How confident are you that your Medicare coverage is doing more than just protecting your health—could it also be shielding your savings and investments?
Many people approaching retirement look to Medicare as a safety net for medical expenses. And rightly so—healthcare costs can rise quickly with age, and Medicare provides essential coverage.
But here’s something that’s often overlooked: Medicare also plays a significant role in protecting your assets. The better you understand how Medicare works—and where it leaves gaps—the better equipped you’ll be to make smart decisions that protect your financial future.
How Medicare Helps Safeguard Your Finances
Medicare is a federal health insurance program primarily for people age 65 and older. It helps cover many healthcare-related costs that would otherwise fall on you—and your savings. Here’s a quick refresher on what Medicare includes:
Part A
Covers inpatient hospital care, skilled nursing facility stays, hospice, and some home health services—usually with no monthly premium.
Part B
Covers doctor visits, outpatient care, preventive services, and medical equipment, managing everyday healthcare costs.
Part C
(Medicare Advantage) offers an all-in-one plan through private insurers that includes Parts A and B, with benefits like dental, vision, and hearing.
Part D
Helps cover the cost of prescription drugs. It’s optional, offered by private insurers, and includes premiums, deductibles, and copays.
Without Medicare, a hospital stay or serious illness could quickly deplete retirement funds. Having this coverage in place means you’re less likely to tap into your savings or sell assets to pay for medical bills. That’s a major form of protection, especially for people living on fixed retirement incomes.
Still, Medicare doesn’t cover everything—and that’s where your asset protection plan needs to get a little more strategic.
Understanding the Gaps
While Medicare is comprehensive, it does come with out-of-pocket expenses like deductibles, copays, coinsurance, and premiums. For example:
There’s a hospital deductible under Part A, and daily coinsurance fees can add up for longer stays.
Part B typically covers 80% of approved medical services, leaving you responsible for the other 20%.
Part D includes a tiered system of deductibles and cost-sharing for prescriptions.
These expenses may seem manageable individually, but over time, they can eat into retirement savings. And if you face a major illness or require ongoing treatment, those costs could escalate.
The good news? There are ways to strengthen your coverage and help preserve your financial assets.
Four Smart Strategies for Medicare-Related Asset Protection
1) Add a Medigap (Medicare Supplement) Plan
Medigap plans are designed to fill the “gaps” in Original Medicare. Sold by private insurance companies, these policies can help pay for deductibles, copays, and coinsurance. Some plans even cover care received while traveling internationally. With a Medigap plan, you get peace of mind—and protection from surprise bills that could disrupt your savings and investment plan.
2) Consider a Medicare Advantage Plan
If you prefer all-in-one convenience, a Medicare Advantage (Part C) plan may be the way to go. These plans often include dental, vision, and hearing coverage, as well as prescription drugs—all bundled into one monthly premium. Depending on the plan, you may also benefit from lower out-of-pocket limits, which can help you better predict and manage healthcare expenses.
3) Purchase a Long-Term Care Insurance or Hybrid Policy
While Medicare doesn’t cover custodial care (such as assistance with bathing, dressing, or eating), long-term care insurance does. Some life insurance policies now offer long-term care riders or living benefits that let you access funds early if you need ongoing care. These policies help ensure that your retirement savings stay intact—even if your care needs increase later in life.
4) Use a Health Savings Account (HSA)—Before You Retire
If you’re still working and have a high-deductible health plan, you can contribute to an HSA. These accounts allow you to save pre-tax dollars that grow tax-free and can be withdrawn tax-free for qualified medical expenses.
Once you enroll in Medicare, you can’t contribute anymore—but the money in the account is yours to use. It’s a great tool for covering future medical costs without dipping into your nest egg.
The Role of Proactive Planning
It’s easy to assume Medicare will take care of everything, but a proactive approach to your coverage can go a long way. Reviewing your options annually, staying informed about plan changes, and working with a licensed agent who understands both Medicare and financial strategy can make a big difference.
Most importantly, Medicare shouldn’t be viewed as an isolated piece of your retirement puzzle—it should be integrated with your broader financial, estate, and insurance planning goals.
In other words, the right Medicare plan can help you stay healthy, and smart planning around it can help you stay financially secure.
