-qualified, starting with the 2026 plan year.

Using an HSA-eligible bronze plan and making tax-free withdrawals from your HSA to pay for direct primary care could be a win-win, says Roy Ramthun, founder and president of HSA Consulting Services LLC in Silver Spring, Md.

You can sign up for direct primary care for your regular doctor’s visits but have a high-deductible bronze plan as a backstop if you end up needing expensive medical care. You’ll be eligible to contribute to an HSA, and you can also use HSA money tax-free to pay the monthly direct primary care fees.

Notably, the version of the OBBBA that originally passed the House of Representatives would have allowed people who sign up for Medicare Part A to contribute to an HSA. But that provision wasn’t included in the final law, so the current rules still stand: You can make HSA contributions only if you haven’t enrolled in either Medicare Part A or Part B.

If you or your spouse is still working and you have health insurance from an employer with 20 or more employees, you can delay signing up for Part A and Part B. But you must enroll within eight months of losing that coverage; otherwise, you could face a lifetime late-enrollment penalty for Part B.

If you sign up for Part A after you turn 65, that coverage takes effect up to six months retroactively. Keep that time frame in mind when calculating your HSA contribution.

CHANGES TO THE HEALTH INSURANCE MARKETPLACE

Several administrative changes are coming to Affordable Care Act marketplace coverage because of provisions in the OBBBA, as well as new rules from the Centers for Medicare & Medicaid Services.

The open-enrollment period to sign up for a marketplace plan will be shorter. Next year, open enrollment for the federal marketplace (HealthCare.gov) will run from November 1, 2026, to December 15, 2026. States that operate their own marketplaces won’t be allowed to extend open enrollment past December 31. Currently, open enrollment goes to January 15, and even longer in some states.

Before you enroll in a marketplace plan, you’ll need to provide evidence of income eligibility for tax credits for your premiums. (Currently, you have 90 days after you enroll to submit the information.)

If your income increases after you enroll and you don’t update your information with the marketplace, you may have to pay back the extra subsidy when you file your income tax return.

Under the previous rules, there were limits to how much you have to pay back if you underestimate your income.

Enhanced subsidies are scheduled to expire

Perhaps the most consequential outcome for ACA plan enrollees is that the OBBBA didn’t extend enhanced premium subsidies for marketplace coverage. The enhanced subsidies are set to expire at the end of 2025, and Congress probably won’t pass additional legislation to extend them.

So the size of the subsidies and the income levels to qualify are likely to shrink significantly on January 1, 2026. People who earn more than 400% of the federal poverty level will no longer be eligible for any subsidies after 2025. For 2026 marketplace plans, 400% of the poverty level is $62,600 for singles and $84,600 for couples.

If you have individual health insurance from the ACA marketplace and you plan to do Roth conversions, you may want to convert more money before the end of 2025 than in 2026, when the extra income may make you ineligible for the subsidy.

“For a retired client, we’ve been able to do about $100,000 of Roth conversions yearly with the enhanced premium tax credits,” says Mark Whitaker, a CFP and founder of Retirement Advice LLC, a fee-only financial planning firm in Provo, Utah.

“Going forward, to hit their ACA subsidy levels, they will only be able to do about $60,000 of Roth conversions a year.”

But be sure to consider other variables, too, such as your tax rate and other income cut-offs. (For more, see the section above on the bonus deduction for older people.)

UPDATES FOR FAMILIES

If you have kids at home, you may benefit from multiple provisions in the OBBBA.

More-generous tax credits for parents

The OBBBA permanently extends the child tax credit and increases it to $2,200 per child, up from $2,000. The credit phases out for singles with modified adjusted gross income of $200,000 or more and married couples who file jointly with MAGI of $400,000 or more.

The OBBBA also makes permanent a separate credit of up to $500 for families with other dependents, such as parents or adult relatives.

The adoption tax credit is more valuable, too. If you adopted a child this year, you can claim a credit for up to $17,280 in eligible expenses. Here’s what’s new: $5,000 of the tax credit will be refundable.

In other words, taxpayers with tax liability of less than $5,000 can still claim that portion of the credit, which means some of that amount could be returned to parents as a refund.

Starting in 2026, the maximum tax credit parents can claim for child and dependent care expenses, such as the cost of day care or a nanny, will increase to 50% of as much as $3,000 in expenses for one dependent and 50% of as much as $6,000 for two or more dependents (both up from 35%).

The credit decreases based on adjusted gross income to as little as 20% of expenses, but OBBBA increased the income thresholds. For married couples with AGI between $150,000 and $210,000, the credit ranges from 35% to 20%. Couples with AGI of $210,000 or more are eligible for a credit of 20% of expenses.

Expanded uses for 529s

Originally designed as a tax-advantaged way to save for college, 529 plans have been expanded over the past several years to permit tax-free withdrawals for certain non-college expenses, too. The OBBBA extends these uses even further.

“The new rules allow up to $20,000 per year to be used for elementary and secondary school tuition, course materials, tutoring, fees for standardized tests, and more,” says Robert Farrington, founder of the website The College Investor.

Previously, tax-free withdrawals of 529 money for K-12 students were limited to tuition, up to $10,000 annually.

The legislation also permits tax-free 529 withdrawals for certain other expenses, such as non-degree credential programs for plumbing, electrical, HVAC and some other trades; certification and licensing expenses; and continuing education required to maintain those licenses.

That means beneficiaries who don’t go to college will have additional ways to benefit from tax-advantaged 529s.

The law permanently allows rollovers from 529 plans to ABLE accounts, where the money can continue to grow tax-deferred for people with disabilities who may not go to college.

Most of the changes related to 529 distributions took effect as soon as the law was signed on July 4, although the increased, $20,000 annual limit for K-12 expenses doesn’t apply until the 2026 tax year.

Keep in mind that not all states have altered their rules to follow the federal expansion. “For example, California doesn’t allow 529 plans to be used for elementary or secondary school expenses,” says Farrington.

Trump accounts for kids

The OBBBA introduces a new investment account — known as a Trump account — for kids younger than 18, and the government will seed the account with $1,000 for children born between January 1, 2025, and December 31, 2028.

Parents and others can contribute up to $5,000 a year to the account until the child turns 18. Contributions are invested in a fund that tracks a broad U.S. stock index, and they grow tax-deferred.

You may have better options for your child’s long-term savings. Annual contributions are not tax-deductible, and earnings are taxed at the beneficiary’s income tax rates when withdrawn.

Unless the money is used for certain expenses, such as education or up to $10,000 for a first-time home purchase, you’ll have to pay a 10% early-withdrawal penalty before age 59½.

“The only advantage of Trump accounts is the $1,000 birthday gift for newborn children. Families should, of course, accept the free money,” says Mark Kantrowitz, a college-savings expert and author of How to Appeal for More Financial Aid.

But for your child’s future college expenses, you’re better off contributing to a 529 plan, because withdrawals for qualified educational expenses are tax-free.

LAST CHANCE TO CLAIM TAX CREDITS FOR THESE ENERGY-SAVING MOVES

The OBBBA speeds up the deadlines to take advantage of certain tax credits related to saving energy.

The Energy Efficient Home Improvement Credit, which provides a 30% tax credit toward the cost of energy-efficient windows, home energy audits, heat pumps and other energy-saving home improvements, was previously scheduled to phase out in 2033. (The law imposed annual limits for certain projects, such as $600 for exterior windows and skylights.)

But now, the credit expires at the end of 2025. The Residential Clean Energy Credit, which provides a tax credit of up to 30% for more-ambitious projects, such as solar electric panels and solar water heaters, will also expire on December 31. The equipment must be installed and operational by year-end to qualify for the credit.

Additionally, the $7,500 EV tax credit to buy or lease qualified electric vehicles, along with the $4,000 credit for eligible used EVs, ends September 30, 2025.

At the same time, however, the OBBBA provides a new tax break for car buyers: a deduction of up to $10,000 in interest on loans for cars purchased between 2025 and 2028.

You don’t have to itemize to claim this deduction, but it’s available only for loans taken out to buy new cars assembled in the U.S., which rules out many popular models. The deduction phases out for individuals earning more than $100,000 or married couples making more than $200,000.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Similar to Social Security, Medicare is facing funding issues. You may have heard that the Hospital Insurance fund for Medicare Part A is expected to be able to fully pay scheduled benefits only until 2033, three years sooner than last year’s projection. However, it's not as if the cost of Medicare will stay steady and suddenly increase in 2033. Instead, Medicare beneficiaries have a more immediate problem in the form of rising premiums and surcharges starting in 2026 and continuing over the next decade.

The 2025 Medicare Trustees Report projects a steady increase in Medicare Part B premiums and IRMAA surcharges over the next nine years. The projections are based on expected rises in healthcare costs, particularly for outpatient hospital services and physician-administered drugs. It's crucial for retirees and those approaching retirement to understand these projections for proper financial planning.

It's essential to note that these projections are subject to change, and the official figures may vary. The Centers for Medicare and Medicaid Services (CMS) will release the official numbers this fall.

Projected Medicare Part B premiums

The projections in the 2025 report show a significant increase compared to last year's report. The largest year-over-year jump is expected between 2025 and 2026, with a projected increase of $21.50, setting the 2026 Part B premium at $206.50, up from $185.00. The 2024 report projected a 1% increase from 2025 to 2026, with premiums rising to $186.90, only $1.90 more.

The report estimates that the standard monthly premium for Medicare Part B will potentially reach almost $350 by 2034. If the estimates are accurate, the Part B premium is expected to increase by 188% by 2034.

Here is a table with the projected standard monthly premiums:

Projected Medicare Part B IRMMA surcharges

The IRMAA is a monthly surcharge added to the standard Part B premium. The SSA uses the most recent complete federal tax return data that the IRS provides to assess your liability for the IRMAA, generally, two years prior. For 2026, the SSA will look at your 2024 tax return to calculate the surcharge you owe, if any.

These surcharges, which affect high-income beneficiaries, are expected to grow significantly over the next nine years.

Essentially, those who pay the IRMAA are paying a greater share of their actual Medicare Part B and D premiums. As it stands, the government pays a substantial portion — about 75% — of the Part B premium for most beneficiaries who pay, on average, the remaining 25%. For 2024, premiums from Parts B and D covered 23% of Medicare program costs, according to the 2025 Trustees' Report.

If you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on the income reported on your annual tax return. You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount. For 2025, the IRMAA Part B surcharge ranged from $74.00 to $443.90 per month, or $888 to $5,326.80 annually, on top of the base premium of $185.00.

For 2026, the standard Part B premium is projected to be $206.50, and monthly Part B surcharges will range from $82.60 to $495.60.

Here is a table with the projected Part B IRMAA surcharges:

Other factors that contribute to IRMMA surcharges

As I explained above, the IRMAA surcharge shifts responsibility for a greater portion of Part B premiums from the Medicare trust fund directly to high earners. However, politics also plays a role in determining how many people pay the IRMAA by adjusting thresholds, freezing inflation adjustments and changing methodologies.

Effective in 2018, the Medicare Access and CHIP Reauthorization Act of 2015 lowered certain income thresholds used to determine the IRMAA amounts that beneficiaries must pay, resulting in a greater number of beneficiaries paying the higher amounts. Moreover, beginning in 2020, the legislation adjusted the methodology used to index the thresholds, and accordingly, more beneficiaries will be subject to the income-related premiums.

Lastly, the Bipartisan Budget Act of 2018 established an additional premium level that took effect in 2019 for individuals with incomes at or above $500,000 (and couples with incomes at or above $750,000), who pay a premium covering 85% of the average program cost. These thresholds will not be indexed until 2028 at the earliest.

Editor’s note: This story has been updated to reflect the amounts at which the 2025 IRMAA surcharge starts.

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Medicare generally covers the COVID-19 vaccine, including all updated versions, at no cost to beneficiaries. However, some people have been charged or turned away due to recent issues with pharmacy billing and system updates, as well as a delay between the FDA's and CDC's formal recommendations.

Here's what Medicare beneficiaries need to know about getting the COVID-19 vaccine this fall.

Does Medicare cover COVID-19 vaccinations?

Medicare's coverage of the COVID-19 vaccine falls under Medicare Part B, which also covers other preventive vaccines like the flu and pneumonia shots. This means you should not have to pay a copay, deductible, or any other out-of-pocket costs for the vaccine itself or for its administration, as long as the provider accepts Medicare assignment.

This coverage applies whether you have original Medicare or a Medicare Advantage Plan (MA). MA plans must, at a minimum, cover everything Medicare covers. If your Medicare Part B plan covers the COVID-19 vaccine, then your MA plan also has to cover it. However, if you have a Medicare Advantage plan, you may need to go to a pharmacy or provider that is in your plan's network.

The biggest source of confusion and barrier to Medicare beneficiaries getting their COVID-19 vaccine covered by Medicare is the CDC's failure to formally adopt the FDA's 2025-26 COVID-19 vaccine recommendations.

The Advisory Committee on Immunization Practices (ACIP), a CDC panel comprised of experts, has yet to vote on the updated recommendations and give them its stamp of approval.

In June, HHS Secretary Kennedy removed all 17 members of the panel, stating in a press release, “A clean sweep is necessary to reestablish public confidence in vaccine science” and "ACIP's new members will prioritize public health and evidence-based medicine."

Why some people are being denied coverage

Despite Medicare's policy of covering the vaccine, some Medicare participants are being improperly denied coverage for the new COVID-19 vaccine at pharmacies. This is partly due to a splintered regulatory environment, creating confusion for both patients and pharmacists.

