90% of older Americans are struggling with these common questions about Medicare

Retirement is a joyous step in life and many workers count the days until they can quit their jobs and start enjoying a life of leisure.

However, retirement can also be a stressful time if you are not fully prepared – especially with regard to health care costs. According to a study by the Urban Institute, the average worker currently in their forties could spend about $ 335,000 on health care expenses, while those who are 90 and over can expect to spend even more, about $ 500,000.

Some workers may not be worried about these expenses, thinking that Medicare has covered them for all the health care costs that could happen to them. But Medicare does not cover everything, and there are several crucial aspects of Medicare that the vast majority of workers do not understand.

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1. Does Medicare cover long-term care?

A Nationwide survey reveals that 90% of workers aged 50 and over mistakenly believe that Medicare will cover the costs of long-term care in retirement.

Although Medicare typically covers short stays in a qualified nursing facility (as long as care is considered medically necessary), it does not cover day care. Custody includes stays in a retirement home or retirement home, and generally includes care such as helping residents to get dressed, feed or bathe, and perform household chores. .

About 70% of retirees will need long-term care, according to research from the US Department of Health and Human Services, and those in need use these types of services for an average of three years. Long-term care is not cheap either; the average semi-private room in a retirement home will cost you about $ 6,800 a month. Over three years, long-term care costs alone account for nearly a quarter of a million dollars.

Since these costs can significantly reduce your retirement savings (and you will not receive any Medicare assistance), it is important to start preparing early. Integrate long-term care costs into your retirement plan or consider taking out long-term care insurance. If you opt for insurance, be aware that premiums are heavy (the average 55-year-old couple pays around $ 2,500 a year). But compared to a $ 250,000 long-term care bill, insurance could be worth the steep price.

2. Can you change plans once you have enrolled in Medicare?

In this question, 94% of the survey respondents answered incorrectly, saying that you can not change plans once you have registered. In fact, even after signing up for a Medicare plan, you have two options to change your plan each year.

There are two Medicare open enrollment periods each year, each offering different opportunities to adjust your plan. A short period from December 15th to 7th. During this time, you can switch from an original Medicare plan to a Medicare Advantage plan (or vice versa), from one Advantage plan to another, add a drug coverage to your Advantage plan, adhere to the prescription drug coverage of your plan. Part D, change prescription drug plans or completely abandon prescription drug coverage.

If you miss this window, there is another registration period open from January 1 to March 31, during which you can also make changes. However, during this period, your options are more limited. For example, you can switch from one Advantage plan to another, but you can not go from an original Medicare plan to an Advantage plan. However, you have the option to return from an Advantage plan to an original Medicare plan.

It is important to take into account all your options during open registration because you could get better terms by changing plans. If you think you have the same plan for the rest of your life, you may be spending more than you need.

3. Can you sign up for Medicare anytime?

About 89% of respondents incorrectly believe that you can sign up for Medicare at any time. In fact, once you become eligible, you will have to register during one of the designated periods.

You become eligible for Medicare at age 65, so your registration window starts three months before the month of your 65th birthday and ends three months after that month. There is therefore a seven month window around your 65th birthday when you can register. If you miss this initial registration window, you will have to wait for one of the other registration periods open to register and you may also have to pay a penalty for not registering on time.

In special circumstances, you may be able to register during a special registration period. For example, if you continue to work after the age of 65 and you are covered by your employer's insurance plan, you are not required to register for Medicare during your period initial registration. you can wait until you quit your job (and lose your insurance).

Understanding when you are allowed to subscribe to Medicare coverage is crucial because if you miss your window, you may miss coverage. If you are currently using prescription drugs, losing your insurance may require you to pay for this drug out of your pocket, which could cost you hundreds or even thousands of dollars.

Medicare can be confusing and health insurance is not the most exciting topic to consider when planning your retirement. However, not understanding how Medicare works can be expensive. Before you retire, think about how you will cover health costs and make sure you know when and how to sign up for Medicare. In doing so, you make sure that your retirement savings will go as far as possible.