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.

Woman in white medical coat massaging the back of an older woman rubbing her neck


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.

Thankfully, you get plenty of time to do so. Your initial enrollment window begins three months before the month you turn 65, and it ends three months after the month you turn 65. You can sign up for Medicare online, either on its own or in conjunction with Social Security.

4. You should enroll in Medicare as soon as you're eligible

Many seniors can't wait to get on Medicare and enjoy the health benefits it provides. But if you're still working when you turn 65 and have access to a group health plan through your job, it might pay to sign up for Medicare Part A alone (since it's free), but hold off on the other parts that charge a premium. This especially holds true if you have a heavily subsidized insurance plan through work, and one that offers a respectable range of coverage.

Of course, if you're paying a fortune for your group plan through work, and you aren't happy with it, then it pays to run some numbers and see whether getting on Medicare makes more sense. But know that if you decide to delay your Medicare enrollment because you have group health coverage, you'll get a special enrollment period to sign up that kicks in once your group coverage ends. As such, you won't have to worry about the penalties associated with signing up late.

Medicare is a complex program with a lot of moving parts. The more you read up on it, the better equipped you'll be to manage your health in retirement.