Millions of seniors depend on Medicare to provide health benefits in retirement, but unfortunately, there's a lot of misinformation out there about how the program actually works. If you want to make the most of your Medicare benefits and budget properly for healthcare in retirement, you'll need to cut through those myths and get right to the facts. Here are a few misconceptions you can't afford to buy into.
1. Your coverage is free
Medicare consists of a few distinct parts. Part A covers hospital care, Part B covers doctor visits and diagnostics, and Part D covers prescription drugs. While Part A is free to most enrollees, Parts B and D charge a premium that could eat into your retirement budget.
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The standard Part B premium this year is $135.50 per month. Higher income seniors, however, often have to pay more for Part B. Meanwhile, there's no standard premium for Part D, as your costs will depend on the plan you choose. But as is the case with Part B, higher income seniors pay an added monthly charge on top of their standard Part D premiums.
Furthermore, under Medicare, there's a host of copays and deductibles you'll be liable for, the extent of which will depend on the specific care you end up needing. The point, therefore, is that Medicare is far from free. If anything, it can get quite expensive.
2. All of your healthcare needs will be covered
Though Medicare covers a wide range of medical services for seniors, there are certain big-ticket healthcare items it won't pay for. These include dental care, hearing aids, and vision services. If you want coverage for these critical items, you'll need to purchase separate insurance or sign up for a Medicare Advantage plan. Medicare Advantage is an alternative to original Medicare that provides a more extensive range of coverage.
Another thing Medicare won't cover? Long-term care, like assisted living facilities or nursing homes. In most cases, those are expenses you'll need to pay for out of pocket, which is why securing long-term care insurance during your 50s or 60s is a wise idea.
3. You'll be enrolled automatically
Medicare eligibility begins at age 65, but hitting that milestone doesn't mean you'll be automatically enrolled. If you're collecting Social Security by the time your 65th birthday rolls around, you'll generally get put on Medicare Parts A and B without having to do anything. But if that's not the case, then you'll need to sign up yourself to avoid penalties down the line.