Once you hit retirement, you may stop working, but that doesn’t mean you stop needing health care. In fact, for many older adults, health care costs climb significantly in retirement.
Here, we’ll walk through the reasons for these increased costs and provide tips and strategies for lowering them as much as possible.
[READ: The True Cost of Aging: A 2026 Budget Comparison of Senior Living and Aging in Place Options]
Highest Costs to Expect in Retirement
As your health care needs grow over time, you’ll likely see a rise in health care costs. But understanding which expenses are likely to be highest can help you prepare to cover them.
It’s helpful to organize what we think of as health care expenses into different buckets, says Tyler End, CEO and cofounder of Retirable, a retirement advisory company based in New York City.
These buckets include:
— Health care insurance premiums
— In-home health care costs
— Assisted living or nursing home costs
— Dental and vision care costs
— Prescription drug costs
[READ: Senior Living Tax Breaks: How to Deduct Assisted Living, Memory Care and Other Senior Care Expenses]
Health care insurance premiums
At age 65, you’ll be eligible to get health insurance through Medicare, the federal program that covers older adults and some younger people with disabilities. If you retire prior to age 65 and no longer have health insurance through your job, you’ll need to find another means of health insurance coverage until you become eligible for Medicare.
One option is private health care coverage, which can be expensive. Also pricey is COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act. COBRA offers workers and their families continuing health insurance coverage for up to 18 months after employment ends. For more affordable options, consider looking into state exchanges created by the Affordable Care Act. To avoid financial surprises, don’t just pick the cheapest plan. Look into what a plan covers, how it works and what costs you may need to pay upfront.
No matter what kind of health insurance plan you have, you’ll pay a monthly premium as well as copayments for various services that can vary widely from one plan to the next. Some plans also have high deductibles, meaning that you must spend a certain dollar amount out of pocket before coverage kicks in.
In all cases, read the fine print on any policy you’re considering to be sure you understand your financial responsibilities.
[READ: The Cost of Waiting to Talk About Senior Care]
In-home health care costs
As your health status changes, you may need to hire a part- or full-time in-home caregiver to assist with the activities of daily living (ADLs). These services can get expensive quickly. End says they’re typically among the highest costs most people encounter toward the end of life.
According to CareScout’s 2025 Cost of Care Survey, a nonmedical caregiver costs $35 per hour on average, depending on where you’re located and the types of services being rendered. A private-duty nurse can cost $90 per hour. Those expenses can add up quickly.
[READ: Does Medicare Cover Home Health Care?]
Assisted living or nursing home costs
Assisted living community and nursing home costs can be very expensive. According to CareScout, the national average monthly cost for an assisted living facility is $6,200. For a nursing home, the national monthly average balloons to $9,581 for a semi-private room and $10,798 for a private room.
“Assisted living and long-term health care expenses are one of the biggest blind spots for consumers,” End says.
Many people expect Medicare to cover assisted living or other long-term care costs, but Medicare has specific limitations; it doesn’t, for instance, cover room and board at an assisted living facility. As a result, the price can exceed what most people can afford.
Dental and vision care costs
Dental and vision health are integral to overall health, and getting routine exams can help stave off larger problems. However, Medicare does not cover most dental and vision services, such as routine eye exams. So, if you wear glasses or have ongoing dental issues, it may make sense to purchase extra insurance to cover those costs. Some Medicare Advantage plans include dental and vision coverage.
Prescription drug costs
Medicare Part D covers prescription medications, but it typically only covers generic versions, and you may still be responsible for copayments depending on the medication. During the annual open enrollment period each year (October 15 to December 7), check the formulary, or list of medications that are covered, to ensure the plan you’re signing up for covers the medications you know you’re going to need. Keep in mind as well that because of the Inflation Reduction Act, out-of-pocket costs for Part D are capped $2,100 for 2026, and insulin costs are capped at $35.
