Key Takeaways

• Original Medicare leaves significant gaps in coverage that can result in high out-of-pocket costs, especially for hospital stays, medical services, and prescription drugs.

• You can take steps to protect yourself from these gaps by understanding the limits of Original Medicare and exploring supplemental strategies.

Why Original Medicare Leaves You Exposed

Original Medicare—Part A for hospital insurance and Part B for medical insurance—is the foundation of healthcare coverage for millions of Americans. However, it is not a comprehensive solution. There are no annual out-of-pocket limits, which means your costs can continue to grow if you face ongoing or serious medical issues.

Without a ceiling on what you might pay, you are at risk for financial strain in the event of an illness or injury. This is especially critical as healthcare costs continue to rise in 2025 and beyond.

What Original Medicare Does Cover

• Part A: Inpatient hospital care, skilled nursing facility care, hospice, and some home health services.

• Part B: Doctor visits, outpatient care, preventive services, durable medical equipment.

What It Doesn’t Cover

• Prescription drugs (outside of certain hospital-administered drugs)

• Long-term care (custodial care)

• Routine dental, vision, and hearing services

• Overseas medical care

• Most over-the-counter health needs

The Financial Gaps in Original Medicare

Even for services it does cover, Original Medicare does not pay the full cost. Here’s a breakdown of the out-of-pocket costs you’re responsible for in 2025:

Deductibles and Coinsurance

• Part A: You pay a $1,676 deductible for each benefit period. After 60 days in the hospital, daily coinsurance kicks in: $419 per day from days 61–90, and $838 per day after day 90 (for up to 60 lifetime reserve days).

• Part B: You pay a yearly deductible of $257. After that, Medicare covers 80%, and you are responsible for the remaining 20% with no cap.

No Annual Out-of-Pocket Limit

Original Medicare does not offer an annual limit on your out-of-pocket costs. This means that a year with multiple hospital visits, doctor appointments, or outpatient procedures can quickly add up—especially for chronic conditions or major illnesses.

Additional Services That Add to Costs

Several health services that are essential to aging adults are not covered under Original Medicare. These include:

• Prescription medications: You must get a separate plan to cover drug costs.

• Long-term care: Custodial care at nursing homes or assisted living facilities is not covered.

• Dental and vision care: Routine cleanings, glasses, and eye exams must be paid for out-of-pocket or through other coverage.

These gaps can catch you off guard unless you have other protections in place.

What You Can Do to Safeguard Your Finances

While Original Medicare by itself isn’t a safety net for your healthcare costs, there are ways to build a more secure healthcare plan that protects both your health and your finances.

1. Consider Adding a Medigap Plan

Medigap, also known as Medicare Supplement Insurance, helps cover out-of-pocket costs like copayments, coinsurance, and deductibles. These plans are sold by private insurers but standardized and regulated.

• You must be enrolled in both Part A and Part B.

• Medigap does not include prescription drug coverage.

• Enrollment is best during your six-month Medigap open enrollment period, which begins when you’re both 65 or older and enrolled in Part B. After this window, you may face higher premiums or denial based on health status.

2. Enroll in a Standalone Prescription Drug Plan

You can enroll in a separate Part D plan to help cover prescription drug costs. These plans vary in terms of coverage and cost-sharing, but without one, you’ll pay full price for most medications.

• Enroll during your Initial Enrollment Period, which starts three months before your 65th birthday and ends three months after.

• If you miss your window, you may face a late enrollment penalty.

3. Use Preventive Services to Reduce Risks

Medicare Part B includes many preventive services at no additional cost to you. Staying ahead of medical issues can reduce your need for costly treatment later.

• Annual wellness visits

• Screenings for cancer, diabetes, and cardiovascular conditions

• Vaccinations such as flu, pneumonia, and hepatitis B

By taking advantage of these, you can catch health concerns early and lower the chances of needing extensive, costly care.

4. Track Your Out-of-Pocket Spending

It’s easy to underestimate what you’re spending if you’re not monitoring it. Keep track of:

• Deductibles paid

• Coinsurance amounts

• Bills for non-covered services

• Prescription drug expenses

Understanding your annual healthcare spending helps you decide if additional coverage is worth it and identify opportunities to cut costs.

5. Explore Financial Assistance Programs

If your income is limited, you may qualify for federal or state programs that help with Medicare costs:

• Medicaid: Joint federal and state program that assists with healthcare costs for low-income individuals.

• Medicare Savings Programs: Help pay Part A and/or Part B premiums, deductibles, and coinsurance.

• Extra Help: Assists with Part D prescription drug costs.

Applying for these can significantly reduce your burden, especially if you live on a fixed income.

Timing Matters: Enrollment and Cost Implications

Making decisions at the right time can help you avoid late penalties, coverage delays, or higher out-of-pocket costs.

Initial Enrollment Period

Begins three months before the month you turn 65 and ends three months after. This is the best time to enroll in Part A, Part B, and a Part D plan.

Medigap Open Enrollment

Starts the month you are 65 or older and enrolled in Part B. It lasts six months and offers guaranteed issue rights during this time.

General Enrollment Period

If you miss your Initial Enrollment Period, you can sign up from January 1 to March 31 each year. Coverage begins July 1, and late penalties may apply.

Annual Enrollment Period

From October 15 to December 7, you can change your Medicare drug plan or switch from Original Medicare to another form of coverage. Any changes take effect January 1.

Special Enrollment Periods

These occur due to life events such as losing employer coverage, moving, or qualifying for assistance. Timing varies based on the event.

Avoid Surprises: Know the Limits

Here are some reminders to keep your expectations realistic:

• You’re responsible for 20% of most outpatient services after meeting your Part B deductible.

• Part A hospital costs can escalate quickly if you have extended stays.

• Non-covered services like long-term care or dental expenses must be budgeted separately.

• Prescription drugs require standalone coverage if you’re using Original Medicare.

Being informed ahead of time allows you to plan and avoid financial distress later.

Building a Smarter Medicare Plan in 2025

Given the rising healthcare costs, the need to actively manage your Medicare coverage has never been more important. You have choices—but it’s up to you to make the ones that align with your medical needs and financial comfort.

In 2025, you can’t afford to ignore the holes in Original Medicare. Whether it’s exploring supplemental options, enrolling in a Part D plan, or applying for assistance, these steps can make a substantial difference in your experience with the healthcare system.

Secure Your Coverage with Confidence

You shouldn’t have to worry about unpredictable bills or gaps in care. Take the time to understand what Original Medicare covers and where it falls short. From adding supplemental plans to using preventive services, each choice you make can reduce your financial risk and improve your quality of life.

If you have questions or want help evaluating your options, get in touch with a licensed agent listed on this website for professional advice tailored to your needs.