Medicare is confusing and complicated. Most people nearing retirement age have likely heard numerous mistruths regarding when to get it, what it does for you, and so much more. That's why I'm busting the 10 most commonly perpetrated Medicare myths so you'll know how to discern fact from fiction—and put your mind at ease.

You will want to hear this episode if you are interested in...

• [0:53] Sign up for my online course: Retirement Readiness Review
• [1:21] Myth #1: You have to enroll in Medicare when you turn 65
• [2:57] Myth #2: You're automatically enrolled in Medicare when you turn 65
• [3:55] Myth #3: Medicare will tell you when it's time to enroll
• [4:27] Myth #4: Medicare is free
• [5:52] Myth #5: Your income levels impact whether or not you qualify
• [6:28] Myth #6: Having COBRA allows you to delay enrollment
• [7:16] Myth #7: You should enroll in Medicare Part A as soon as you can
• [8:54] Myth #8: Medicare Advantage plans are expensive
• [9:52] Myth #9: Medicare Advantage plans are better than Medigap plans
• [11:42] Myth #10: Once you select a plan, you're stuck with it

Myth: You have to enroll in Medicare when you turn 65

This is false. If you have job-based health insurance with a company that has 20 or more employees, you don't have to sign up for Medicare immediately. You can wait to sign up until you stop working or you lose your health insurance. Why would you want to?

There may be excess costs you wouldn't need to pay if you still have insurance through your employer. But if you're self-employed or don't have an insurance policy that covers more than 20 people, and you don't want to sign up for Medicare, you'll get hit with a late enrollment penalty.

Myth:You're automatically enrolled in Medicare when you turn 65

You're only automatically enrolled if you're already collecting Social Security when you turn 65. Everyone else has to enroll during the three months before they turn 65 or the three months after their 65th birthday month. If you're not going to enroll at 65, you have an 8-month window to enroll after your insurance coverage ends (or you'll be subject to a penalty).

Keep in mind that Medicare will not tell you when it's time to enroll. Though you'll get a lot of advertisements in the mail for supplemental plans, Medicare will not send you a reminder. To enroll, you go to SSA.gov and click on "enroll in Medicare."

Myth: Medicare is free

Medicare Part A covers part of the cost of a hospital stay. As long as you or your spouse has worked for 10 years or more in the United States, Part A is free. However, Part B (which covers preventative care) starts at $174.70 per month.

Everyone pays the minimum premium and depending on your income level, you may pay far more. The premium may increase every year. There are many other expenses that Medicare doesn't cover.

Many people also say that you should enroll in Medicare Part A as soon as you can because it's free. This makes sense—only if you don't have a high-deductible insurance plan. But with high-deductible health plans, you're typically eligible for an HSA.

As soon as you enroll in Part A, that disallows you—and your employer—from making contributions to an HSA. You also have to remove any contributions you'd made from the prior six months before enrolling.

I tackle a lot more myths you need to be aware of, so make sure you listen to the whole episode!

Resources Mentioned

• Retirement Readiness Review
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