The CDC's Advisory Committee on Immunization Practices (ACIP) met on June 25. Despite the notice regarding the meeting posted to the Federal Register on June 9, including recommendation votes for COVID-19 vaccines under 'Matters to be Considered,' the vote did not take place. They did, however, approve recommendations for the RSV and seasonal influenza vaccines.

FDA approval vs. CDC recommendation. The new COVID-19 vaccine has received approval from the U.S. Food and Drug Administration(FDA) for specific groups, including those 65 and older and those with certain underlying health conditions that increase their risk of severe COVID-19. FDA approval alone doesn't guarantee access to the vaccine.

In 18 states and Washington, D.C., pharmacists are only permitted to administer a vaccine if it has also been recommended by the CDC's Advisory Committee on Immunization Practices (ACIP), said Brigid Groves, the American Pharmacists Association’s Vice President of Professional Affairs, as reported by Politifact.

The lack of official recommendations has created a "regulatory patchwork" where some pharmacies are holding off on administering the vaccine to anyone, or are only offering it with a doctor's prescription.

Here are the key reasons for these denials:

• State-specific regulations: A number of states have laws or regulations that prevent pharmacists from giving vaccines that aren't on the ACIP's recommended list, even if the FDA has already authorized them. This means that a person could be eligible for the vaccine under the FDA's criteria, but the pharmacy is legally unable to administer it until the ACIP recommendation comes through.
  • Those states are: Colorado, Connecticut, Georgia, Iowa, Kentucky, Maine, Maryland, Massachusetts, Montana, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, South Carolina, Virginia and West Virginia.
• The shift to a commercial market post-pandemic: COVID-19 vaccines transitioned to the commercial market after Secretary Kennedy declared in August that the public health emergency was over. While Medicare continues to cover the vaccine series and boosters, the process for billing and reimbursement has changed. Some pharmacies may be facing administrative hurdles or are confused about the new billing codes, leading them to deny coverage to avoid issues.

What happens if you are denied coverage

According to Newsweek, some Medicare beneficiaries who were denied coverage for the COVID-19 vaccine were told to pay out of pocket, with costs exceeding $200.

For instance, a woman in California was initially denied coverage because the vaccine "wasn't in the Medicare system." She chose to pay $225 out of pocket for the shot. In a similar case, a couple in Texas encountered the same denial but was able to get their shots after Medicare updated its system.

If you have Medicare and meet the FDA's criteria, a denial for a covered vaccine is improper. The FDA has approved the COVID-19 vaccine for people 65 and older.

If you have trouble getting your vaccine, first confirm your eligibility based on the FDA's criteria, then contact Medicare directly at 1-800-MEDICARE for help.

Call your pharmacy before you go. With all of the confusion over FDA vs CDC approval and the need to update computer systems to properly process vaccine authorizations at pharmacy counters, it's worth a phone call to your local pharmacy before you head out.

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Medical debt might seem as though it’s a problem limited largely to people who lack adequate health insurance coverage.

But even those who have a health plan could find themselves struggling to pay bills.

According to a 2023 study from health care advocacy organization The Commonwealth Fund, 30% of adults with employer coverage were paying off debt from medical or dental care, as were 33% of those with Medicare, 33% of those with an individual or Affordable Care Act marketplace plan, and 21% with Medicaid.

Cutbacks to Medicaid funding in the One Big Beautiful Bill Act, which became law over the summer, have raised concerns that more people will find themselves immersed in medical debt.

“It’s such a common burden because of the complexity and lack of affordability in our health care system, even if you have insurance,” says Ruth Landé, vice president of provider relations at Undue Medical Debt, a nonprofit organization working to alleviate the burden of medical debt.

If you rack up big bills while you’re still subject to your health plan’s annual deductible, you might be on the hook for thousands of dollars before your insurance coverage starts — especially if you have a high-deductible plan.

Even after insurance kicks in, the out-of-pocket costs for co-payments, co-insurance, or charges for out-of-network care can stack up.

Hospital stays and surgeries or serious illnesses that require inpatient care, such as appendicitis or a heart attack, often have hefty costs for patients. Bills for room charges, surgeons, anesthesia, or imaging can quickly accumulate.

Emergency room visits are also a driver of medical debt, although thanks to the federal No Surprises Act, patients can’t be billed more than the in-network rate for emergency care, even at an out-of-network hospital or if some of the providers are in network and some are out of network.

Treatment for chronic illness is another common culprit. Conditions such as diabetes, cancer, heart disease, asthma and autoimmune disorders require regular care, tests and medications, and ongoing expenses for treatments such as insulin, chemotherapy and dialysis can add up.

Insurance plans might cover only certain treatments, medications or specialists. Some newer or specialized drugs or therapies might be only partially covered — or receive no coverage at all — and the specialists you prefer to visit might not participate in your insurer’s network, resulting in substantial out-of-pocket expenses for you.

Costly medical bills might feel insurmountable, but the worst move you can make is to ignore them or forgo care that you need out of fear of going into debt.

According to the Commonwealth survey, nearly two in five working-age adults had delayed or skipped needed health care or a prescription drug in the past year because they couldn’t afford it. If you’ve received a medical bill that you can’t pay, or if you’re already in debt, you can take action to get some relief.

Confirm that the charges are accurate

Make sure that you truly owe the charges you’re being asked to pay. Review copies of your bills, explanations of benefits (EOBs) and other communication from your insurance company and health care providers as soon as you get them.

Insurance companies typically send EOBs in the mail, but you can also usually find them by logging in to your account on the insurer’s online portal. If you can’t locate an EOB for a medical service you received, call your health care provider to be sure it has your insurance information and that it billed the insurance company.

Look for problems such as duplicate charges, charges for services you didn’t receive, incorrect information about you and any medical conditions you might have, and billing for an out-of-network provider when you visited an in-network one.

If you notice that your insurance company paid for a service you didn’t receive, you should point that out, too; even though you might not owe any money, incorrect billing can still be a problem for you because it could cause denials of future claims if the insurance company thinks you already had certain treatments.

Keep in mind that if you get a bill long after you received a medical service, it might be because of ongoing disputes between health care providers and insurance companies, says Landé.

Reach out to the provider or insurance company as soon as possible if anything looks out of place or you don’t understand your charges — and consider doing so by e-mail to keep a paper trail. If your insurance company is denying coverage that you believe you deserve, you can appeal it.

If your health care provider or insurance company fails to resolve inaccurate bills, you can file a complaint with your state’s department of health (find its website at www.usa.gov/state-health), its department of insurance (https://content.naic.org/state-insurance-departments) or, sometimes, its attorney general (www.naag.org/find-my-ag).

These entities can review your complaint, and they might contact the provider or insurer to investigate, though the extent to which they take action to help you will vary by state.

For example, the Illinois Department of Insurance reviews complaints about insurance billing and can take corrective action if necessary, as does the New York State Attorney General’s Health Care Bureau.

Create a payment plan

Once you establish that you’re responsible for a bill, the next step is to figure out a plan to pay it. If you can’t afford it up front, make that clear to the health care provider.

“Providers often just don’t know the economic circumstances of folks. But if they do, they can classify your care as charitable care or offer financial assistance,” says Landé.

Even if you have health insurance, you might qualify for assistance. They might forgive a portion of your bill or, in some cases, the entire amount. Most providers also allow patients to set up zero-interest payment plans.

If you need some extra guidance, consider reaching out to a nonprofit organization such as Dollar For, which offers free help navigating medical financial-assistance applications.

Although it might be tempting to pay a medical bill with a credit card — especially if the bill is unexpectedly large and you don’t have money readily available to pay it — avoid doing so at all costs, says Landé.

If you carry a balance from month to month on your card, you’ll likely pay interest on that debt at a steep rate — an average of 20%, according to Bankrate.

Manage a debt in collection

If you don’t work out a plan to pay a medical bill, the provider might eventually turn the debt over to a collection agency. In some cases, a collection agency might track you down and legally require you to pay under the threat of being sued. Sometimes debt collectors also threaten wage garnishment, meaning your employer could withhold some of your pay to cover the debt.

If you have a medical debt in collection, pay only what you can afford. Don't stop taking medications, visiting your doctor, or paying for housing and utilities. A good general rule is to spend no more than 3% to 6% of your gross income on out-of-pocket medical bills, says Landé.

Debt-collection agencies can work with you to create a payment plan. You might also want to get help from a credit counselor. To connect with one, go to the website of the National Foundation for Credit Counseling.

If a debt-collection lawsuit is filed against you, respond either personally or through an attorney by the date specified in the court papers.

To preserve your rights and the chance to fight a court order, respond promptly. Consider enlisting the help of a legal aid organization such as the Legal Aid Justice Center.

Know your rights

Your state could offer legal protections when it comes to the collection of medical debt. Many states restrict health care providers’ ability to sue patients for their medical debt, often by regulating whether or how they can send debt to collection agencies.

On the federal level, the Fair Debt Collection Practices Act bans debt collectors from using abusive, unfair or deceptive methods.

In recent years, both policymakers and the credit industry have made efforts to lessen the impact that medical debt has on your credit.

Some states (California, Colorado, Connecticut, Illinois, Maryland, Minnesota, New Jersey, New York, Rhode Island, Vermont, Virginia and Washington) have laws in place that prevent or restrict the reporting of the debt to the credit-reporting companies (Equifax, Experian and TransUnion).

In January, under the Biden administration, the Consumer Financial Protection Bureau finalized a rule that banned the inclusion of medical debts on credit reports and prevented lenders from using medical information in credit decisions.

The rule was supposed to go into effect in March. But under the Trump administration, the CFPB no longer supports the rule, and it faces legal challenges from credit-industry groups.

Still, the credit-reporting companies have made policy changes that limit how medical debt might appear on credit reports. Credit reports no longer list medical debts that have been paid, unpaid medical debt that is less than a year old, or medical collections of less than $500.

Major credit-scoring models have altered their formulas to lessen medical debt’s negative effects on the scores. Unpaid medical debt has a smaller impact on FICO scores than other unpaid debt, for example. (Note that if you paid a medical bill with your credit card, that debt is typically not classified as medical debt.)

Make a plan now to avoid debt later

If you have solid health insurance, you can make moves to help you avoid falling into debt in the first place. Preventive care, such as regular check-ups, can ward off expensive health issues. Most health insurance plans must cover certain preventive-care services at no cost.

“Take advantage of your annual wellness visit or annual physical and get to know your preventive benefits,” says Tatiana Fassieux, education and training specialist for California Health Advocates.

Get to know your family history, too, says Fassieux. Even if you’re healthy now, being aware of whether certain medical conditions run in your family may help you assess your risk for future needed care, she says. The U.S. Surgeon General’s “My Family Health Portrait” tool can help you gather information about your family health history and learn about your risks.

If you anticipate that your health care needs might increase in the coming years, consider how your insurance plan would cover you. Compare premiums and deductibles to find the balance of monthly costs and maximum out-of-pocket expenses that will work for your budget.

If you expect to use health care services frequently, you may want to steer clear of a high-deductible health plan unless you have enough money in savings to fully cover the deductible. HDHPs have been associated with statistically significant lower use of evidence-based clinic visits, laboratory tests and prescription drugs for individuals with chronic illnesses, according to a recent study by the Journal of the American Medical Association.

For planned medical services, you should familiarize yourself with the up-front costs — and that starts with knowing the ins and outs of your insurance coverage. Before you receive a treatment, verify that all the providers involved are in-network under your plan. It’s not uncommon for one provider, such as your primary care doctor or surgeon, to be in-network, while others, such as the anesthesiologist or radiologist, are not.

Reviewing coverage in advance with a provider who will be on your care team may help you avoid unexpected costs.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Question: I'm 60 with $2.8 million saved. I'm miserable working, but I need health insurance until I can get Medicare at age 65. What are my options?

Answer: By age 60, you may be at the point where you’re unhappy at your job and can’t take the grind any longer. If you have a large pile of savings, you may be perfectly positioned to make an early workforce exit.

There’s just one problem. Unless you have a spouse who’s still working with a company health insurance plan you can hop onto, you’re going to have to pay for coverage yourself until you become eligible for Medicare. Generally, that doesn’t happen until you turn 65. Having to pay for health insurance could whittle an otherwise generous nest egg down too quickly for comfort. That doesn’t mean you don’t have options, though.

Know what it will cost to pay for health insurance

It may be that if your portfolio is generating a nice amount of income and your living costs are fairly low, you can afford the expense of health insurance premiums for a five-year period with $2.8 million in savings. But it’s important to know what you’re getting into, says Scott Sturgeon, CFP and Founder/Senior Wealth Advisor at Oread Wealth Partners.

“A person retiring at 60 essentially enters a 'health care desert' where they have to go out and find some sort of coverage on their own,” he says. “When I run projections for a client in this situation, I would probably budget at least $1,000 per month, per person in health insurance premiums as part of their cash flow plan.”

Of course, Sturgeon cautions, the cost of health insurance can vary based on your needs and your market. But that’s a starting point he likes to work with.

However, there’s another option, says Sturgeon. Whether it’s more cost-effective, though, depends on the circumstances.

“If they can hold out a couple of years, COBRA may also be an option where they maintain the current health care plan they have through work but have to pay the premiums themselves,” he says. “That can get pricey, so it's something that needs to be reviewed carefully.”

Gil Baumgarten, Founder and CEO at Segment Wealth Management, agrees that COBRA could be an option but warns that it typically has an 18-month limit. Even if you’re willing to cover the cost, it won’t bridge a five-year gap until Medicare kicks in. And he says that based on his experience, “A 60-year-old couple should expect to pay $15,000 or more per year for coverage.”

