4 Ways Retirees on Medicare Can Lower Their Costs

Once you retire, you may find that money is a lot tighter than you'd like it to be. This may be the case whether you're kicking off your senior years with a big pile of savings or a modest nest egg.

One of the biggest expenses you might face as a retiree is healthcare. Getting older can be costly from a health perspective. And you may find that medical bills eat up a lot of your monthly Social Security checks once you enroll in Medicare.

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That's why it's so important to do what you can to save money as a Medicare enrollee. Here are some strategies that could lower your costs, allowing you to enjoy less financial strain.

1. Avoid late enrollment penalties

Your initial Medicare enrollment window begins three months before the month you turn 65 and ends three months after that month. So all told, you've given seven months to sign up.

If you don't enroll in a timely manner, you don't just risk a gap in coverage. You also risk a costly 10% Part B surcharge per 12-month period you could've had Medicare but didn't.

If you're still working during your initial Medicare enrollment window and have qualifying group health coverage through your job, you'll have more time to sign up. Once you leave your job or your health coverage ends, you'll be given a special Medicare enrollment period to take advantage of.

But otherwise, make sure to sign up for Medicare on time so your premiums don't cost you more each month.

2. Review your plan choices during open enrollment each year

Medicare runs an open enrollment period every year that starts on Oct. 15 and concludes on Dec. 7. During this time, existing Medicare enrollees can make changes to their coverage.

It pays to review your plan options every year during open enrollment, even if you're happy with your current plan and it's not changing for the worse. You never know if there's a better plan that offers superior coverage and lower costs.

If your Medicare Advantage or Part D drug plan is changing from one year to the next, that alone is a good reason to explore other plan choices.

Medicare's Plan Finder makes it easy to navigate the options that are available to you. Simply input where you live and what medications you take, and the tool will give you some options to choose from, along with plan ratings.

3. Take advantage of free services provided by Medicare

There are certain services all Medicare enrollees are entitled to at no cost. These include an annual well visit, certain vaccines, and some screening tests.

It's important to read up on your Medicare coverage and figure out which free services you're entitled to. Getting ahead of health issues could spare you from racking up the large bills that might come with dealing with complications due to not being on top of your health.

4. Stick to your Medicare Advantage plan's network

One drawback of Medicare Advantage over original Medicare is that plan participants are typically limited to a specific provider network. Going outside of your plan's network could mean getting less coverage for the services you need, or, in some cases, no coverage at all.

Worse yet, if you seek out-of-network coverage, the amount you spend may not count toward your plan's maximum out-of-pocket limit for the year. So before you make any appointments, verify your coverage -- even if it's a provider you've used before and your plan hasn't changed.

That said, do keep in mind that Medicare Advantage plans are generally required to pay for emergency care regardless of whether the hospital or doctor is in your plan's network or not.

Healthcare can be a major expense for retirees. And even if your health is generally good, you may end up spending more money on healthcare than you'd like. For this reason, it's important to do what you can to lower your Medicare costs. And a big part of that boils down to understanding when to sign up, how to switch plans, and which rules to follow.

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