Many seniors rely on Medicare to provide comprehensive health coverage during retirement. But the program has its fair share of rules, and not knowing all of them could derail your finances once your career comes to a close. Here are a few lesser-known Medicare facts you must be aware of.

1. Enrollment isn't free

Medicare is broken down into a few different parts:

  • Part A covers hospital care and nursing facilities
  • Part B covers outpatient care and diagnostics
  • Part D covers prescription drugs

While Medicare Part A is generally free for enrollees, Parts B and D cost money. The good news, though, is that if you have funds socked away in a health savings account (HSA), you can use them to cover your Medicare premiums.

Person at laptop covering face

Image source: Getty Images.

Of course, on top of your Medicare premiums, you'll also be liable for some amount of cost sharing in the form of deductibles, coinsurance, and copays. Though there are some exceptions (for example, you're entitled to a free well visit every year), you should expect to pay something when you use your Medicare coverage.

2. Your costs could change over time

The amount of money you pay for Parts B and D can change from year to year. And that's something you'll need to factor into your retirement budget.

If you're signed up for Social Security, any Part B increase that comes down the pike will be deducted from your monthly benefits automatically. Now thanks to a key provision, you can't have a scenario where a Part B premium hike results in a lower Social Security benefit than what you've been collecting. But if there's a year with a stingy Social Security cost-of-living adjustment and Part B rises a lot, your raise could effectively be wiped out.

3. Many essential services aren't covered

There are some common health services that Medicare won't pay for. These include dental cleanings, hearing aids, and eye exams.

If you sign up for Medicare Advantage, which is an alternative to original Medicare (which consists of Parts A, B, and D), you generally will have these services covered. Otherwise, expect to pay for them out of pocket in full -- either with funds from an HSA or another source, like your IRA or 401(k) plan.

4. There are penalties for enrolling late

Your initial Medicare enrollment window spans seven months. It starts three months before the month you turn 65 and ends three months after that month.

If you don't enroll during your initial window, you could end up getting charged more for Part B on a permanent basis. In fact, for each year-long period you're eligible for Medicare but don't sign up, you'll face a 10% surcharge on your Part B costs. You might also face penalties for delaying your Part D enrollment, so read up on the rules and make sure to secure coverage at the right time.

Medicare is a complex program. The more you learn about it, the less likely you'll be to miss out on key information that could help you better plan for and manage your healthcare expenses during your senior years.