Consider a health insurance co-op

Given the high cost of health insurance, Baumgarten says people retiring before becoming eligible for Medicare could consider another option — a health insurance co-op. This option, he says, can result in big savings.

“There are several that are faith-based for whatever religion might apply,” Baumgarten explains. “Christian Health Ministries and Christian Healthcare Plan offer practicing Christians an expense-sharing co-op that is significantly less expensive than traditional insurance. United Refuah HealthShare offers similar resources for Jewish affiliations, also at greatly reduced cost as compared to traditional insurance.”

This option, however, may not be available in all markets. And you may not receive the same level of coverage as through a traditional insurance plan.

A scenario worth planning for in advance

Some people don’t realize they want to retire ahead of Medicare eligibility until they reach a certain point in their careers when they can’t take it anymore. That’s why Sturgeon thinks younger workers should anticipate wanting to retire well before 65 — and plan accordingly.

In this situation, he says, “If we could rewind 10 or 20 years, the ideal strategy I would suggest is using a high deductible health care plan, maxing out their health savings account, paying out of pocket for any deductibles, and investing the HSA funds.”

As Sturgeon explains, someone with a lofty HSA balance could dip into those dedicated funds, enroll in an ACA plan with a fairly high deductible at 60, and then use HSA funds to pay those expenses until Medicare becomes available.

Of course, it’s also possible to dip into your general savings to cover health care costs as they arise. The question, though, is whether you can afford to.

With $2.8 million in savings, you have some wiggle room to dip into your savings to cover health care costs. But a better bet would be to try to limit health care withdrawals until Medicare kicks in.

To this end, working part-time is something to consider, as it could allow you to secure health coverage through an employer, even if the coverage itself isn’t that great. At the very least, you may not have to bear the cost of premiums on your own.

Going without health insurance isn't an option

If you’re fairly healthy at age 60 and don’t want to see your hard-earned savings dwindle, you may be tempted to forgo health insurance completely and hope for the best until Medicare becomes available to you. But that, cautions Baumgarten, is a big mistake.

“Going without insurance at that age can also completely wreck your finances with a major health event,” he warns.

If you’re truly done working, period, at 60, your best bet may be to budget carefully and live a bit more frugally while paying for health insurance through age 65. Once Medicare kicks in, you may be able to boost your spending in other areas.

Also keep in mind that come age 67, you’ll be eligible for your monthly Social Security benefits without a reduction. That, combined with distributions from your remaining savings, could make for a reasonably comfortable retirement lifestyle, even if your nest egg was tapped substantially during the five-year period when you were covering your health insurance costs.

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Medicare premiums and deductibles typically increase annually. Part B premiums are expected to rise 11.6% in 2026, nearly double the six percent jump in 2025, according to the 2025 Social Security and Medicare Trustees Report (page 204). The report projects a $206.50 monthly premium for next year, up $21.50 or 11.6% from 2025 and the largest Part B increase in dollar terms since 2022, when premiums rose by $21.60.

The premium for Medicare Part D is different from the Part B premiums in a few ways. Unlike Part B, Part D is sold by private companies as a standalone policy to those enrolled in traditional Medicare. It is also sold to beneficiaries with Medicare Advantage plans that don't include prescription drug coverage.

The actual premium that a beneficiary pays varies according to the plan in which the beneficiary enrolls. That's why the average paid premium for Part D has always been lower than the base beneficiary premium listed in the Trustees report. For 2026, the base premium for Part D is projected to be $38.99.

The projected Part B increase impact on Social Security benefits

How might prices rise even more? Well, the 2026 Social Security COLA is projected to rise between 2.6% and 2.7%. In terms of dollars, if implemented now, that would translate into an increase of $54.18 per month or $650.16 per year, when using the average Social Security check amount for July 2025 ($2,006.69) as the base amount.

The Social Security Administration (SSA) automatically deducts the Part B premium cost from the Social Security benefits of most Medicare recipients. That would effectively reduce the increase to the average Social Security check from $54.18 to $32.68, after subtracting the projected Part B increase ($21.50) from the projected 2026 COLA raise ($54.18). In that scenario, the Part B increase will consume almost 40% of the monthly increase.

Medicare Part B premiums in 2026

Medicare Part B pays for doctor visits, outpatient care and some home health care. When enrolled, you pay both a deductible and a monthly premium. For 2026, the premium is currently projected to rise 11.6% to $206.50, up $21.50 from $185.00 in 2025.

The Part B deductible is projected to be $288.00 in 2026. That would be a $31.00 increase over the 2025 amount of $257.00. On a percentage basis, it's an increase of 11.2%, in line with the estimated increase of the Part B premium.

Understanding Medicare Part D premiums

Unlike Part B, there isn't a single "standard" Part D premium as it varies by plan. However, the average monthly Part D premium has been relatively stable due to a premium stabilization demonstration that was put in place as part of the Inflation Reduction Act(IRA). The continuation of this demonstration for 2026 is a key factor in keeping Part D costs down.

The premium stabilization provision of the IRA limits the amount of the higher costs of Part D drug coverage that plan sponsors can pass on to Medicare enrollees through premium increases. The IRA caps the annual base beneficiary premium (BBP) growth at 6% in 2025. The cap is enforced through increased Medicare subsidies paid directly to plan sponsors.

Annual deductible: The standard Part D deductible is projected to increase to $615 in 2026, up from $590 in 2025.

Out-of-pocket spending cap: A positive change coming in 2026 is the annual out-of-pocket spending cap for prescription drugs under Part D, which will rise to $2,100. This is an increase from the $2,000 limit in 2025. Once beneficiaries reach this cap, they will no longer pay out-of-pocket costs for covered prescription drugs for the remainder of the year.

The value of tracking the projected premiums

Medicare open enrollment runs from October 15 to December 7 annually. During this period, you can switch from original Medicare to a Medicare Advantage plan, or vice versa. You can also choose a new Advantage plan or Medicare Part D prescription drug coverage.

To get the most from your plan, it’s important to understand your out-of-pocket costs for premiums, which will vary depending on your plan and income. For instance, you could also owe a monthly surcharge on Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA).

Your IRMAA liability for 2026 will be based on the MAGI shown on your 2024 return. While you can't do anything to change your 2024 tax return, you can look over your finances to see if you are in danger of paying the IRMMA in 2027, which will be based on your yet-to-be-filed 2025 tax return.

Income planning can go a long way in limiting your exposure to the surcharge. For instance, a well-timed Roth conversion can reduce your taxable income and eliminate required minimum distributions (RMD).

The Centers for Medicare & Medicaid Services (CMS) has started releasing information for plan year 2026. In the lead-up to the release of the new premium and deductible amounts, the CMS has adopted some new rules and updated existing numbers in preparation for the open enrollment season that begins in October.

Check out these Nine Medicare Changes Coming in 2026 and check back periodically; I will be adding to the list as more information becomes available.

Projections for Medicare Part B and Part D premiums for 2026 are primarily derived from the annual Medicare Trustees Report. While the final figures are usually announced by CMS in October of the preceding year (so, October 2025 for 2026 premiums), the Trustees Report provides strong estimates.

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If you're like many pre-retirees, you dread the task of estimating your retirement health care expenses.

That's because this somewhat complex task involves projecting expenses around unknown future health problems, while debating the merits of Medicare Supplements (aka Medigap) vs Medicare Advantage or comparing health care exchange policies if you aren't yet eligible for Medicare.

Avoiding or postponing this task can lead to the tendency to underestimate retirement health care expenses.

A Jackson study found that nearly two-thirds of pre-retiree investors underestimate their expected health care retirement costs and responded that they anticipate health care expenses significantly below the retirement average of $8,600 a year per person.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

Health care costs vary in retirement based on when you retire, how healthy you are, how long you are likely to live and health care price inflation.

In this article, you'll learn what health care expenses you might expect in retirement and how to proactively plan for them.

Retirement health care expenses

You can divide retirement health care expenses into these five common categories:

• Premiums. Monthly cost for the coverage you select
• Deductibles. The amount you pay upfront for certain services before coverage kicks in
• Cost-sharing or copays. Costs for doctor's visits, medical procedures, lab tests and prescriptions that you pay a portion of
• Out-of-pocket costs. Costs for doctor's visits, medical procedures, lab tests and prescriptions that aren't covered by your insurance
• Long-term care expenses. Costs for assisted living, nursing home care and home health aides, which are not covered by Medicare

Medicare eligibility begins at 65. According to a study from Milliman, the earlier you retire before Medicare eligibility, the more your health care costs will increase. Conversely, the longer you wait to retire after age 65, the more your costs decrease.

Living even five years longer than your targeted life expectancy will increase your health care spending by 42%.

Because health care costs tend to rise faster than general inflation, your health care spending is likely to increase at a higher rate than you may expect over a 25- to 30-year retirement.

Retiring before age 65 means you'll have to pay more of your own health care expenses because you won't be covered by employer health care insurance. You'll either need to continue your employer-based coverage — potentially at your own cost — or sign up at HealthCare.gov, also known as Obamacare and the Affordable Care Act (ACA).

Costs on the exchange depend on your income, where you live and the type of coverage you sign up for and include a combination of premiums, deductibles, copays and out-of-pocket costs.

Depending on your income, you may qualify for a government subsidy for your premium. If you don't, premiums for an individual insurance policy on the ACA Marketplace run on average between $800 and $1,200 a month for someone age 62 to 65.

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Once you are on Medicare, you'll have ongoing premiums that stack up differently depending on whether you choose a Medicare Advantage plan, which covers your hospitalization, doctor's visits, prescriptions, lab work and outpatient care, or whether you go with a Medicare Supplement plan that supplements traditional Medicare.

How to plan for health care expenses in retirement

Regardless of whether you're covered by Medicare or the ACA, yearly average medical costs in retirement — excluding long-term care — average $8,600 a year, according to the Jackson study mentioned above.

Use this as a baseline for your first year of retirement and bump it up annually to cover inflation and the higher cost of health care inflation.

A good potential rule of thumb would be to add 5% a year to the $8,600 figure and stick that in your budget.

The table below shows how health care costs, excluding long-term care, are likely to rise every five years after retirement.

Of course, your costs are likely to vary, perhaps even significantly, should you have a chronic or life-threatening health condition, but budgeting in this way will at least keep you in the neighborhood where your costs are likely to end up.

Source: SEC Compound Interest Calculator

A final word

Health care expenses could be a major factor in retirement income and expense planning.

By understanding what your health care costs are likely to be in retirement and factoring those costs into your retirement expense budget, you're likely to create a more realistic idea of your retirement expenses and avoid unexpected, budget-busting expenses.

Lucas Cox, CFP®, CKA®, RICP®, NSSA® is a financial advisor at The Lighthouse Planning Company in Russellville, Arkansas, and a licensed insurance professional. AR insurance license #16128263. Investment advisory services offered through CreativeOne Wealth, LLC, a registered investment adviser. Confident Financial Solutions and CreativeOne Wealth are unaffiliated companies. We are not affiliated with or endorsed by Medicare or any government agency, and do not provide tax or legal advice.

This material is for informational purposes only and should not be construed as a recommendation or advice for your particular situation. Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing company.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Building a sustainable and lucrative business model often requires thinking beyond the basics. One such opportunity for financial professionals is capitalizing on Medicare to build a significant amount in a renewal stream.

I'm not kidding. By leveraging your existing client base and offering them Medicare strategies, you can help create a predictable, long-term income source through renewals. This isn't me preaching, but speaking from experience.

I have asked many financial professionals, "Will you get rich overnight offering Medicare to your clients?" The answer is no.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

But can you build wealth over time? Absolutely — with the right strategy and patience, it's within reach.

Advisors Excel launched its Medicare Solutions division in 2019. Fast-forward just six years, and the fruits of our labor are paying big dividends for hundreds of producers.

In 2024, for instance, AE producers earned more than $15 million in commissions and renewals solely from Medicare.

What's keeping you from getting in on the action? The opportunity to help several of your clients and even prospects can be limitless.

The opportunity with Medicare

You've likely heard the statistic that over 11,000 Americans will turn 65 every day this year — and every one of these individuals needs to make a Medicare decision. Based on those numbers, the opportunity to help several of your clients and even prospects can be limitless.

What makes Medicare sales particularly attractive for financial professionals is the nature of renewal commissions.

Unlike many types of insurance policies that require clients to reapply annually or every few years, Medicare Advantage and Medicare Supplement, or Medigap, policies often offer ongoing renewal commissions as long as the client remains enrolled in the plan.

By selling Medicare to your existing clients, you can build a recurring revenue stream, creating the potential for substantial financial growth over time.

A value-add for existing clients

If you already have a client base that trusts you for other financial products, offering Medicare can be a natural extension of your services.

The key is to approach the conversation in a way that emphasizes the value it provides to your clients rather than simply focusing on making a sale.

One way to do this is to offer a "Medicare Checkup" or "Medicare Review" service, where you schedule regular meetings with clients to help ensure they're in the right plan based on any changes in their health or financial situation.

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Doing this year after year offers the opportunity to create a strong client-retention strategy while simultaneously building a renewal stream.

Another way to increase awareness with your current clients and prospects is to hold a "Medicare 101" seminar.

AE Medicare Solutions has all the tools to help with this; we can provide the presentation deck, speaker notes and guidance on which trusted vendors can help get the invite out.

So again, what's keeping you from getting in on the action?

Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier.

Our firm is not affiliated with the U.S. government or any governmental agency. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Past performance is not indicative of future results. 4511538 – 7/25

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Chances are, you’ve heard of the Trump megabill that was recently signed into law. The so-called “One Big Beautiful Bill” (OBBB) is garnering chatter and for good reason: A lot is included in the mega legislation.

But even though many provisions survived the bill’s initial proposal, several did not. For instance, under the originally proposed megabill, gym memberships — and therefore pickleball courts in gyms — could have been eligible expenses for Health Savings Accounts (HSAs).

*HSAs are tax-advantaged savings accounts that allow pre-tax contributions and tax-free withdrawals for qualified medical expenses.

While the provision to make gym memberships HSA-eligible didn't make it into the final version of the OBBB, you may still be able to claim certain expenses for staying active in retirement.

Stay active in retirement with HSA-eligible expenses

Retirees may use HSAs to save on taxes while playing sports — or by participating in other exercises — in retirement.

For instance, as a pickleball player (or “pickler”) myself, I often put in contact lenses when I go out to play. Prescription contact lenses and glasses are HSA-eligible.

Here are a few other examples of HSA-eligible expenses for retirees who like to stay active:

• Allergy medications, for playing outdoor sports like golf or basketball.
• First aid kits are helpful for all occasions, but particularly for contact sports.
• Hearing aids — so you can properly hear if that tennis or pickleball was “out” or not!

But you may be wondering: Is sports equipment or facility usage HSA-eligible? Well, that depends.

If you meet the strict guidelines of having a “Letter of Medical Necessity” (LMN) from a doctor specifying that, say, “golf” is medically necessary for the specific condition you have, then your golf expenses might be HSA-eligible. However, that rarely happens and is often not the case.

And while you can use HSA funds for a non-qualified expense, like pickleball, without penalty after you reach 65 years old, the withdrawal would be considered taxable income.

But that shouldn’t stop you from reaping the health benefits of staying active in retirement.

Best sports for older adults may increase life span

Exercising is tough for all ages, but it can be particularly difficult as you get older. Human bodies don’t work the same at age ten as they do at age 70.

However, exercising in retirement can significantly improve your health. The Physical Activity Guidelines for Americans, released by the U.S. Department of Health and Human Services, suggests that 150 minutes of brisk walking or 75 minutes of running each week may help you live longer.

And according to AARP, ten types of exercise can help you achieve a longer lifespan. Here are the top five:

• Walking. Almost one-third of older adults report they do some type of brisk walk each day.
• Running. If you have a busy schedule, going for a run can cut down on the time spent exercising.
• Water aerobics and workouts. One study of 80,000 people found that swimmers were 41% less likely to die of a heart disease or stroke, per AARP.
• Dancing. Whether it’s swing, line dance, or ballroom, dancers may have stronger muscles, better balance, and a better mood, according to AARP.
• Weightlifting. For the seriously motivated, lifting weights is an excellent way to maintain physical strength in retirement, helping with tasks like climbing stairs or carrying heavy groceries, per the National Institute on Aging.

Other popular exercises in retirement include golf, tennis, and badminton. I tend to gravitate towards pickleball or aerobics classes myself (town or city-led community centers can have cheaper class rates and feature more older adults than maybe privately-led sessions). But it’s really a matter of personal preference.

Of course, as with all exercises, it’s important to take things slowly, ensure you have the proper form, and talk to a doctor if you’re unsure whether an exercise is right for you.

Fun retirement ideas that help your tax bill

If you’re looking for a way to save on taxes and are not so much into fitness, no biggie. There are plenty of fun activities to do in retirement with added tax benefits. Here are a few of our favorites:

• Volunteering. The Urban Institute reports that 60% of adults aged 55 and older volunteer. Certain volunteerism expenses, like meals, lodging, and gas, may be tax-deductible.
• Learning a new skill. Research shows education is strongly associated with health benefits. And if you’re interested in saving on tax, you can potentially do so through the lifetime learning credit.
• Picking up a hobby. Got a secret talent? Why not try it out with a hobby? Although hobby expenses aren’t tax-deductible, you won’t be subject to the self-employment tax, though you may still owe taxes on hobby income.

Whatever you choose to do in retirement, be sure it’s right for you. That can be trying a new activity while saving on tax, or reaping the health merits (and perhaps HSA benefits) by staying active. Either way, there are a plethora of ideas out there to help you get started.

And who knows? Maybe future changes on Capitol Hill will lead to an HSA-eligible gym membership, as initially proposed in the so-called “One Big Beautiful Bill.” We can dream, right?

Read More

• Three Creative Ways to Lower Your Retirement Taxes
• New HSA Contribution Limits Are Set: What to Know Now
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Hundreds of rural hospitals across the U.S. are bracing for potential service cuts or imminent closures due to President Donald Trump’s steep Medicaid cuts.

The Trump administration's so-called "One Big Beautiful Bill" (OBBB), signed into law on July 4, will slash Medicaid spending by an estimated $1.02 trillion to offset tax cuts. The expensive measure adds over $3 trillion to the national debt over the next decade.

Now, over 300 rural hospitals are bracing for immediate closure. That might include your local hospital.

Some experts predict that cuts to Medicaid will impact nearly every state, with most expected to see more than 25% of their hospitals shut down. In 11 states, the risk is even higher, with 50% or more of hospitals at risk.

That’s because rural hospitals often have lower financial reserves, meaning any reduction in revenue could lead to closures or force some to roll back essential services.

President Donald Trump’s tax overhaul legislation represents the largest federal rollback to Medicaid to date.

Here are three things you need to know about what Trump’s Medicaid cuts could mean for you in 2025.

1. Are hospitals closing due to Medicaid cuts?

Overall, more than 700 rural hospitals could close due to Medicaid cuts, which translates to one-third of all rural hospitals in the country. As noted, an estimated 300 are at immediate risk of shutting down.

The most at-risk hospitals are located in isolated rural communities, which would force residents to travel long distances for inpatient or emergency care.

These hospitals may also be reliant on Medicaid reimbursements, as studies show that adults and children in small towns and rural communities are more likely to have Medicaid or the Children’s Health Insurance Program (CHIP).

The top five states that could see the most closures are so-called "red states," led by Kansas.

• In Kansas, an estimated 66 rural hospitals could be on the chopping block, according to the Center for Healthcare Quality & Payment Reform, with 89 facing service cuts.
• Researchers project that 28 rural hospitals in Kansas are at immediate risk of closing due to Medicaid cuts.
• This would be followed by Oklahoma, Alabama, Texas, and Mississippi.
• As a snapshot, in Texas, as many as 108 (or 69%) of rural hospitals would face losses in services. An estimated 66 hospitals are at risk of closing, with 29 flagged under immediate risk.

2. Many rural hospitals rely on Medicaid

Rural hospitals face unique challenges with funding that are aggravated by insufficient health insurance reimbursements and unstable revenue streams from local taxes or government grants.

Many rural and frontier hospitals also face closure risks because private insurance plans pay them less than what it costs to deliver services to patients. These often offset hospital losses on services delivered to uninsured and Medicaid patients.

The major funding cut for Medicaid spending in the OBBB will be a significant loss for struggling facilities.

According to estimates from Manatt Health, rural hospitals stand to lose $70 billion over the next decade as a result of Trump’s tax cuts and spending legislation. Put it another way: Hospitals are projected to lose 21 cents from every Medicaid dollar received.

• In Kansas, where more than half of rural hospitals are at risk of closing, facilities will see an estimated 15% reduction in Medicaid reimbursement.
• Missouri, where one-third of rural hospitals could close, can expect a 29% reduction.
• In West Virginia, the reductions in Medicaid funding could translate to a 22% loss in reimbursement.

“Medicaid is a substantial source of federal funds in rural communities across the country,” said Alan Morgan, CEO of the National Rural Health Association (NRHA). “It’s very clear that Medicaid cuts will result in rural hospital closures, resulting in loss of access to care for those living in rural America.”

3. Rural hospitals closing: Trump’s stop-gap won’t last

The final version of Trump’s megabill includes $50 billion in relief funding over six-year period to keep rural hospitals and frontier hospitals afloat.

The financial cushion to be administered by a newly created Rural Health Transformation Program would still come up short to filling the $1.02 trillion budget gap in Medicaid spending, according to tax policy analysts.

According to the OBBB, the $50 billion in funds is to be delivered in two ways to rural health care facilities:

1. Half will be delivered to states that apply to the Rural Health Transformation Program, with a detailed "rural health transformation plan" explaining how rural hospitals will improve access to facilities, other health care providers, and services to their residents, among other strategies.

2. The other 50% of the funds will be distributed to states in a process yet to be determined.

3. The U.S. Treasury Department will provide an allotted amount of $10 billion per year to rural health care providers, starting on fiscal year 2026 through 2030.

4. These funds include rural hospitals, rural health clinics, community mental health centers, and federally qualified health centers.

5. States must apply no later than December 31, 2025, to be considered for the allotted funding.

As part of the detailed “rural health transformation plan,” rural hospitals that apply for funding must identify specific causes driving the accelerating rate of stand-alone rural hospitals becoming at risk of closure, conversion, or service reduction.

Medicaid cuts in the 'Big Beautiful Bill': What you can do to prepare

Approximately 60 million people in the U.S. rely on rural hospitals and health care facilities, according to the Bipartisan Policy Center, representing 20% of the population.

The Trump administration’s major budget rollback for Medicaid will inevitably be a source of financial strain for rural health care facilities that are already struggling. The Center for Healthcare Quality & Payment Reform, estimates that more than 700 rural hospitals could face closures due to the newly enacted tax policy.

As ruled by the OBBB, states can apply for allocated funding for rural hospitals and health care facilities via the Rural Health Transformation Program. State governments may also come up with different revenue sources to streamline funds to these essential providers.

These developments should happen in the upcoming months, so stay tuned to your local authorities and how they respond the new tax landscape.

Other 2025 Tax Changes

• What's Wrong With Trump's Pledge to End Taxes on SS Benefits?
• 2025 Tax Deduction Change for Those Over Age 65
• Social Security Email About Trump's Big Beautiful Bill Sparks Confusion

Congratulations, you've worked hard and are ready for a vacation. Some time away. Some R&R. Some phone-free time (though we know that never actually happens). Are any of your insurance policies — auto, homeowners, renters or health insurance — going along for the journey?

Here are three things to keep in mind about your insurance when you're traveling this summer in the U.S. (If you're leaving the country, check with your insurance agent or broker to find out if the level of coverage you have is sufficient or if you'd be better off with a supplemental insurance policy.)

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

No. 1: Rental cars

If you're fortunate enough to be flying somewhere and renting a car, then you're sure to be hit up with a plethora of options at the rental car counter, the good old upsells.

The rental car you managed to find was $40 a day, but you're going to get everything from liability insurance to physical damage insurance, even mechanical breakdown and towing coverage. Heck, you can even prepay for gas so you can return the car on empty.

So to buy or not to buy — that is the question. Some options are a matter of personal choice. If you want to prepay for gas, why not? It's convenient.

When it comes to liability and physical damage to the car, it will depend on the personal auto insurance policy that you already have.

Most policies will extend the same coverage you already have to a temporary replacement vehicle. Liability insurance is typically even more portable, so chances are you can skip paying extra for that if you already have it on your existing insurance policy.

Now, these days, there may be some extremely basic policies out there that specifically exclude rentals, so before making any final decisions, either check your policy language, or save some time and ask your insurance agent or broker if your coverage will extend to a rental car.

No. 2: Your luggage, your stuff

So many things can happen to your luggage — you forgot it in your Uber, the airline lost it or sent it to Budapest or, heck, maybe a hotel employee moonlights as a thief.

If you have a property insurance policy — let's narrow it down to a homeowners insurance policy, condominium owners policy or renters policy for the sake of discussion — then chances are excellent you will have some coverage accompanying you on your journey, with a few caveats.

First, your entire amount of personal property coverage will not go with you. See, the insurer will figure you're not taking everything you own on your trip, so 100% of your coverage won't go either. Typically, 10% of your personal property amount will be covered while you are away.

So, if you have $100,000 in personal property coverage, then while you're on the beach in Hawaii, you will have about $10,000 in coverage. Check your policy or with your agent or broker — there are nuances in this area, too.

No. 3: Medical issues

We're only human, and let's face it, stuff happens. You can get the flu just as likely while away as you can at home. Arguably, you are more exposed to bacteria and viruses while traveling than you are when working from home.

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So, yeah, it's the pits, but you may get sick and need a doctor. Or, and I hate to even put this out in the universe, you could get injured.

While the view from the top of that cliff looked magnificent, the jump into what appeared to be deep water may not have been. Even needing a simple prescription medication brings your health insurance into play.

While there is a great deal of nuance here, depending on your health insurer and the type of plan you have, most of them will have provisions for emergencies.

It wouldn't be a bad idea to have a peek at that policy as well so that you know whether to pay out of pocket or go through the process of providing your insurance information to the pharmacy, only to be told it is not in your network.

Work hard, play hard. Vacations are meant to be enjoyed, not dreaded, but — and I'm not trying to be a Debbie Downer — the truth is, I can personally attest to things happening when you're away from home.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Becoming eligible to sign up for Medicare when you turn 65 is a rite of passage in the American retirement. However, unlike applying for Social Security benefits, the process of signing up for Medicare is more rigid and has more rules and consequential deadlines. After all, Medicare requires you to pay premiums monthly, while Social Security pays a deposit to you each month.

