Health care figures to be one of the biggest parts of our retirement budgets. Fortunately, Medicare will provide help for millions of seniors to be able to meet these medical bills.

As important as Medicare is for so many retirees, it’s also a complex program, leading to many misconceptions about the benefits it provides. A clear understanding of exactly what Medicare does and does not cover can help you better plan for your health care costs in retirement.

In our experience, these are the four most common Medicare misconceptions we see.

Medicare is “Free”

The perception from many people is that once someone is eligible for Medicare, health care costs are largely eliminated. It’s true that Part A is typically free, but there are monthly premiums, deductibles, coinsurance and copayments associated with the other parts of Medicare that you’ll need to be prepared to pay for. Depending on your income, your Part B monthly premium will be $104.90-$335.70. If you add a Medicare Advantage Plan (Part C) or a Medicare prescription plan (Part D), you’ll face additional monthly and yearly expenses.

Medicare Covers All Medical Expenses

From preventative services to medically necessary supplies like wheelchairs and walkers, Medicare covers a large number of medical devices and services you may need in retirement. But there also a number of services that Medicare doesn’t cover that could prove to be very expensive. Most of your dental care, cosmetic surgeries and hearing aids are all things that you’ll either have to pay for out-of-pocket, or purchase through a Medicare health plan that covers them.

Perhaps the biggest health care expense that isn’t covered by Medicare is long-term care (LTC). Many people assume they won’t need any LTC, but the fact is someone turning 65 today has an almost 70% chance of needing some type LTC, according to the U.S. Department of Health and Human Services. The high likelihood of needing care coupled with the high costs of LTC (a private room in a nursing home could cost upwards of $7,000 a month) could make LTC insurance an invaluable investment.

It Doesn’t Matter When I Enroll

It’s true you can delay enrolling in Medicare, but doing so could come with a hefty cost. In most scenarios, your best option will be to enroll for Medicare during your Initial Enrollment Period. The Initial Enrollment Period covers the three months before you reach age 65, the month of your 65th birthday and the three months after you turn 65. If you fail to sign up during this period, you’ll have to wait for the General Enrollment Period from January 1 through March 31 every year, with coverage beginning on July 1. In addition to the waiting period that could leave you without coverage, you could also face a 10% penalty on your Part B premiums for every year you delay enrolling.

Once My Spouse is Eligible for Medicare, I’ll Also be Covered

If your spouse is getting ready to enroll into Medicare and you’re still younger than 65, you will still not be eligible for Medicare coverage. Medicare does not offer any family coverage and only those with a disability will be eligible for early Medicare benefits. For younger spouses, consider COBRA or an individual policy to bridge the years until you become eligible for Medicare.

This is just the tip of the iceberg when it comes to fully understanding your Medicare benefits. Working with a financial advisor or an insurance specialist can help you navigate this complex program and find specific policies that can suit your individual needs.

This article originally appeared on March 1, 2015 in the Brainerd Dispatch. You may view the article here.

Peg Webb

Peg Webb

Senior Vice President, Financial Advisor & Host of the “Your Money” radio show

Series 7, 53 & 63 Securities Registrations,1 Series 65 Advisory Registration,† Insurance License Peg was attracted to the financial services industry early in her career. She feels fortunate to be able to use her 30 years of in-depth knowledge working alongside Preston, the Roundtable™ and their staff to prepare clients for retirement. A lifelong learner, she enjoys collaborating with her team to stay on top of the best practices regarding comprehensive planning....Read More