New Survey Is Catching Retirees Off Guard About How Much Health Care Will Actually Cost Them

Editor's note: Data referenced in this article comes from the recent West Health-Gallup Center Healthcare in America survey.

Health care has always been one of the biggest wild cards in retirement. But a new survey suggests that the difficulty of paying high health care bills is only increasing. Even people who feel prepared financially are being caught off guard when they look closer at the numbers.

That matters more now than it did a decade ago. Costs are rising, projections are getting steeper, and retirees are living longer. If you want to avoid wasting your retirement savings on expenses you didn't fully plan for, this is one area worth a second look. Here's what the latest data is showing, and what you can do about it.

Many retirees are having trouble paying for health care costs

According to the recent West Health-Gallup survey, nearly half of U.S. adults have little or no confidence that they will have the financial resources needed for health care in retirement, even when many are eligible for Medicare. 24 million Americans have delayed retirement specifically due to rising health care costs.

One of the most recent findings is that nearly 33% of Americans have made one or more trade-offs to afford health care. This means prolonging current prescriptions, borrowing money, skipping a meal, or cutting other essentials.

Health care isn't a one-time expense. It is ongoing, unpredictable, and usually increases with age. Even people who budget carefully for housing and food can overlook how quickly medical costs add up over 20 or 30 years.

Costs are rising faster than many people expect

Health care costs have been climbing steadily, and retirees tend to feel it more than most. Premiums, out-of-pocket expenses, and prescription drug costs have all trended upward in recent years.

Part of the challenge is that increases don't often happen evenly. A relatively healthy year might be followed by one with significantly higher expenses. That uneven pattern makes health care expenses exceptionally harder to plan for and easier to underestimate how much you'll actually need.

Medicare doesn't cover as much as people assume

Many Americans expect Medicare to handle most of their health care costs in retirement. It helps, but it doesn't eliminate expenses.

Retirees are still responsible for:

• Premiums for Medicare Part B and Part D
• Deductibles and copays
• Dental, vision, and hearing care
• Long-term care, which can be one of the biggest expenses later in life

This is where expectations and reality often diverge. People hear "Medicare" and assume broad coverage, but the gaps can be significant.

Future projections are adding to the concern

Looking ahead, the numbers become even more concerning. Some projections suggest Medicare premiums could roughly double by 2035, driven by rising health care costs and increased demand from an aging population.

That doesn't mean everyone will face the same increase, but it does point to a broader trend: health care is likely to take up a larger share of retirement budgets over time. For someone already close to the margin, that could create real pressure.

Why this hits new retirees the hardest

If you're already deep into retirement, you've likely adjusted your spending patterns. But new retirees and those about to retire are often the most vulnerable to these surprises. This is the stage where income becomes more fixed, and savings withdrawals have begun. 

Unexpected health care costs can have long-term consequences. If health care expenses come in higher than expected early on, it could mean drawing down savings faster than planned or cutting back in other areas.

What you can do if you're worried about costs

If this is making you rethink your plan, you're not alone. The good news is there are ways to adjust, even later in the process. A few practical steps to consider:

• Revisit your estimates: Build a buffer for health care that's higher than your initial guess.
• Look at supplemental coverage: Medigap or Medicare Advantage plans could help manage out-of-pocket costs.
• Use tax-advantaged accounts: If available, an HSA can be a powerful tool for covering future medical expenses.
• Time your income carefully: Managing withdrawals could help you avoid higher Medicare premiums tied to income.

None of these completely eliminates costs, but they can make them more predictable and manageable.

The real takeaway for retirement planning

The biggest issue isn't just that health care is expensive. It's that many people don't realize how expensive it is until they're already committed to a retirement plan.

That's what makes this survey so important. It highlights a blind spot that could quietly undermine an otherwise solid financial strategy. Taking the time now to revisit your assumptions could help you avoid wasting your retirement savings on costs you didn't fully plan for.

Bottom line

Health care costs in retirement are easier to underestimate than almost any other expense, and that gap can quietly throw off an otherwise solid plan. The latest survey is a reminder that even prepared retirees might be missing part of the picture, especially when it comes to long-term and out-of-pocket costs that Medicare doesn't fully cover.

One practical step many people overlook is reviewing eligibility for income-based programs each year. Changes in income could open the door to overlooked senior benefits like Medicare Savings Programs or Extra Help for prescription drugs, which might reduce premiums and out-of-pocket costs. Taking the time to reassess annually is one of the simpler smart money moves for seniors trying to stay ahead of rising expenses.

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