Medicare plays a crucial role in covering the healthcare costs for the 70.0 million beneficiaries, of whom 90.7% are 65 and older, according to the Medicare Monthly Enrollment data for January 2026.

Misinformation about Medicare is all around, from social media posts to advice from well-meaning coworkers. This tendency, combined with Medicare's complex initial enrollment rules and the stress often associated with the years leading up to retirement, can lead to costly mistakes and unexpected expenses.

Don't believe these five Medicare myths listed below.

Myth #1- Medicare is free

Indeed, most people don’t pay a premium for Part A coverage, which is sometimes referred to as “premium-free Part A.” But that is the only part of Medicare that doesn't have a premium if you qualify.

Part A. You will not pay for Part A as long as you are 65 or older and you or your current or former spouse paid Medicare taxes while working for at least 10 years; otherwise, you will pay a premium for this coverage. In 2026, Medicare beneficiaries have a $1,736 Part A deductible.

Part B. Medicare Part B has a base monthly premium of $202.90 for most people. High earners pay an income-related monthly adjustment amount (IRMAA). For these beneficiaries, total Monthly Part B premiums, including the surcharge, will range from $284.10 to $689.90. These surcharges apply to enrollees in original Medicare and Medicare Advantage plans.

PART D. For the first 40 or so years of Medicare, there was no outpatient prescription drug coverage. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) added a voluntary prescription drug benefit, Medicare Part D.

If you have original Medicare and you want prescription drug coverage, you will need to enroll in a Part D plan. The majority of Medicare Advantage (MA) plans include Part D coverage, providing both medical and prescription drug benefits in one plan. However, if yours does not, you'll need to buy a stand-alone Part D policy.

A surcharge for high earners also applies to your Medicare drug coverage (Part D). In 2026, you’ll pay an extra amount in addition to your plan premium if your 2023 AGI is above $109,000 if you are single, or $218,000 if you’re married and file jointly. That surcharge ranges from $14.50 to $91.00.

Medicare Advantage premiums. Some MA plans charge an additional premium. Depending on the plan you choose, the monthly premium, in addition to Part B, will vary. The average monthly premium is $14.00 in 2026, down $2.40 from $16.40 in 2025.

Myth #2 You can enroll in Medicare at any point after you turn 65

The Initial Enrollment Period for Medicare (IEP) is a seven-month window around your 65th birthday, the three months before, the month of, and the three months after. Most people sign up for Medicare in this window.

It’s important to sign up for Medicare coverage during your IEP, unless you have other coverage. Failure to sign up during this time can result in gaps in your medical coverage and late enrollment penalties.

Medicare General Enrollment Period (GEP). If you missed your IEP, you can still enroll in original Medicare; you will pay late enrollment penalties that are based on how long you waited to file after you turned 65 or lost your employer-provided health insurance. This enrollment period runs from January 1 through March 31 each year.

Be aware that the General Enrollment Period only allows you to enroll in original Medicare. If you want to enroll in an MA plan, you’ll have to wait for the Annual Enrollment Period (AEP) that is discussed in more detail below.

If you first enroll in original Medicare during the GEP, you have a Special Enrollment Period (SEP) to join a Part D plan starting the date you submit your application for premium Part A or Part B coverage. The SEP lasts for the first two months of enrollment in premium Part A or Part B.

Part B late enrollment penalty. This penalty adds an extra 10% to your monthly premium for each year you could have signed up for Part B, but didn’t.

Part D late enrollment penalty. You’ll pay an extra 1% for each month, or 12% a year, if you either: don’t join a Medicare Part D drug plan when you first get Medicare, or go 63 days or more without creditable drug coverage.

However, you may be able to avoid penalties if you have insurance through your employer at 65 and enroll in Medicare as soon as you lose this coverage. Otherwise, the only way to avoid these penalties is to see if you qualify for a Special Enrollment Period (SEP).

Medicare Supplement (Medigap) Open Enrollment Period. While there is no penalty for not signing up for a Medigap policy during your IEP, you will lose out on enrolling without having to undergo underwriting. The underwriting process can result in higher premiums, as it takes into account your health and lifestyle.

Once you are enrolled in Medicare Parts A and B, you will also qualify for a 6-month open enrollment period for Medigap plans. This starts with your Part B effective date and is a one-time election period. You can enroll in any Medigap plan that you like, with no health questions asked.

What’s most important to know about this enrollment period is that it happens only once for most people. However, states can choose to establish Medigap protections that go further than the minimum federal standards. Check with your SHIP (State Health Insurance Assistance Program) to find out if your state gives you more rights and opportunities to buy Medigap policies outside of the six-month window without underwriting.

Myth #3- You will be automatically enrolled in Medicare when you turn 65

This myth has a kernel of truth to it. If you have already claimed Social Security benefits at least four months before becoming eligible for Medicare, you will be automatically enrolled in Parts A and B. If not, you'll be responsible for applying within the seven-month IEP or later if you have employer-provided health insurance.

If you don't apply within the required timeframe, you'll be subject to those steep late enrollment penalties mentioned above.

Myth #4- You can't change your Medicare plan after you sign up

If there is one thing you can be sure of, you will have the opportunity to change your plan every year. In some cases, you will have multiple chances to change your coverage both inside and outside of the enrollment periods that occur annually.

Annual Open Enrollment Period. This happens every year from October 15 to December 7. During this time, you can switch from your Original Medicare plan to a Medicare Advantage plan or vice versa. If you have a Medicare Advantage plan, you can switch to a different Medicare Advantage plan. And, you can also choose a new Part D plan. If you switch your plan during this window, your new coverage will take effect on January 1 of the following year. If you make no changes, your current selections will be automatically renewed.

The Medicare Advantage Open Enrollment Period. This enrollment period happens annually from January 1 through March 31. If you are enrolled in a Medicare Advantage plan and, for any reason, you don’t like it, you can disenroll from your current plan and either return to Original Medicare and elect a Part D drug plan or switch to a different MA plan.

Medicare Special Enrollment Period (SEP). A Special Enrollment Period (SEP) is a time outside of the regular enrollment periods during which Medicare beneficiaries have an opportunity to enroll in or make changes to their Medicare coverage. SEPs are available to individuals who experience certain qualifying life events or meet specific criteria. You can make changes to your Medicare Advantage or Part D prescription drug coverage when certain events happen in your life. Those events include moving or losing other insurance coverage, such as your or your spouse's employer-provided coverage.

Read Missed Medicare Open Enrollment? Here Are Your Options to get more details about what types of life events qualify for the Special Enrollment Period.

Myth #5- Medicare is the only health insurance policy you need in retirement

Original Medicare doesn’t cover everything. You will have copays, coinsurance and deductibles to pay in addition to your premiums. Part B pays for only 80% of doctors’ visits and other outpatient services. In addition, Medicare doesn’t cover supplemental services such as dental care, eye appointments, or hearing aids. You have two options to deal with your uncovered expenses. You can purchase Medigap insurance to complement your original Medicare insurance or enroll in a Medicare Advantage plan.

Read What’s the Best Medigap Plan? to find out more about the 10 different Medigap plans you can choose from.

Set your calendar, enrollment missteps can be expensive

Medicare plays an important part in covering most people's healthcare costs during their retirement. If you overlook your initial enrollment period, you will pay late enrollment penalties every month you pay your Medicare premiums.

You can also lose money on higher-than-necessary premiums or out-of-pocket costs if you are enrolled in a Medicare Advantage plan and don't shop around during your annual enrollment periods. While MA plans must cover everything traditional Medicare does, participants in MA plans are restricted to networks of providers and hospitals that can change every plan year.

For instance, you could be left paying out-of-network fees to see your preferred health care provider if they are no longer in your network.

Related Content

• 10 Medicare Changes to Watch in 2026
• Medicare Premiums 2026: IRMAA Brackets and Surcharges for Parts B and D
• What You Will Pay for Medicare in 2026
• The 7-Month Deadline That Determines Your Lifetime Medicare Premiums

Retirement planning has as much to do with amassing and spending your nest egg as it does with determining your health care needs.

Nobody wants to think about getting ill or injured when they get old, but it’s inevitable for many. How inevitable?

Roughly 70% of Americans age 65 and older will require long-term care at least once in their lifetimes, according to the U.S. Department of Health and Human Services. That encompasses everything from a nursing home to in-home care. The amount of care a person needs depends on their unique circumstances, but either way, it isn't cheap.

A semi-private room in a nursing home, on average, costs $9,581 per month, while a private room is $10,798 a month, according to Genworth’s 2025 Cost of Care survey. A home health aide will cost you $6,673 per month.

Even if you are in perfect health during retirement, it can be expensive. Fidelity Investments estimates that a 65-year-old retiring this year will spend $172,500 in health care. That’s up 4% from $165,000 in 2024.

In 2002, the first year Fidelity put out an annual estimate, the cost was $80,000. That doesn't account for any unforeseen illnesses or injuries that might require additional care.

“Health is wealth,” says Nilay Gandhi, a senior wealth adviser at Vanguard. “Without health, there’s not much anyone can do, regardless of how much wealth they have. Health care expenses are one piece of the puzzle for retirees and pre-retirees.”

1. Decide what kind of health care you want in retirement

To prepare for health costs, Gandhi encourages investors and their financial planners to follow a multistep process (PDF) that begins with determining the type of care you want and how much you can afford.

If you need round-the-clock assistance, do you prefer it at home or within a facility? If you get injured or ill, do you want insurance to cover the cost of care, or do you want to pay for it out of savings?

Once you decide on the type of care, create the necessary documents to ensure your wishes are met if you're ever incapacitated and can’t make your own decisions.

Some of those documents include a will, a financial power of attorney and an advance health care directive or living will.

After that, it's time to figure out how you’ll pay for it. You have options. Insurance is one; using your savings is another.

2. Know what Medicare does and doesn't cover

Any health planning for retirement should first factor in Medicare, which kicks in at age 65. Most retirees will have to choose between original Medicare or Medicare Advantage, which will have a direct impact on health expenditures.

Original Medicare tends to have what Vanguard says are substantial deductibles, as well as co-insurance. There is no limit on what out-of-pocket costs you might owe. Since Medicare doesn't cover dental, vision and hearing exams, you'll need a supplemental Medigap insurance plan.

A Medigap insurance plan is health insurance that private companies sell to help cover some of the costs that an original Medicare plan does not cover.

Another option is a Medicare Advantage Plan, which is sold by a select group of private insurers and replaces original Medicare coverage. These plans tend to have lower costs and more benefits, but the doctors within the network can be limited.

"If cost is the primary concern, Medicare Advantage will usually lead to lower health care costs over time (though it may be more expensive in specific years in which you experience poor health outcomes)," according to Vanguard. "Original Medicare with a supplement will tend to provide a more flexible choice of health providers and more predictable costs, regardless of your health status in any particular year."

3. Decide when insurance makes sense

Long-term care insurance is a popular choice because it makes it easy. You pay a monthly premium, and if you ever get sick, your insurance covers it. You get peace of mind, but there’s a catch.

Depending on your age and health, it can be pricey, ranging from $100 and up per month. The older you are, the higher the monthly premiums.

There are also limitations on what it covers. For it to kick in, you need to be considered chronically ill, unable to perform at least two activities of daily living (ADLs) without assistance or experiencing cognitive decline and requiring supervision.

Something to keep in mind: While prices are supposed to be the same over time, it's not uncommon for premiums to jump.

Long-term care insurance has its perks
There are tax benefits with LTC insurance. For one, the benefit payout amounts aren’t taxed. Some premiums are deductible as a medical expense if they contribute to medical expenses exceeding 7.5% of your adjusted gross income. As you get older, the deductible amount of the premiums increases.

You can purchase traditional LTC insurance or hybrid LTC insurance. With the latter, the LTC benefit is part of a life insurance policy or annuity. The benefit is always paid, and premiums are guaranteed. If the LTC insurance coverage is not used, it is transferred as a death benefit or cash value if it is an annuity.

It's also more expensive, easily over $1,000 per month, depending on the bells and whistles.

According to Vanguard, you would benefit from LTC insurance if:

• You can afford the premiums.
• Your family or trusted friends can handle the paperwork and claims process for you.
• You crave peace of mind that comes with insurance.
• You are healthy enough to meet underwriting guidelines.

4. Determine if sharing the costs is a better option than insurance

If you're healthy, your family history is void of any chronic or debilitating illnesses or diseases and you’ve saved for your retirement, long-term care insurance might not be the best option.

Alternatively, you can share in the costs beyond what Medicare covers out of pocket. There are a few ways to do that, including an annuity and a Health Savings Account.

With an annuity, you pay an upfront lump sum and, in return, get a lifetime of regular payments which you can use for medical expenses.

How much the annuity costs depends on your life expectancy, whether you have inflation protection, and whether there is a guaranteed minimum payment amount. You can purchase an annuity to begin paying out right away or defer payments for a future date.

Qualified longevity annuity contracts (QLACs) are annuities that are purchased with money from an IRA or 401(k). These vehicles lower your required minimum distribution balances, which can help defer taxes when you have to take RMDs.

5. Max out a Health Savings Account

Many people view a Health Savings Account, or HSA, as a means of saving for health care expenses in the present, rather than the future.

But an HSA can be a tax-advantaged way to save for future medical needs. With an HSA, the money you invest can roll over year after year. There is no use-it–or-lose-it rule attached to an HSA.

HSAs are triple tax-free. You get a deduction when you contribute, they grow tax-free, and you don’t pay taxes when you withdraw them for qualifying medical expenses.

