Premium costs. Most retirees don't pay a premium for Medicare Part A hospital insurance. The standard premium amount for Medicare Part B medical insurance is $104.90 per month in 2013, but retirees who earn more than $85,000 ($170,000 for couples) pay higher premiums

Other out-of-pocket expenses. Just as with private health insurance, Medicare has deductibles, copays and coinsurance. The Part B deductible is $147 in 2013, after which Medicare typically pays 80 percent of the Medicare-approved amount of the service. There's no annual limit on what you might need to pay out-of-pocket

Supplemental coverage. It's difficult to predict how much your out-of-pocket costs will be with traditional Medicare, so many retirees supplement their Medicare coverage with a Medicare Advantage or Medigap plan. These plans charge an additional premium, but fill in many of Medicare's cost-sharing requirements and sometimes cover additional services that traditional Medicare doesn't cover.

Free physicals. You can get a free "welcome to Medicare" preventative care doctor's visit during the first 12 months that you have Medicare Part B, which generally includes a review of your medical history and recommendations about preventative care. Once you've had Medicare for a year, you become eligible for annual wellness visits to a doctor to make a personalized plan to prevent disease.

Free preventative care. Many preventative services are now covered without deductible or other cost-sharing requirements, due to provisions of the Affordable Care Act, including bone mass measurements and breast cancer screenings. But additional costs could be charged if a problem is found. For example, colonoscopies are covered at no cost, but if a polyp is found and removed during the colonoscopy, you may then have to pay 20 percent of the Medicare-approved amount for the doctor's services and/or a copayment to the medical facility.

How to pick a Part D plan. Retirees get to choose a new Medicare Part D prescription drug plan each year during an annual enrollment period from October 15 to December 7. It's a good idea to shop around for a new plan even if you're happy with your current coverage because premiums, covered medications, out-of-pocket costs and the plans offered change each year.

What is not covered? There are a variety of medical services commonly used by older people that Medicare doesn't cover, including routine dental or eye care, dentures and hearing aids. Medicare also does not cover extensive long-term care in a nursing home or assisted living facility.

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