Medicare turns 50 but Americans still have a lot to learn

Medicare, the landmark health insurance program for those 65 and older, turned 50 on Thursday.

Some 55.2 million Americans are enrolled in the program and 91% of them, according to a Kaiser Family Foundation poll released this month, say their experiences with the insurance have been positive.

But anecdotal evidence suggests that many are nonetheless perplexed by what it does — and doesn't — provide.

"Medicare and its alphabet soup of parts is confusing to individuals when they first are eligible for the program,'' says Leslie Fried, senior director of the National Council on Aging Center for Benefits Access. And "the success of the Medicare program and its related marketplaces depends on the ability of millions of consumers to make good decisions about complex insurance and plan options when they first enroll in Medicare and annually thereafter.''

One surprise for many Americans is Medicare's different areas of coverage. Though most do not have to pay a premium for Medicare Part A, which covers hospital stays, most will pay a monthly premium for Part B, which covers their doctors' visits and other outpatient services.

Both Parts A and B may have co-payments or deductibles. And if you're still working and receiving insurance coverage from your employer, you may want to put off enrolling in Part B because your income could lead to higher premiums.

"You pay for Part B and you pay for adding supplemental insurance,'' says Merrill Lynch wealth management adviser Judith Chipps, of additional policies a consumer may acquire to help cover the cost of prescription drugs or pay for vision and dental services.

"Most seniors are very grateful for Medicare," Chipps adds. " "But it doesn't cover everything. … (And) you need to start planning early and realizing that there is going to be some cost there. It isn't all free."

A Merrill Lynch retirement study released last September found that fewer than 1 in 6 people who were in their 50s and not yet retired had calculated how much they might need to cover health or long-term care costs when they stopped working.

Chipps says it's important to prepare for such expenses, understanding that Medicare is only one part of the equation.

"When I talk to my clients about retirement, I say, 'You're going to spend more on health care than you think you are,''' she says, recommending that people speak to a financial adviser long before they are on the cusp of retirement.

The Merrill Lynch study found that while only 37% of Americans in their 50s thought they might eventually need long-term care, 70% actually will. And Medicare doesn't cover it.

"There's a difference between medical care and long-term care — you get elderly and you can't take a shower by yourself ... and you need assistance,'' Chipps says. "So you need an insurance policy of some sort, or savings or a plan to address that.''

Long-term care policies can be expensive and difficult to get if you're in poor health. But there are ways to try and pare the cost, such as opting out of inflation adjustments for the policy, or getting a life insurance policy instead that includes a rider to help cover part of the costs for long-term care.

Another option to consider while you're still working is a health savings account. "All of those things are helpful,'' she says. "You need to devise an individual approach.''

It's also important to do your homework before you become eligible for Medicare.

"Individuals will want to understand when they should enroll, what decisions they need to make about drug coverage and supplemental insurance,'' Fried says. "And, this is especially important if the individual is turning  65 and still employed. There are specific rules about coordination of employer coverage and Medicare, and there can (be) adverse consequences if an individual contributes to a health savings account while on Medicare.''

There are many educational resources. Consumers can go to Medicare.gov for information. The National Council on Aging's web tool "MyMedicareMatters'' boils the program down, and its Medicare QuickCheck addresses consumers' questions about their personal situation. Fried says that each state has health insurance assistance programs that can help guide consumers.

And Merrill Lynch has an app that illustrates for clients what portion of their health care costs is going to be covered by Medicare, breaking it down between Parts A and B. Many insurers also have apps where consumers can input their medications and compare coverage costs.

Follow USA TODAY reporter Charisse Jones on Twitter @charissejones