There are limitations. For 2026, the limit is $4,400 for self-only coverage and $8,750 for family coverage. If you're 55 or older, you can contribute an additional $1,000. An HSA is only available with a high-deductible health plan.

“You can invest it and let it grow so you are prepared for your health care needs,” says Scott Cutler, CEO of HealthEquity.

Don’t wait until it's too late

Declining health might not be avoidable, but it doesn’t have to leave you destitute or a burden to your loved ones. A little planning now can go a long way later.

If insurance is the route you're going, the younger you are when you take out a policy, the cheaper it is. If you plan to use investment options or savings, the sooner you start planning, the better off you'll be.

“Everyone should have a health care plan regardless of age,” says Gandhi. “A long-term plan boils down to does somebody want to inherit that risk, want to share that risk or transfer the risk completely?”

Related content

• Don't Let Health Care Costs Wreck Your Retirement: Here's How
• Average Cost of Health Care by Age
• How to Pay for Long-Term Care
• We're Retired With $4.6 Million. My Wife Chose Our Medicare Advantage Plan for the $0 Premium, But I Want Original Medicare’s Freedom. Is It Too Late?

The health premium tax credit (PTC) is almost 13 years old. Thanks to Obamacare, eligible individuals who otherwise can’t get affordable coverage through their employers can purchase coverage from the marketplace and qualify for the PTC to reduce their monthly premiums. People who can get affordable health coverage through their employers don't qualify for the PTC, nor do individuals who are eligible for Medicare, Tricare, Medicaid or other federal health insurance programs.

Temporary PTC easings are ending

Prior to 2021, the PTC was available only to people with modified adjusted gross incomes (AGI) ranging from 100% to 400% of the federal poverty guidelines, who bought insurance through the marketplace, such as on healthcare.gov, and who met certain other rules. Modified AGI for this purpose is your AGI plus tax-free interest, nontaxable Social Security benefits and tax-exempt foreign earned income.

During the height of the COVID-19 pandemic, federal lawmakers enhanced the PTC for 2021 and 2022, letting more people qualify for the subsidy. Congress also increased the credit amount for many qualifying individuals. Lawmakers later renewed these enhancements, but made them temporary through 2025.

For 2025, individuals with modified AGI over 400% of the federal federal poverty level will qualify for the PTC to the extent that the cost of the benchmark silver plan on the marketplace exceeds 8.5% of their income.

However, beginning in 2026, the rules revert to those that were in place for pre-2021 years, so that only individuals with modified AGI between 100% and 400% of the poverty level will get PTCs. That means that fewer people will qualify for the PTC. Also, the credit amounts for most everyone else who would still qualify for PTCs will be much lower than before, meaning individuals would be paying higher premiums for health insurance.

This will begin to impact people seeking marketplace coverage for 2026 on healthcare.gov later this fall, unless Congress acts to extend the PTC easings. And the impact will continue to be felt for each year thereafter. Letting the PTC enhancements lapse could eventually lead to 3.7 million people losing heath insurance each years because they can't afford the monthly premiums. And this is a conservative figure.

Extending the PTC easings isn't a goal of President Trump or of most congressional Republicans. Even while GOP lawmakers in Washington, D.C., are hard at work on a tax deal to extend expiring provisions in the 2017 Tax Cuts and Jobs Act and to provide additional tax relief, there is silence on the PTC. The House-passed "One Big Beautiful" bill doesn't extend the easings. And though we expect that Senate Republicans will make some changes to the House package, adding PTC relief isn't in the forecast. It's possible that Congress could address PTC relief later on this year in a different tax bill, but that appears to be a longshot.

How does the premium tax credit work?

The PTC is estimated when you go on the marketplace to buy health insurance. The estimated credit for 2026 will be based on your expected 2026 income. To figure this out, you would begin with your 2024 modified AGI and add or substract any expected income changes that you anticipate having for 2026. The lower your modified AGI, the bigger the credit.

Most people who qualify for the PTC will generally elect to have it paid in advance directly to the health insurance company to lower their monthly health insurance premiums. If you opt for this, you must file a federal tax return, even though your income may be below the filing threshold or you expect a refund. You would use IRS Form 8962 to compute the PTC amount, list any advance payments made to the insurer (which you would find on the Form 1095-A that you receive from the health insurance marketplace), and reconcile the two figures. If your PTC exceeds the advance payments, then you can claim the excess PTC on your Form 1040. If the PTC is less than the advances, most people would need to repay part or all of the excess.

Beware of an IRS audit red flag

Erroneous reporting of the PTC on your Form 1040 is an easy red flag for the IRS. Its computers flag filed tax returns showing modified AGIs that exceed the limit to take the PTC. Also, the IRS receives Form 1095-A from the health insurance marketplace that shows which taxpayers have selected to have their PTC paid in advance to reduce monthly premiums, and the amounts of those advance payments. So before you file your Form 1040, double-check that you qualify for the PTC and that you accurately report it.

Also, if you are currently enrolled in marketplace coverage, let the marketplace know of any changes that could affect your 2025 PTC amount. For example, if your lost your job and report lower income, the marketplace will increase the subsidy amount for future months, thus putting more money into your pocket. The exchange will also decrease the subsidy if you report higher income, for example, maybe you sold investment property or you found a new job. Notifying the marketplace now can mitigate surprises when you file your Form 1040 next year.

Related Content

• What Are Your Chances of an IRS Audit? 18 Audit Red Flags
• Trump's ‘One Big, Beautiful Bill’ With Trillions in Tax Cuts: Passes House
• Four Changes to Medicare in the One Big Beautiful Bill Act

The House version of the One Big Beautiful Bill Act (OBBB) was set to make Health Savings accounts (HSAs) more accessible and useful to those aged 55 and over, such as allowing those still employed and enrolled in Medicare Part A to continue to make contributions to their HSAs. However, that provision and most other changes that benefited retirees were left out of both the Senate and the final version of the OBBBA.

HSAs can help you build a nest egg to pay for medical expenses in retirement, including Medicare premiums and co-payments. However, the prevailing rules prohibit participation after you enroll in Medicare and are confusing for those who have an HSA while they are preparing to retire.

There is one provision that might be helpful to those who use the Affordable Care Act marketplace to buy healthcare while waiting for their Medicare eligibility to kick in at 65. More about that opportunity is below.

Present HSA rules limit contributions when close to retirement

Currently, HSA contributions, including those made by an employer, are prohibited when you are covered by "disallowed" insurance plans, including Medicare Part A. Workers can still enroll in HSA-eligible workplace plans and use funds already in their HSAs for eligible expenses; they just can’t make any additional contributions once they are enrolled in Medicare.

Then, you face the tricky period when you have an HSA and are preparing to enroll in Medicare. There is a six-month lookback period, during which your Medicare Part A coverage is back-dated six months, starting no earlier than the first month of Medicare eligibility, the month of reaching age 65.

A best practice for workers is to stop contributing to their HSA six months before the month they apply for Medicare to avoid penalties. Be aware that the month of your application is what is used to calculate the six-month lookback, not the month you wish the benefits to begin.

You must satisfy the following four requirements to be HSA-eligible in 2025:

• Be covered by a qualified high deductible health plan (HDHP)
• Have no other disqualifying health coverage
• Not be enrolled in any part of Medicare
• Not be able to be claimed as a dependent on someone else’s current-year tax return

The One Big Beautiful Bill did not include most of the provisions included in the House version that are detailed below.

Importance of repealing the Medicare Part A enrollment prohibition

Medicare eligibility kicks in at age 65. At that point, most people have to decide whether to enroll in Medicare Parts A and B or a Medicare Advantage plan. If you have credible coverage from an employer, you can delay enrollment without paying a late enrollment penalty when/if you enroll later. However, if you claimed your Social Security benefits before age 65, you have created a conflict if you enrolled in an HDHP plan through your employer.

If you are receiving Social Security benefits when you turn 65, you will be automatically enrolled in Medicare Part A and Part B. If you have credible employer coverage, you can waive Part B coverage penalty-free and use your Medicare Part A coverage as secondary coverage; you can't disenroll from Part A. If your employer-provided coverage is an HDHP, you'd be able to keep your coverage, but you will no longer be eligible to make or receive contributions to your HSA.

The only way to opt out of this would be to rescind your Social Security election within 12 months and pay back all benefits received to date. You may or may not be aware that you have the option to stop and restart your Social Security benefits. There are several reasons why you may want to revisit your decision to file for benefits; you'd also be able to increase your monthly benefit if you claimed your benefits before your full retirement age (FRA).

1. Proposed change: If the repeal is implemented, anyone with an HDHP plan can continue to make contributions after enrolling, voluntarily or automatically, in Medicare Part A. This also means that employees who have an HDHP plan can claim their Social Security benefits before age 65 without jeopardizing their HSA eligibility.

Status: Did not pass.

Changes to contribution limits and new spousal contribution and catch-up rules

There are more favorable provisions in the legislation that would raise the contribution limits for some workers and give married couples some flexibility when making catch-up contributions.

Contribution limits. In 2025, annual HSA contribution limits are $4,300 for self-only coverage and $8,550 for family coverage, and HSA contribution limits are indexed every year for inflation. Employees making under certain income thresholds would be allowed to save more.

2. Proposed change: Higher contribution limits based on income. The higher contribution limit would allow individuals who make less than $75,000 annually to contribute an additional $4,300 every year to their HSA. Families who make less than $150,000 may contribute an additional $8,550 each year to their account; the additional contribution limits would be indexed for inflation.

The additional amounts would be phased out for individuals making $100,000 annually and $200,000 for families.

Status: Did not pass.

Catch-up contributions. Now, if both spouses are HSA-eligible and age 55 or older, they must open separate HSA accounts to make their respective “catch-up” contributions of $500 or an extra $1,000 annually.

3. Proposed change: New rule would allow both spouses to consolidate their catch-up contributions and deposit them into one account. Both spouses still must be HSA-eligible.

Status: Did not pass.

Restrictions when one spouse has a Flexible Spending Account (FSA). An employee is not eligible for an HSA if their spouse is enrolled in an FSA.

4. Proposed change: This provision would allow an individual to be eligible for an HSA even if their spouse is enrolled in an FSA.

Status: Did not pass.

Allowing HSA account holders to use more healthcare services and providers

Current rule disallowing use of on-site employer health clinics. Employees who utilize discounted health care services at a clinic at their worksite can not contribute to an HSA. The IRS views such services as a significant medical benefit, therefore incompatible with HSAs.

Status: Did not pass.

5. Proposed change: Employees who make use of the discounted health care services at a health clinic at their worksite may still contribute to an HSA.

Status: Did not pass.

Current rule disallowing membership in a DPC. Currently, membership in a direct primary care (DPC) would disallow you from having an HSA. These plans are considered a "separate and additional form of health insurance coverage" that is incompatible with HSAs. A DPC practice typically charges a patient a flat monthly or annual fee in exchange for access to a range of primary care and medical administrative services.

6. Proposed change: The new law would allow individuals to maintain HSA eligibility if they have a direct primary care (DPC) membership of up to $150 per month.

The new law also allows HSA funds to pay for DPC services. However, HSA distributions for DPC services cannot exceed $150 per month for individuals or $300 per month for family arrangements. These amounts would be adjusted annually for inflation.

Status: Passed! If you have an HDHP and contribute to an HSA, you can now make use of direct primary care memberships to get your care, use funds to pay the monthly fee, and maintain your eligibility to contribute to an HSA.

New expenses are eligible for HSA reimbursement

The definition of eligible expenses has been expanded to cover certain fitness expenses and also would allow some expenses incurred before an HSA is established to be eligible for reimbursement.

Current rule: Sports and fitness expenses, such as fitness facility membership fees, are not treated as HSA-qualified medical expenses.

Status: Did not pass.

7. Proposed change allowing certain fitness expenses: This provision would expand the definition of qualified medical expenses for HSAs to allow workers to use their HSAs for physical fitness memberships and instructional physical activity.

Individuals would be allowed up to $500 per year, and families would have a limit of $1,000 per year, with up to one-twelfth of such expenses allowed per month.

Status: Did not pass.

Current limit on eligible expenses: HSA funds can only be used for qualified medical expenses (QME) after the HSA is established.

8. Proposed change: The new definition would allow individuals to use HSA funds for medical services incurred within 60 days before the establishment of an account. These expenses would now be treated as eligible QME.

Status: Did not pass.

HSAs can help pay your medical expenses in retirement

HSAs are getting more attention as Gen Xers move into pre-retirement and lack the employee benefits, such as pensions and employer-provided health care that previous generations took into retirement. The attention is well-deserved, as an HSA can be a powerful wealth-building tool; think of it as a medical IRA. Why? Because the contributions are tax-advantaged and the distributions from an HSA are tax-free when used for qualified medical expenses.

After 65, the rules are even more generous. You can take distributions for any reason without paying a penalty. The 20% penalty for non-medical expenses imposed before age 65 goes away. If you use the money for something other than QMEs, you only pay income taxes.

Although most of the favorable changes for retirees proposed in the One Big Beautiful Bill did not come to fruition, there was one provision that might be helpful if you are using the Affordable Care Act marketplace to buy health insurance as you wait for your Medicare eligibility to begin. As of January 1, 2026, you can enroll in an HDHP Bronze plan or pick up a catastrophic plan and contribute to an HSA.

What hasn't changed is the cost of the legislation. The deficit spending caused by the bill could trigger mandatory cuts to Medicare, amounting to roughly $500 billion from 2026 to 2034.

