10 Costly Healthcare Mistakes Retirees Make and How To Avoid Them

Retirement should be a time of comfort and minimal stress, especially when it comes to managing health and wellness. However, healthcare costs in retirement can quickly become a significant burden if not carefully managed, potentially derailing even well-thought-out retirement plans. As retirees transition from a steady income to relying on savings, pensions, and Social Security, understanding the intricacies of Medicare, long-term care, and unexpected medical expenses is crucial.

This guide highlights common missteps retirees make regarding their healthcare, with practical advice on how to avoid these potentially costly errors. By planning wisely, you can safeguard your finances against the high costs of health care in retirement, ensuring that you maintain both your health and financial independence during your golden years.

• Mistake: Many retirees miss their initial enrollment window for Medicare, which can lead to lifetime penalties and coverage gaps.
• Avoidance: Mark your calendar for the enrollment period three months before and after your 65th birthday. Review your needs annually during the open enrollment period.

• Mistake: Selecting a Medicare plan without comparing all available options can result in overpaying for benefits you don’t need, or missing out on necessary coverage.
• Avoidance: Evaluate your health needs, medication costs, and preferred healthcare providers before choosing a plan. Use tools like the Medicare Plan Finder to compare plans annually.

• Mistake: Many retirees assume that Medicare will cover long-term care costs, which it generally does not.
• Avoidance: Consider purchasing long-term care insurance or explore alternative strategies like hybrid life insurance plans that include long-term care benefits.

• Mistake: Sticking with the same prescription drug plan without shopping around can cost more if drug formularies change.
• Avoidance: Review your Part D coverage during each open enrollment period to ensure it still covers all prescribed medications at the lowest possible cost.

• Mistake: Skipping preventive care visits and screenings can lead to higher health costs later.
• Avoidance: Take full advantage of free preventive services offered by Medicare, such as annual wellness visits and screenings.

• Mistake: Not budgeting for out-of-pocket costs can lead to financial strain, as Medicare does not cover everything.
• Avoidance: Set aside funds for copays, coinsurance, and deductibles. Consider a Medigap policy to help cover these costs.

• Mistake: Those with multiple insurance policies fail to coordinate benefits, which can lead to denied claims or overpayment.
• Avoidance: Inform all insurance providers about your other coverages to ensure benefits are coordinated properly.

• Mistake: Retirees sometimes drop employer or union coverage without understanding the implications.
• Avoidance: Before dropping any employer-provided health insurance, understand how it interacts with Medicare and assess which coverage scenario best suits your needs.

• Mistake: Medicare does not typically cover vision and dental care, leading some retirees to neglect these areas.
• Avoidance: Consider additional insurance for vision and dental care or use community resources like dental schools for more affordable services.

• Mistake: Many retirees are unaware of the assistance programs available to help manage healthcare costs.
• Avoidance: Research state pharmaceutical assistance programs, and federal programs like Extra Help with Medicare prescription drug costs.

Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.