Retirement Insurance Gaps: A Checklist for Coverage You May Be Missing

Retirement brings a shift in how you manage risk. The employer-sponsored coverage that may have protected you for decades goes away, and Medicare steps in as the foundation of your health insurance. But Medicare was never designed to cover everything. From dental care to long-term custodial support, significant gaps exist that can drain your savings if you are not prepared. This checklist walks through 10 common insurance gaps retirees face, explains the financial impact of each, and identifies the products that can close them.

Use this as a working document. Review each item, assess whether you are covered, and take note of where action is needed. Many of these gaps can be addressed during Medicare enrollment periods or through products available year-round. The goal is not to buy every type of insurance on this list but to make informed decisions about which risks are worth insuring and which you can manage on your own.

Gap 1: Dental, Vision, and Hearing Coverage

Original Medicare does not cover routine dental exams, cleanings, fillings, dentures, eye exams for glasses, eyeglasses, contact lenses, or hearing aids. These are among the most commonly needed services for older adults, and the costs add up quickly. A single dental crown costs $800 to $1,500. Hearing aids average $2,000 to $4,000 per pair. Annual eye exams plus prescription glasses can run $300 to $600.

About 98 percent of Medicare Advantage plans now include some dental, vision, and hearing benefits, but the depth of coverage varies widely. Some plans cover only preventive dental care with annual limits as low as $500 to $1,000 for comprehensive services. Retirees on Original Medicare have no built-in coverage and should consider standalone dental, vision, and hearing plans or bundled packages. Check whether your coverage addresses preventive, basic, and major dental services, plus vision hardware and hearing aid allowances.

Gap 2: Long-Term Care

Long-term care is the single largest uncovered financial risk in retirement. Medicare pays only for short-term skilled nursing facility care after a qualifying hospital stay, and only up to 100 days. It does not cover custodial care, which is the ongoing assistance with daily living activities like bathing, dressing, and eating that most long-term care involves. An estimated 56 percent of people turning 65 today will need some form of long-term care.

The cost of care is substantial. A private room in a nursing home averages more than $131,000 per year. Assisted living averages about $64,000 per year. Home health aides cost roughly $75,000 per year for full-time care. Without insurance or significant assets, these costs can quickly consume a lifetime of savings. Long-term care insurance, hybrid life and LTC policies, and Medicaid planning are the primary tools to address this gap. If you have not assessed your long-term care risk and strategy, this should be at the top of your checklist.

Gap 3: Prescription Drug Coverage Shortfalls

Medicare Part D covers prescription drugs, but the coverage has phases that can leave you paying more than expected. After meeting the annual deductible, you pay copays or coinsurance during the initial coverage phase. Once your total drug costs reach a threshold, you enter a coverage gap phase. Thanks to the Inflation Reduction Act, the annual out-of-pocket cap for Part D is $2,000, which provides important protection. However, some retirees taking specialty or brand-name medications may still face high monthly costs before reaching that cap.

Review your Part D plan annually during the Medicare Open Enrollment Period from October 15 to December 7. Drug formularies change each year, and a medication that was covered at a low tier this year may move to a higher tier next year. Use the Medicare Plan Finder tool at Medicare.gov to compare plans based on your specific prescriptions. If you do not have Part D or creditable drug coverage, you may face a late enrollment penalty of 1 percent of the national base premium for each month you were without coverage.

Gap 4: Hospital Deductible and Coinsurance

Medicare Part A charges a $1,676 deductible per benefit period in 2026. Unlike an annual deductible, this can be charged multiple times in a single year if you are discharged from the hospital and readmitted after 60 days. After the deductible, you pay no coinsurance for days 1 through 60. But for days 61 through 90, coinsurance is $419 per day. Beyond day 90, you draw on 60 lifetime reserve days at $838 per day, and once those are exhausted, you pay the full cost.

A Medigap plan is the most comprehensive solution to this gap. Plans that cover the Part A deductible and hospital coinsurance eliminate virtually all hospital cost-sharing. Hospital indemnity insurance is an alternative, particularly for Medicare Advantage enrollees who cannot purchase Medigap. It pays a fixed daily or per-admission benefit that can offset hospital copays and deductibles.