If you'd like to know more about changes included in the legislation, read Four Proposed Changes to Medicare in the One Big Beautiful Bill Act — and What Ended Up in the Signed Bill.

Related Content

• Four Proposed Changes to Medicare in the One Big Beautiful Bill Act — and What Ended Up in the Signed Bill
• How Your HSA Can Reimburse You for Medicare Premiums and Expenses
• Non-Eligible HSA Expenses: When a Doctor’s Note Isn’t Enough

Depending on your health insurance policy, you may have noticed that you need to get permission from your insurer before it will pay for a medication, treatment or procedure your doctor prescribes — even if it’s covered by your plan.

This extra step, called prior authorization, is becoming more common with most types of health insurance, including Medicare Advantage, employer coverage and individual plans sold through HealthCare.gov or your state health insurance marketplace.

When your health plan requires prior authorization, your doctor must provide evidence that the specific care is medically necessary and is the best course of action in your situation.

Prior-authorization requirements have increased significantly over the past few years. For example, virtually all enrollees in Medicare Advantage plans are required to obtain prior authorization for some services, and these insurers made nearly 50 million prior-authorization determinations in 2023, up from 37 million in 2021, according to health policy research organization KFF.

Insurers don’t always approve these requests. In 2023, for example, Medicare Advantage insurers fully or partially denied 3.2 million prior-authorization requests, according to KFF.

Insurers say that prior authorization provides a vital screen to ensure patients receive safe, evidence-based care and to reduce low-value and inappropriate services so that coverage is as affordable as possible.

'An overused process'

The American Medical Association, however, calls prior authorization “an overused process that interferes with patients receiving timely care, or even any care at all.”

More than one in four physicians report that delays or denials related to prior authorization have led to a serious adverse event, such as hospitalization, disability or even death for a patient in their care.

And prior authorization isn’t the only obstacle you may encounter. You may face a denial of your claim after you receive a procedure or treatment if the insurer decides that your coverage doesn’t include it, or you didn’t get the necessary prior authorization first.

Insurers of health plans sold on HealthCare.gov denied 19% of in-network claims and 37% of out-of-network claims in 2023, according to KFF.

But you don’t have to take no for an answer, and perseverance often pays off. Less than 12% of Medicare Advantage prior-authorization denials were appealed in 2023, but more than 81% of the appealed denials were partially or fully overturned, KFF found.

Only 1% of the in-network denials were appealed for the policies sold on HealthCare.gov, but 44% of the denials were overturned at the first level of appeal, KFF found.

You may also be able to successfully appeal denials from employer health insurance plans or traditional Medicare — whether for prior authorization or for a service you already received — although few people know their appeal rights.

“Never accept the first denial letter you get, because it is often just the default reaction to treatment protocols, especially if it’s something new,” says Suzanne Garner, 47, of San Diego, who was first diagnosed with breast cancer seven years ago.

“It doesn’t matter if the treatment is fully FDA-approved and, in the case of oncology care, even if the National Cancer Coalition and ASCO [the American Society of Clinical Oncology] have endorsed it to be a piece of standard of care,” she says. “If it’s new, for a while, it’s likely to be denied.”

By appealing, Garner has successfully reversed more than 20 prior-authorization denials and five denials for claims after receiving a bill.

“At the beginning, I was very intimidated when I would get these denials and big cost estimates, and I remember crying and saying to my husband that we would have to go into our daughter’s college fund or our retirement fund,” Garner says. “For the most part, we figured it out, but it took being brave, advocating for myself and waiting on hold a lot. Don’t be afraid to appeal, and don’t be afraid to ask a lot of questions.”

Here’s what you need to know to appeal a health insurance denial, whether it involves a prior authorization request or a big bill following a procedure or treatment that you believe your insurance should cover.

Help from your doctor

The procedure for appealing a denial varies depending on the type of health insurance.

“You have to follow the time line and the instructions on the explanation of benefits or the Medicare summary notice,” says Tatiana Fassieux, education and training specialist for California Health Advocates. She helps people with all levels of appeals through HICAP, the state’s health insurance assistance program.

Whatever the appeals process, you should contact your doctor’s office right away after you receive a denial.

“There’s a certain amount of time to appeal — sometimes it’s 30 to 60 days, depending on the insurance. But we might not be alerted to that denial until 21 days have passed, and sometimes it’s a fight against time,” says Michelle Vanderwaall, who spent more than 20 years as an operations manager for several surgical specialties in a San Diego hospital system.

Your doctor’s office can help you determine how urgently you need care. When you’re diagnosed with a major disease, you might feel as though you have to rush to get treatment, with no time for appeals, Garner says.

“Oftentimes, when you’re told you have cancer, it feels like a medical emergency. But you may have weeks or a month or two where you can take a breath and make sure everything is lined up before you have that surgery or scan or treatment.”

Plus, your medical team may regularly deal with appeals, developing expertise in navigating them. The staff at the office of Garner’s oncologist were instrumental in overturning denials for PET scans, breast MRIs, an oophorectomy (ovary removal surgery) and other procedures.

“My oncologist and her team have gone to bat for me. I’ve had so many scans denied,” she says. “I had a number of PET scans because I also have an autoimmune disease that will show up on these imaging studies.”

The insurer initially denied the requests for PET scans and wanted her to have CT scans instead. Several of the denials were reversed after her oncologist got on the phone with a doctor at the insurance company and explained her specific needs, a step called a peer-to-peer review.

Bruce A. Brod, a physician and clinical professor of dermatology at the University of Pennsylvania Perelman School of Medicine, says that he sometimes can get a denial reversed through a peer-to-peer review.

But the conversation isn’t necessarily with other dermatologists, so he may need to take extra time to explain the patient’s needs. “Oftentimes, I’m talking with a nurse practitioner who was involved in primary care, or a primary-care physician. Or sometimes I talk to an OB/GYN or internist who works for the insurance companies,” says Brod.

Another reason to contact your doctor’s office after a denial: It may be a simple mistake.

Garner received a bill for the full cost of a re-excision surgery for her lumpectomy. “When I got the notice, it looked as though insurance covered $0, and I didn’t understand,” she says. “I was stressed out about it, and I brought all the paperwork to my next visit and had my team look at it.”

They discovered that the wrong number/letter combination had been typed in for the surgical code. After they submitted the claim with the correct code, the insurance company covered it.

Other sources of assistance

Some doctor’s offices are more helpful with appeals than others, and you may need to advocate for yourself. But that can be difficult to do when you’re learning new medical terminology while dealing with a major diagnosis.

“I’m aggressive and pretty educated in my diagnosis,” says Garner. “When you get a cancer diagnosis, you have to learn a new language, and it’s super overwhelming.”

Garner learned a lot from other cancer survivors in support groups, and she shares the knowledge she has collected, too.

For example, she helped a neighbor who was diagnosed with breast cancer get 14 months of coverage for an infusion her oncologist recommended. The insurance company wanted to pay for only eight months, citing an older study that suggested eight months of treatment could be just as effective as 14 months.

Garner used Outcomes4Me, a cancer-support app that aggregates medical research for patients based on their specific diagnosis (Garner now works for Outcomes4Me), and they looked through PubMed (a resource of medical literature from the National Institutes of Health) and Google Scholar to find newer studies.

“We were able to pull together a compelling case with numerous studies that showed it was more effective to have the full 14 months,” she says.

You may get help from a nurse navigator or a social worker at the hospital or your doctor’s office. Additionally, nonprofits and advocacy groups specializing in your disease may provide resources and help with claims.

Cancer-focused groups include the American Cancer Society, the Susan. G. Komen Foundation, which focuses on breast cancer, and Triage Cancer, a national nonprofit that provides education on the legal issues after a cancer diagnosis.

Among other disease-specific organizations are the American Diabetes Association, the American Kidney Fund and the National Kidney Foundation.

The Patient Advocate Foundation and Triage Health help people with a variety of serious conditions navigate insurance and financial issues.

“I think one of the major challenges is that there is an overarching lack of awareness about the appeals process,” says Monica Bryant, a cancer-rights attorney and chief operating officer for Triage Cancer.

“This is a lot to put on the shoulders of someone who already has a too-full plate. However, when we’re talking about access to care issues and how to avoid financial hardship after a cancer diagnosis, the appeals process is an incredibly important tool.”

Bryant has helped reverse denials in a variety of situations. She has been able to get coverage for oral chemotherapy when the insurer wanted to cover only IV chemo, or for cancer screenings outside of the usual guidelines — for example, for a person younger than the standard age who needed the screening for a medical reason.

She has also helped get coverage for off-label drugs prescribed by the doctor. “The science moves faster than insurance companies and the law, and the science might indicate that a drug that is approved for one type of cancer is really effective in treating another type and is being prescribed off-label,” she says.

She helps gather the evidence to build the patient’s case, which can include medical records, test results, literature, clinical trial results, a personal narrative or a letter from the doctor, she says.

Prior authorization is much less common for original Medicare than it is for Medicare Advantage plans, but you can get help navigating the appeals process for either type of coverage from your State Health Insurance Assistance Program, the Center for Medicare Advocacy and the Medicare Rights Center.

Your insurance broker may also be able to assist, says Craig Wilcox, a Medicare insurance broker in Northern Nevada.

Next levels of appeal

If the first stage of your appeal is unsuccessful, you can request an external appeal, in which someone from outside the insurance company reviews the evidence.

“We gather all the medical records, and we make sure it’s a complete story and time line of what happened,” says Christine Huberty, an attorney with the Center for Medicare Advocacy.

If that appeal is denied, the next steps vary depending on the type of insurance. For Medicare Advantage plans, you can request a hearing with an administrative law judge. (The case must meet a minimum dollar amount of $190 to be eligible in 2025.) “You don’t need an attorney, but people assume you do,” says Huberty.

She has assisted several people in getting denials overturned at this third level, especially for rehabilitation in a skilled nursing facility.

For example, your doctor may say you need six to eight weeks of rehabilitation after a stroke, but after two weeks of rehab, you get a surprise denial for further care, she says. “The people who fight the denial often get it overturned, but they may have to do it five or six times over the course of their treatment.”

Huberty recently helped Rosemary Perry and Lisa Strelecky with a claim involving their mother’s skilled nursing facility in Hartford, Conn.

Their mother had a severe laceration on her leg from a chair lift footrest and needed 21 stitches. Three days later, she fell on the stairs in her garage and couldn’t walk. After four days in the hospital, she was transferred to a skilled nursing facility for rehab.

“I thought she was going to be there for six to eight weeks to do the physical therapy and get this wound under control,” says Strelecky, who is a neonatal nurse. But nine days after she was admitted, she received a notice that the insurance was going to stop paying for the care.

The sisters called the insurance company to appeal and let them know their mother needed daily nurse care, complicated wound care and physical therapy. The coverage was extended.

Then, six days later, the insurer said the coverage was going to end again. They appealed and got coverage extended for four more days. After that, their appeal was denied.

They wrote a letter explaining that she continued to need physical therapy and nursing care, but the insurer also denied the next level of appeal. Keeping their mother at the facility cost $700 daily without insurance coverage.

They were billed the full cost for a week before moving her to another facility, and she passed away the same day she was transferred.

Shortly after the funeral, Perry and Strelecky contacted the Center for Medicare Advocacy and connected with Huberty, who agreed to accept the case. She gathered the evidence explaining why their mother continued to need skilled nursing facility care during that time and sent it to the insurance company and the administrative law judge.

The day they were scheduled to have a hearing before the administrative law judge, the insurer agreed to pay out for the week of care that was unpaid, which Huberty says is common.

“Had I known that Christine’s department existed, would she have been able to help us sooner?” asks Strelecky. “That would have been amazing.”

Tips for getting out-of-network coverage

The plot of the hit TV show Breaking Bad revolves around Walter White’s scheme for earning money to pay for his out-of-network lung cancer treatments. But rather than cooking meth for the cash, you may be able to get an insurer to cover out-of-network care if you can build a strong enough case that your policy doesn’t include an in-network specialist who provides the specialized care.

“There are network exceptions, and if a patient can show that seeing a provider is medically necessary, that would be a reason to appeal,” says Bryant of Triage Cancer.

In breast reconstruction after a mastectomy, she sees this happen frequently for those who want a procedure known as a DIEP flap reconstruction but have no access to in-network plastic surgeons who perform it. But the exceptions can vary a lot by insurer, she says.

Sometimes your doctor’s office will do the legwork.

Michelle Vanderwaall frequently needed to get out-of-network coverage for patients when she managed an ENT (ear, nose and throat) office. Before ear surgery, for example, sometimes patients have to get a special hearing test with an audiologist, and there may be no in-network specialists who do it, she says.

She would get the names of audiologists in the plan’s network and ask each one whether they could do the test. When she had exhausted all the options, the insurer would usually cover the out-of-network audiologist.

Get a reference number or written letter from the insurance company verifying the extra coverage, she says.

If you’d like to use a doctor who isn’t covered by your plan, you could also switch plans during open enrollment, which is usually in the fall for employer plans, individual plans sold through HealthCare.gov or your state health insurance marketplace, and Medicare Advantage plans (original Medicare lets you see any doctor who participates in the Medicare program).

Even if the doctor you prefer isn’t in a plan’s network, you could get some extra coverage by switching from a health maintenance organization (HMO) to a preferred provider organization (PPO). PPOs usually cover out-of-network providers, but you may need to pay a higher deductible and co-payments than for in-network care.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Did you have “global pandemic” on your bingo card of possible retirement risks? The reality is that risks abound, and you can’t always see them coming.