How to Decrease Health Care Costs in Retirement
While some of the expenses associated with aging are inevitable, there are some steps you can take to help lower your expected health care expenditures later in life:
— Eating right and exercising more
— Staying on top of routine health care needs
— Selecting the right health insurance plan
— Getting professional help as needed
— Enrolling in an HSA plan
— Adding supplemental insurance
— Planning ahead
1. Eating right and exercising more
Eating a healthy, balanced diet and exercising more are two simple ways to help fend off some of the chronic diseases that are common later in life. The more you look after your overall health and wellness, the less likely you are to fall ill, and that means a lower cost to get well again.
2. Staying on top of routine health care needs
Keeping up with routine health care and the various health screenings your provider recommends may help you delay or avoid some of the most expensive health care needs that may arise later in life, says Tina R. Sadarangani, a board-certified primary care nurse practitioner and assistant professor at NYU who specializes in the care of older adults. It can also keep your quality of life higher now.
Sadarangani recommends that older adults get these health screenings annually or as recommended by a doctor:
— Regular blood pressure screenings to reduce risk of heart disease and stroke
— Routine blood tests to check cholesterol and blood glucose to monitor risk of heart attack, stroke and diabetes
— Cancer screenings, including routine colonoscopies, mammograms, dermatology skin checks and prostate cancer checks
— Regular vision and hearing tests to ensure safety and quality of life and to help prevent depression and social isolation
— Routine dental cleaning and exams to spot gum disease and tooth decay
— Frequent screenings for cognitive function changes that could be early signs of dementia
3. Selecting the right health insurance plan
During Medicare’s open enrollment period
each fall, it’s a good idea to compare your current plan with the other options available and consider switching your selections to cover any new or anticipated needs. Finding the plan that covers all your health needs can help you save a lot of money if you get sick or need additional care.
End urges you to “give careful consideration to which Medicare Plan is right for you based on your current medical conditions, prescriptions and preferred doctors.” That’s where the next tip comes in.
4. Getting professional help
Selecting the right Medicare plan for your needs can seem overwhelming, as there are so many options available and it can be difficult to understand all the nuances of how one plan compares to another. But the good news is, help is available.
One of the best free resources is your State Health Insurance Assistance Program, or SHIP for short. This federally funded program provides free counseling to help Medicare beneficiaries wade through their options and make the best choices for their needs. SHIP counselors are highly trained and knowledgeable about local options to help guide seniors in their decision-making.
In addition to the SHIP program, your local Area Agency on Aging likely can provide some assistance in understanding your options and may be able to offer additional local resources. An elder care attorney can also be a good source of support as you look to shore up your financial future.
End recommends working with a financial planner who is well-versed in senior care to get the best insights into how to manage your finances for the long term.
“The best outcomes will be driven by caring and empathetic help when you need it,” he says.
5. Enrolling in an HSA plan
Some health insurance plans offer a health savings account option, and these can be useful for seniors on a fixed income, as you may be able to access those funds in retirement to cover home health care expenses as well as premiums for Medicare parts A, B and D.
If you’re still working and have access to an HSA, consider using this option to save money for future use. In 2026, you can save up to $4,400 for an individual or $8,750 for a family tax-free in your HSA, and people age 55 and older can contribute an additional $1,000 per year. This money is “yours to keep forever,” and it can really add up over time, says Whitney Stidom, vice president of sales and operations with eHealth Inc., a health insurance broker and online resource provider headquartered in Santa Clara, California.
6. Adding supplemental insurance
If it fits in your budget, End recommends supplementing Medicare with other insurance to protect against long-term care expenses in the event of other health issues. This includes Medicare supplemental insurance, aka Medigap plans, and a dental or vision plan that may help reduce your out-of-pocket costs in retirement.
7. Planning ahead
End encourages you to use insurance options and proper estate planning to protect yourself from long-term care and home health care expenses down the line.
“You’re never going to be healthier than you are right now,” he points out. “With proper financial planning, you can account for the growth of these expenses and be prepared for the unexpected.”
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7 Ways to Reduce Health Care Costs in Retirement originally appeared on usnews.com
Update 03/27/26: This story was published at an earlier date and has been updated with new information.
