Most middle-income baby boomers admit they don't know much about the Medicare health insurance program, according to a new study by the Bankers Life and Casualty Company Center for a Secure Retirement.
More than half, 56 percent, said they knew little or almost nothing about the program, and 13 percent said they thought Medicare was free.
The study polled 400 people ages 47 to 64 and 400 older adults ages 65 to 75. Americans become eligible for Medicare at age 65.
Almost three-quarters, 72 percent, did not know that most people on Medicare pay premiums, co-pays and deductibles for the federal medical insurance program. More than one-quarter of respondents, 27 percent, could not guess how much they would pay for health care via Medicare versus what they pay today.
The study also revealed misunderstandings about what Medicare covers. Among those under 65, 86 percent did not know whether Medicare covered long-term care, or they overestimated Medicare's coverage of long-term care.
Medical bills are among the leading causes of bankruptcy for people 65 and older.
"Minimize financial surprises by understanding your retiree health insurance benefits well in advance," Chris Campbell, vice president of strategic marketing and business development for Bankers Life, said in a press statement. "Estimate what your financial responsibility is under Medicare, including premiums, co-pays, deductibles and uncovered expenses, in particular, long-term care. Earmark a portion of your savings or income for retirement and consider speaking to a professional adviser who is well-versed in Medicare for guidance."
The Blackstone Group conducted the study in September 2011 for Bankers Life.