Still, a proactive stance can help you get through them — and thrive.

Here are the top risks retirees need to be aware of and how to guard against them.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

1. Outliving your savings

Americans are living longer than ever. While most would welcome increased longevity, it also means you’ll need money to fund additional years of retirement. What can you do to ensure your savings last?

• Work longer. Working just a few years longer can help you save more money, while also delaying your need to tap your nest egg.
• Part-time work. Instead of leaving work behind completely, consider taking a part-time job to bring in some income so your money can continue to grow.
• Delay Social Security. If your health is good and you have other income sources now, you can get a significantly bigger paycheck by waiting on Social Security.
• Consider an annuity. A lifetime income annuity provides you with a guaranteed source of income you can’t outlive.

2. Encountering sequence of returns risk

Your chances of running out of money are much less if you retire during a booming market and your portfolio is up. But what happens if you retire during a market decline? It’s a little-known phenomenon known as sequence of returns risk.

Making withdrawals from your portfolio when it’s down forces you to sell more investments to come up with the amount you need. Not only does that drain your portfolio faster, but it leaves you with fewer assets with which to participate in an eventual rebound.

A wealth adviser can work with you in the years leading up to retirement to create a pool of money for your immediate cash needs so you won’t need to make withdrawals if the market is down.

The chart below illustrates what can happen to a hypothetical portfolio based on different returns at different points in time.

3. Rising health and medical expenses

Health care is one of the biggest retirement expenses, but many people overlook it when planning for retirement.

Health care costs are expected to rise about 7.5% in 2025, a near-record trend that is driven by inflationary pressure, prescription drug spending and behavioral health utilization.

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To ensure that health care costs don’t overwhelm your retirement, pay attention to these things:

• Health savings accounts (HSAs). You can build up an account for health-related expenses by saving in tax-advantaged HSAs in the years before retirement.
• Health insurance. If you retire before age 65, you’ll need to line up health insurance coverage. Some options to consider: COBRA through your previous employer, a health exchange plan or a high-deductible plan paired with an HSA.
• Medicare. Medicare won’t cover all your health care expenses in retirement. In addition to Medicare, which covers some doctors’ visits and hospital stays, you’ll want to purchase supplemental plans to pay for out-of-pocket costs.
• Long-term care insurance. The possibility of needing long-term care is higher than you might think. Long-term care insurance can pay for care when you’re no longer able to care for yourself. The earlier you buy it, the more affordable the premiums will be.

4. Letting inflation erode your purchasing power

It may seem harmless in small doses, but over time, inflation can erode your purchasing power. Think of it as a silent thief stealing the value of your money. While Social Security has automatic cost-of-living adjustments each year, it’s up to you to make sure the rest of your money keeps up with inflation. These strategies might help:

• Invest for growth. Over time, stocks have shown the ability to outpace inflation. Even in retirement, it’s important to keep some of your portfolio invested in stocks.
• Inflation-proof your investments. Consider inflation in the context of your investment selection and work with your financial adviser to adjust based on your situation.
• Explore annuities. Some annuities come with payments that increase with inflation, providing a steady income stream that retains its purchasing power over time.

Retirement is an exciting chapter in life, offering countless opportunities for personal fulfillment and quality time with loved ones.

However, concerns about financial security can create anxiety and keep you up at night.

The good news is that with a little bit of planning, you can pave the way for a smooth transition into retirement.

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• Phased Retirement: Why Easing Into Retirement Might Be Your Best Move
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• Three Essential Estate Planning Steps to Protect Your Nest Egg

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

If you have a Health Savings Account (HSA) or are thinking about one, the IRS has announced the new contribution limits for 2026. These annual inflation adjustments are designed to keep pace with rising costs.

However, it's worth noting that HSAs might not be right for everyone.

So, as you plan your finances for next year, it’s good to know the new limits and the pros and cons of an HSA. Let's dive in.

2026 HSA and HDHP limits: What’s new?

For 2026, the IRS has set the following annual HSA contribution limits:

• Individual (self-only) coverage: $4,400 (up from $4,300 in 2025)
• Family coverage: $8,750 (up from $8,550 in 2025)
• Catch-up for age 55+: $1,000 (unchanged)

Remember: To qualify for an HSA, you must be enrolled in a high-deductible health plan (HDHP).

The IRS also adjusted the minimum deductible and maximum out-of-pocket amounts for HDHPs for 2026:

• Minimum deductible: $1,700 for individuals, $3,400 for families
• Maximum out-of-pocket: $8,500 for individuals, $17,000 for families

Key benefits of an HSA

HSAs are popular for their triple tax benefits. Basically, contributions are made pre-tax, the money grows tax-free, and withdrawals for qualified medical expenses are also tax-free.

Unlike flexible spending accounts (FSAs), HSA balances roll over from year to year and can be invested, allowing funds to grow for future needs. You own your HSA and keep it and the funds in it when you leave your job.

After age 65, you can use HSA funds for non-medical expenses without penalty (though you’ll pay regular income tax on those withdrawals).

Is there a downside to an HSA?

However, HSAs are not without their downsides. The most significant is the requirement to enroll in a high-deductible health plan. While those plans often have lower monthly premiums, they come with higher upfront costs if you need care.

For instance, next year (2026), you’ll need to pay at least $1,700 out of pocket before your insurance starts to pay for most services, or $3,400 for a family. (In many cases, the deductible limits are much higher than those minimums.)

Those out-of-pocket costs can be a significant financial strain for people with ongoing health needs or limited savings. Some people might even delay necessary care due to concern about upfront costs.

There are also strict rules about how HSA funds can be used.

• If you spend HSA money on anything other than qualified medical expenses before age 65, you’ll face income tax and a 20% penalty on the amount withdrawn.
• That's a steeper penalty than what applies to early withdrawals from many retirement accounts.
• Over-contributing to your HSA can also result in tax penalties.

Managing an HSA requires record-keeping. You should keep receipts and documentation to show that withdrawals were for eligible expenses. You could owe taxes and penalties if the IRS audits you and cannot provide proof.

Eligibility is another limitation. You can’t contribute to an HSA if you’re enrolled in Medicare or are claimed as someone else’s dependent. You also can’t have a general-purpose FSA at the same time as an HSA.

Finally, the full benefits of an HSA are only realized by those who can afford to contribute and invest consistently. Setting aside enough to take advantage of long-term tax savings may be challenging for people living paycheck to paycheck.

HSA tax planning for 2026: Bottom line

As you review your options for the coming year, weigh the practical considerations involved with HSAs.

The new limits for 2026 offer more opportunity to save, but only if the structure of an HDHP and HSA rules fit your health and financial situation.

Consult a trusted and qualified financial planner or tax professional if you're unsure.

Read More

• Tax Benefits and Hidden Costs of HSAs
• 401(k) and IRA Contribution Limits for 2025
• Types of Income the IRS Doesn't Tax
• 2026 IRA and 401(k) Contributions Are Set: What to Know Now

A health savings account is a remarkable tool to help pay for out-of-pocket medical expenses.

HSAs offer a triple tax advantage: Contributions are tax-deductible (up to $4,300 for self-only coverage and $8,550 for family coverage in 2025, plus an extra $1,000 if you’re 55 or older), growth from the account’s investments is tax-deferred, and withdrawals are tax-free for eligible expenses.

You must have a qualifying high-deductible health insurance plan to fund an HSA.

HSA reimbursement options

You can use HSA money for out-of-pocket expenses, including insurance deductibles and co-payments, as well as items ranging from pain-relief medication to bandages to hearing-aid batteries.

The Health Equity website has a list of qualifying expenses. If you make a non-qualified withdrawal, you’ll owe income tax on it, plus a 20% penalty if you’re younger than 65. After you turn 65, you’ll owe income tax but no penalty.

Unlike flexible spending accounts, HSAs don’t impose a deadline by which you must use the funds, and you can get reimbursement for qualifying medical expenses at any time.

For example, you could claim HSA funds years from now for a medication you buy today, as long as you owned the HSA when you made the purchase.

The ability to hold on to HSA funds over the long term is valuable.

If you can afford to avoid tapping your HSA during your working years, the account may grow significantly from your contributions and investment earnings; HSAs typically allow you to invest in stocks, mutual funds and other securities. In retirement, you can use HSA money to pay for qualifying medical expenses, including premiums for Medicare Part B and Part D and Medicare Advantage.

When you’re ready to claim HSA money, you may be able to go to your provider’s web portal and transfer funds to your checking or savings account. In addition, some HSA providers allow you write yourself a check from your account.

If your HSA comes with a debit card, you can use it to make eligible purchases directly — for example, at pharmacies or doctors’ offices.

And depending on your HSA provider, you may be able to withdraw funds from an ATM to reimburse yourself for out-of-pocket medical expenses.

Tracking HSA paperwork

Even if your HSA administrator doesn’t require you to submit receipts for reimbursement, it’s a good idea to hang on to them, says Michael Eldredge, product manager for HSA provider Inspira Financial.

You’ll need them for your tax records in the event you’re audited. If your doctor provided letters of medical necessity for certain purchases, save the letters in case your HSA provider or the IRS requests proof that the HSA expenses were eligible, says Itamar Romanini, vice president and general manager of online retailer HSA Store.

By hanging on to payment records, you can keep track of any expenses that you don’t claim right away, too. File receipts and explanations of benefits in a safe place at home, or save them digitally.

HSA Store’s free ExpenseTracker Mobile App lets you store and upload images of receipts. With TrackHSA ($1 a month after a 30-day free trial), you can upload receipts and organize expenses by year so that you can easily find them later.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Read More About HSAs

• The Wealth-Building Powers of Health Savings Accounts
• Three 'Hidden Costs' of Health Savings Accounts
• 10 Things You Need to Know About Health Savings Accounts

Retirement: It's that time when you should be able to kick back, relax and finally enjoy the fruits of your hard work. But let's be honest — one of the biggest worries retirees face is the rising cost of health care. Medical expenses aren’t slowing down, and if you’re not prepared, they can hit you like a ton of bricks.

Take David and Linda, for example. They're a couple in their early 60s who worked hard and saved well. They felt confident about their retirement plan — until health care costs started to feel like a dark cloud hanging over their heads. Sure, they knew Medicare would help, but what about all those gaps and extra costs no one really talks about?

The truth is, health care costs can sneak up on you. According to Fidelity Investments, a 65-year-old couple retiring today can expect to spend over $300,000 on their combined health care throughout retirement — and that doesn’t even include long-term care.

When David and Linda heard that number, they knew they had to get serious about planning.

They started by taking a closer look at their health. David had a history of high blood pressure, and Linda had been managing type 2 diabetes for years. On top of that, their family medical histories revealed more risks — heart disease for David and arthritis for Linda.

Recognizing these potential concerns gave them some clarity. If they wanted to protect their financial future, they needed to prepare for medical costs beyond the basics.

Looking at Medicare

Medicare seemed like the next big puzzle to solve. David dove into the research and quickly realized there was more to it than he expected.

Medicare Part A would cover hospital stays, while Part B handled outpatient services and preventive care. Part D was crucial, too, helping to manage the cost of prescription drugs.

But the gaps — those hidden expenses that Medicare doesn’t cover — were still concerning. After weighing their options, David and Linda chose a Medigap policy to help fill those gaps. It wasn’t the easiest decision, but knowing their out-of-pocket costs would be manageable helped give them peace of mind.

Even with that coverage, they knew surprises could still pop up. So, they decided to build a dedicated health care fund. Thankfully, they had been contributing to a health savings account (HSA) for years, giving them a nice tax-free pool of money to use for qualified medical expenses.

To stay ahead of inflation and rising health care costs, they shifted part of their investment portfolio toward growth-oriented assets as well.

One concern that kept nagging at them was the cost of long-term care. A close family friend had recently faced staggering nursing home expenses, and David and Linda didn’t want to end up in the same situation.

After exploring their options, they chose a hybrid life insurance policy with a long-term care rider. This gave them the reassurance that their savings wouldn’t be wiped out if they needed extended care.

Considering prescription drug costs

Prescription drug costs were another area they tackled. They learned that switching to generic medications whenever possible can save a bundle.

They also started using tools like GoodRx to compare prices and make sure they were getting the best deals.

To stay on top of things, they reviewed their Medicare Part D plan every year to ensure their medications were still covered in the most cost-effective way.

Beyond financial planning, David and Linda realized they needed to prioritize their health to avoid bigger medical costs later on. They committed to regular checkups, screenings and vaccinations to catch potential issues early.

They also made lifestyle changes — morning walks, healthier meals and more active social lives. Surprisingly, these changes didn’t just improve their health — they also deepened their connection with each other and their community.

Feeling more confident but still wanting to make sure everything was buttoned up, David and Linda met with their financial adviser. Together, they mapped out a tax-efficient withdrawal strategy, aligned their retirement income with projected health care costs and made smart decisions about when to take Social Security.

With those final pieces in place, they knew they were ready.

Planning pays off

In the end, their preparation paid off. David and Linda entered retirement with confidence instead of anxiety. With a solid plan in place to handle health care costs, they were free to focus on what truly mattered to them: spending time with their family, traveling and embracing the retirement they had always dreamed of.

Planning for health care in retirement may seem overwhelming, but taking the time to prepare can offer incredible peace of mind. By assessing your health care needs, maximizing your Medicare benefits and building a dedicated savings strategy, you can better ensure your retirement is both secure and enjoyable.

The key is to start early, stay informed and remain proactive in managing your health care expenses.

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.