Ready or not, about 10,000 baby boomers per day are turning 65, and Medicare is about to be flooded with eligible older Americans.

Medicare's age-old problem

The U.S. Census Bureau estimates that the elderly population will nearly double between 2010 and 2050 from 39.4 million to 78.9 million. What's more, the number of "oldest old," defined as persons aged 85 and up, is projected to more than triple to 18.2 million by 2050 from 5.7 million in 2010. This increasing life expectancy is due to improved health education, as well as better medicines and physician knowledge of disease.

While living longer is great for us, it's not such a great thing for Medicare, the social program workers pay into via payroll taxes to help cover much of the eligible medical costs of seniors aged 65 and up. Generally speaking, Medicare covers about 80% of eligible medical expenses, with the remainder of the responsibility falling on the patient. But two key concerns arise.

First, the sickest 5% of the population is responsible for about half of all medical expenditures in this country -- and this sickest 5% contains a disproportionately high number of elderly Americans. This will make for increasing strain on the Medicare program as the elderly population grows.

The other issue is that Medicare is bringing in far less in payroll taxes than it will pay out in benefits over your lifetime, according to the Urban Institute. An average-wage worker who turned 65 in 2010 and earned $44,600 (in 2012 dollars) paid an estimated $61,000 in lifetime Medicare payroll taxes. Comparatively, among that same demographic, the average-wage working man and woman were projected to receive total lifetime benefits of $180,000 and $207,000, respectively (women have longer life expectancies than men, hence the higher lifetime benefits figure). This lack of payroll tax income leaves Medicare in a potentially precarious position.

Five ways to effectively lower your Medicare costs

And beneficiaries aren't necessarily in a much better situation. Even though Medicare covers approximately 80% of eligible costs, that remaining 20% can be a heavy burden, given the rising costs for surgical procedures, prescription drugs, and basically anything having to do with maintaining or improving your health. However, the good news is there are five steps seniors and pre-retirees can take to lower their Medicare costs during their golden years.

1. Shop around for prescription drug coverage

The Centers for Medicare and Medicaid Services' top recommendation for lowering your Medicare costs is to consider shopping around for a Part D prescription drug plan that best suits your needs, keeping in mind that the cheapest plan may not offer you the best value.

Image source: National Cancer Institute.

In addition to simply shopping around each and every year for the best plan for you, the CMS offers suggestions that include looking for national-, state-, or manufacturing-based assistance programs. For example, the National Patient Advocate Foundation may be able to help lower your drug costs. The assistance it provides counts toward your true out-of-pocket costs in a given year.

Also, 21 states offer State Pharmaceutical Assistance Programs, or SPAPs, which can offer assistance with your premiums and other expenses. Even pharmaceutical companies, which typically get a bad rap, are known to offer huge discounts to people enrolled in Medicare who can't afford their medication. In other words, it never hurts to ask for assistance.

2. Consider a supplemental insurance plan

Sometimes the best way to save money in Medicare is to spend more. Supplemental insurance plans, also known as Part F or Medigap, help Medicare-eligible patients cover that aforementioned 20% of costs they might owe under Medicare. The thing with Medicare is there are no out-of-pocket annual limits, so if, for example, an individual undergoes a cancer treatment that costs $120,000 annually and is covered by Part B, then he or she could be on the hook for about $24,000 of the cost for the treatment.

Here's where a Medigap plan could come in handy. Yes, a Medigap plan has an additional premium attached to it, but it could save you a substantial amount of money if you have a chronic condition that requires regular and/or costly medical care. In this instance, paying the Part F premium on a monthly basis could be a smart investment that'll save you from unexpected out-of-pocket costs.

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3. Consider a Medicare Advantage plan

Another smart idea that could save you money is to consider the alternative to original Medicare, a Medicare Advantage plan (also known as Part C).

Medicare Advantage plans are offered by private insurers and come with a host of positives. Arguably at the top of that list is that there are annual out-of-pocket limits for enrollees (though prescription drug costs don't count toward that annual limit). Additionally, Medicare Advantage plans offer plenty of choices, as opposed to the one-size-fits-all Part A (hospital insurance) and Part B plans under original Medicare, and they typically include vision, dental, and hearing services, which aren't covered by original Medicare.

There are two important things you'll want to consider before making the switch to a Medicare Advantage plan. First, private insurer plans often have more defined networks, meaning there's no guarantee your primary care physician will be within your network. Secondly, your out-of-pocket costs could actually be higher based on what you might owe for certain services. In sum, you really need to dig into both plans to see which one works best for your health and financial needs.

4. Fund a Roth IRA

A genius way to reduce your Medicare costs is to invest in a Roth IRA early and often.

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A Roth IRA is arguably America's greatest investment tool for a number of reasons, but the best aspect of a Roth just might be that any capital gains within the account are completely free and clear of federal taxation, assuming you don't make any unqualified withdrawals. Not only does avoiding taxation on long-term capital gains help you keep more money for retirement, which can then help cover your out-of-pocket medical costs, but it could even help you lower your Medicare premium costs.

Although it may not be a well-known fact, higher-income individuals do pay a surcharge for Medicare Part B and Part D premiums. Individuals earning more than $85,000 in annual income, and joint filers with $170,000-plus, face Part B and Part D surcharges because they essentially make too much. Since Roth IRA withdrawals don't count toward your income in Medicare's eyes, being reliant on a Roth in retirement could possibly keep you from having to pay any Medicare premium surcharges.

5. Visit your doctor regularly

Finally, do yourself a favor and visit your doctor regularly throughout your life. Although the cost of visiting your doctor regularly could get tedious, the entire purpose of getting regular checkups with your primary care physician is to ensure that chronic medical conditions are caught early. If your PCP can catch a disease or disorder early, there's a chance of preventing it from becoming a substantially costlier disease later in life, which saves you money, and proves to be a less of a strain on the Medicare program and healthcare system as a whole.

The tools to reduce your Medicare costs are within your grasp, you just have to be proactive enough to put them to work.