Most Americans in, or near, retirement know too little about Medicare, causing them to pay far more out-of-pocket for retirement medical care than they should and make big Medicare mistakes.
Many people believe Medicare — the federal health insurance program for people 65 and older — covers all or most retirement medical expenses. It doesn’t. The average Medicare beneficiary pays $8,000 or more for medical expenses annually, or about half the medical costs he or she incurs. And at least 90% of Medicare beneficiaries pay more out-of-pocket for their medical care than necessary, according to Katy Votava of Goodcare.com, an independent consulting firm specializing in the economics of health care.
Fortunately, you can reduce out-of-pocket payments for retirement medical care whether you enroll in traditional Medicare (also known as Medicare Part B) or in a Medicare Advantage plan (also known as Medicare Part C), offered by private companies to cover Medicare benefits.
Let’s first look at the Traditional Medicare option.