Medicare is complicated, so it’s no surprise that nearly 75% of adults over age 50 say they wish they understood the coverage better, according to a recent survey by the Nationwide Retirement Institute. What you don’t know can cost you.

Dig deeper into the results and it’s revealed that 53% of older adults don’t know there’s a cost associated with Medicare Part B. In fact, beneficiaries pay a monthly premium for Part B, which covers outpatient services like doctor’s visits.

Anybody prepping for retirement should also understand that Medicare will not
cover your long-term care costs. The government administered program covers
nursing home care only for rehabilitation and other limited circumstances. It
doesn’t pay for the kind of long-term care that most elderly Americans need,
which is help with activities of daily living like bathing, dressing, and eating.

That said, for people who have spent down their money and meet strict asset and income criteria that vary by state, Medicaid will cover long-term care costs. Some 42% of affluent older adults with children say they would give away all their money to their kids so they can go on Medicaid, according to the Nationwide survey.

There are a couple of problems with this strategy. For starters, Medicaid has a five year “look back” period in which the government can scrutinize all your financial transactions for 60 months leading up to your Medicaid application. Generally, the government will be paying particular attention to gifts made to anyone other than your spouse. Second, you don’t have the final say over your care when you go on Medicaid, and most retirees report a desire to maintain control over their circumstances.

Bottom line? Understanding Medicare costs can help you devise a more realistic
retirement budget. Learn more about Medicare and its nuances through the
government’s official handbook, available online at Medicare.gov.