Gap 5: Skilled Nursing Facility Coinsurance

After a qualifying three-day hospital stay, Medicare Part A covers skilled nursing facility care for up to 100 days. The first 20 days have no coinsurance. Starting on day 21, you owe $204.50 per day in 2026. If you need the full 80 days of coinsurance-eligible care, your bill comes to $16,360. After day 100, Medicare stops covering skilled nursing entirely.

Medigap plans cover skilled nursing facility coinsurance in full. If you are on Original Medicare without Medigap, you are exposed to this cost every time you need extended skilled nursing care. Medicare Advantage plans handle skilled nursing differently, with copays or coinsurance that count toward the plan's out-of-pocket maximum. Either way, understanding your exposure and having a plan to cover it is essential.

Gap 6: Foreign Travel Medical Coverage

Original Medicare provides almost no coverage for medical care received outside the United States. If you have a medical emergency while traveling in Europe, Asia, or Central America, you will likely pay the full cost out of pocket. This applies to both Part A and Part B services. Several Medigap plans include a foreign travel emergency benefit that covers 80 percent of costs after a $250 deductible, up to a $50,000 lifetime maximum, but this benefit is limited to emergencies and does not cover routine care abroad.

Retirees who travel internationally should consider travel medical insurance in addition to or instead of the Medigap travel benefit. Travel medical policies can be purchased on a per-trip or annual basis and typically offer higher coverage limits, medical evacuation benefits, and trip interruption coverage. Some Medicare Advantage plans also include limited foreign travel benefits, but the coverage is generally minimal.

Gaps 7 Through 10: Additional Risks to Consider

Gap 7 addresses disability coverage for pre-retirees. If you are in your late 50s or early 60s and still working, disability insurance remains critical until your retirement savings and Social Security can fully replace your income. Losing several years of peak earning and saving to a disability could permanently reduce your retirement security. Review your employer's disability coverage and consider supplementing it with an individual policy if your benefit is less than 60 percent of income.

Gap 8 covers life insurance in retirement. While life insurance needs typically decrease as children become independent and mortgages are paid off, some retirees still benefit from coverage. If your spouse depends on your pension or Social Security income that would be reduced upon your death, life insurance can fill that gap. Final expense insurance, with benefit amounts of $5,000 to $25,000, can cover funeral and burial costs that average $8,000 to $12,000.

Gap 9 is critical illness insurance. Even with Medicare and a Medigap plan, a cancer diagnosis or heart attack creates expenses beyond medical bills. Lost income for a working spouse who becomes a caregiver, travel to treatment centers, home modifications, and uncovered alternative treatments can strain finances. A critical illness policy paying $10,000 to $50,000 upon diagnosis provides flexible funds to manage these costs.

Gap 10 is identity theft and cyber fraud protection. Retirees are disproportionately targeted by scammers and identity thieves. Medicare numbers, Social Security numbers, and financial account information are all valuable targets. Identity theft protection services and cyber insurance riders on homeowners policies can help with monitoring, alerts, and recovery. While this is a newer category of coverage, the growing prevalence of elder fraud makes it worth evaluating.

How to Use This Checklist

Start by listing your current coverage. Write down your Medicare plan type (Original Medicare or Medicare Advantage), your Medigap plan if applicable, your Part D drug plan, and any other insurance policies you carry. Then go through each of the 10 gaps above and check whether you have coverage that addresses it.

For each gap where you lack coverage, ask yourself two questions. First, how likely is this risk to affect me? A retiree who never travels internationally may not need foreign travel coverage. A retiree with a strong family history of dementia should prioritize long-term care insurance. Second, can I absorb the cost if this risk materializes? If paying a $1,676 hospital deductible would not strain your finances, you may choose to self-insure that risk. If a $131,000 annual nursing home bill would devastate your savings, that gap needs to be addressed.

Prioritize the gaps with the highest financial impact and the greatest likelihood of occurring. Long-term care, hospital deductibles, and dental coverage rank near the top for most retirees. Address these first, then work down the list as your budget allows. Review your checklist annually, especially during the Medicare Open Enrollment Period from October 15 to December 7, when you can make changes to your Medicare Advantage, Part D, and Medigap coverage.

No retiree needs to fill every gap on this list. The purpose of the checklist is awareness. By understanding where your coverage has holes, you can make deliberate choices about what to insure and what to self-fund, rather than discovering a costly gap only when you need care. That informed approach to retirement insurance planning is what separates retirees who are financially prepared from those who are caught off guard.