5 Things You May Not Know About Medicare -- but Should

Whether you're nearing retirement or are years away, you're probably somewhat familiar with Medicare. You probably know that it's how millions of older Americans today get their health coverage, and that it's a program your paycheck helps fund, the same way payroll taxes keep Social Security alive.

But there are some aspects of Medicare you may not be so familiar with. Here are five things you may not be aware of -- even though you should be.

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1. It's not free

Many people assume that there are no costs associated with Medicare enrollment. That's far from true.

Most seniors do not pay a premium for Medicare Part A, which covers hospital care. But Part B, which covers outpatient services, charges a monthly premium that tends to change from one year to the next. Part D, which provides prescription drug coverage, also charges a premium (though there are some $0 premium Part D plans available).

In addition to premium costs, there are copays, coinsurance, and deductibles you might face as a Medicare enrollee. And those could be substantial.

It's generally a good idea to buy supplemental insurance known as Medigap when you first enroll in Medicare to help defray those costs. Otherwise, you could end up dipping into your retirement savings more often than you'd like.

2. Original Medicare is not your only option

Original Medicare -- Parts A and B -- is not your only option for health coverage. You could instead choose to enroll in a Medicare Advantage plan, which is something private insurers offer.

There are certain perks associated with Medicare Advantage plans, like expanded benefits and capped annual out-of-pocket costs. But there are certain drawbacks, too, like being limited to narrow provider networks and, in many cases, needing prior authorization for more complex or expensive treatments and services.

It's a good idea to explore your Medicare Advantage options and see if it pays to enroll in one of these plans. Remember, you can always move off of Medicare Advantage if it doesn't work out, but you may find that it saves you money.

3. Medicare offers some telehealth services

Some seniors find that as they get older, it gets harder to leave the house and travel to medical appointments. The good news is that through the years, Medicare has expanded its telehealth options. Now, enrollees can participate in virtual visits to get access to the care they need without delay.

If you're on Medicare, it pays to see which services are accessible via telehealth. This especially makes sense if you don't have easy access to transportation or live in a remote part of the country.

4. You can enroll in Medicare if you're still working

You might assume that if you're still employed, you aren't eligible to sign up for Medicare. But once you turn 65, you're able to enroll -- even if you're still working full-time.

It could make sense to sign up for Medicare even if you have health coverage through your job. You may find that Medicare is more comprehensive and less expensive than your workplace health plan.

That said, you should know that once you sign up for Medicare, you're no longer able to contribute money to a health savings account, or HSA. If that's a benefit your employer provides, you'll need to opt out.

This doesn't mean that you can't still use your HSA once you're on Medicare. You just can't add more money to it.

5. Enrolling late could cost you -- for life

Your initial Medicare enrollment window starts three months before the month of your 65th birthday, and it ends three months after that month. If you don't have access to a qualifying group health plan through your job, it pays to enroll during that time. Not only could that help ensure that you have health coverage in place, it could help you avoid costly penalties.

If you're late in signing up for Medicare, you risk a 10% surcharge on your Part B premiums for each 12-month period you could've enrolled but didn't. Worse yet, that's a lifelong penalty you typically can't shake. So it pays to avoid it if you can.

Clearly, there's lots to know about Medicare. But don't just wait until you're about to sign up to start learning about it. The more you understand ahead of retirement, the better you can plan for your senior years.

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