Allianz survey finds 34% of Americans expect Medicare to cover long-term care

Allianz Life's 2026 Annual Retirement Study, reported by InvestmentNews, found that 34 percent of Americans believe Medicare covers long-term care, which it does not. The survey of 1,000 adults aged 25 and older, conducted in January 2026 by the insurer's Center for the Future of Retirement, also measured three other misreadings. Forty-three percent thought prescription drugs were included in Medicare's standard plan, when Original Medicare requires separate Part D enrollment. Thirty-seven percent said the program is guaranteed available at retirement, when eligibility begins at 65. Twenty-three percent thought Medicare is free, when it carries premiums, deductibles and out-of-pocket costs that vary by income and work history.

Six in 10 Americans worry they will be unable to afford health care in retirement, according to the same study. Concern ran highest among Gen X at 76 percent, ahead of millennials at 60 percent and boomers at 56 percent. Sixty-two percent said they worry they cannot afford long-term care costs, and 60 percent said they are unsure Medicare will remain available for the entirety of their retirement.

Americans retiring this year will spend an average of $185,000 on medical costs over retirement, Fidelity Investments projected in July 2026, excluding long-term care. The projection covers Medicare Parts A, B and D. The HealthView Services 2026 Retirement Healthcare Costs Data Report put long-term care inflation at 5.8 percent annually, well ahead of the 2.4 percent Social Security cost-of-living adjustment projected for the same period.

According to separate Fidelity research cited in the InvestmentNews report, 54 percent of pre-retirees believe Medicare will cover all of their health care expenses in retirement, a misconception that can expose clients to tens of thousands of dollars in unplanned costs.

"Health care is one of a retiree's largest ongoing expenses, and many Americans don't realize that Medicare won't cover everything, especially long-term care," said Kelly LaVigne, vice president of consumer insights at Allianz Life.

Clients planning to stop working before 65 need a coverage bridge, because eligibility begins at that age and 37 percent of respondents assumed availability at retirement instead. Clients at 65 need a confirmed Part D enrollment rather than an assumption that drug coverage is bundled into the standard plan. Long-term care funding should be modeled on the HealthView inflation rate: a 5.8 percent cost trend against a 2.4 percent Social Security adjustment widens the gap every year. That supports putting health-care costs in the decumulation model as a trending line rather than a fixed one.