Working Americans generally understand that the federal government’s Medicare program will largely cover their health care needs after they become eligible to enroll at age 65.Â
Personal finance bestselling author and radio host Dave Ramsey bluntly explains a few specifics on the Medicare program in 2025 about which current and future enrollees would be wise to pay attention.
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First, it’s important to know that, while Medicare covers many important health care needs, it does not cover everything.
For example, Medicare Part A covers inpatient hospital care, skilled nursing facility care, hospice care and home health care. There is a $1,676 deductible per benefit period, but that’s only paid if one is receiving care. Enrollees do not pay a premium for Part A because most have already contributed to it through the Medicare taxes they pay while working.
Medicare Part B covers doctor visits, outpatient care and preventive services such as flu shots and screenings.
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Another option for enrollees is Medicare Part C, also known as Medicare Advantage, which is covered by private insurance companies. It offers recipients choices that often include services Original Medicare does not cover, such as vision, dental and hearing.
Prescription drugs are covered by Medicare Part D. Those costs vary depending on one’s health care and medicine needs. However, a new benefit for 2025 is that out-of-pocket costs for prescription drugs are now capped at $2,000 per year.
Ramsey has a few stark words about Medicare costs and also offers some tips on how a person can use the program to address their specific needs.
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Ramsey bluntly explains a broad view of Medicare coverage
Ramsey calls attention to the Medicare deduction line item on all Americans’ paychecks that they’ve been receiving every payday during their careers. As people near retirement age, people imagine they soon will finally be using the benefits they’ve been paying for.
“And wouldn’t it be great to get your money’s worth?” Ramsey asked. “Well, considering the government’s track record with budgeting, that might be asking a bit much, but you definitely want to make the most of what you’re entitled to.”
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Ramsey suggests retirees think back to their working years, when they likely received relatively affordable health insurance coverage through an employee benefit.
“But once you retire and the company’s no longer chipping in, coverage will get expensive,” Ramsey wrote. “Medicare can be a big help — as long as you choose the right kind of coverage.”
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Dave Ramsey clarifies how to get help paying costs Medicare does not cover
Ramsey explains that there is one effective option that, like Medicare Advantage, is available through private insurance companies.
This option is called Medigap (a Medicare Supplement Plan), which is essentially insurance that assists in paying costs that Medicare won’t cover — such as coinsurance and deductibles.
Costs for Medigap premiums vary substantially, depending on a number of factors — including plan type, smoking status, location, age, health and gender.
Not every Medigap plan is available to all people. One important exercise is to examine a few of these plans in an effort to get a better understanding of how they are used.
The most popular Medigap plan that is available to everyone is Plan G. Premiums typically range from about $100 to $300 per month in 2025 and covers most benefits.
Plan K covers half the cost of benefits and premiums are about $54 to $200 per month. Another option is Plan L, which costs between these two price ranges and covers 75% of expenses.Â
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