Over half of America's middle-income baby boomers admit to knowing little or almost nothing about the Medicare program. At the same time, one in seven boomers mistakenly believe Medicare is free, according to a test study released by the Bankers Life and Casualty Company Center for a Secure Retirement (CSR).

The CSR's Retirement Healthcare for Middle-Income Americans Study of 400 pre-Medicare Boomers ages 47 to 64, and 400 older adults ages 65 to 75 with income between $25,000 and $75,000, found that nearly three quarters of those surveyed didn't know that most Americans on Medicare pay a monthly premium, co-pays and deductibles.

Moreover, the study indicated an estimated 62 percent of boomers, even those who are within a few years of turning 65 years old, don't understand how their health insurance benefits will be figured in for doctor visits and hospitalization once they're on Medicare. In addition, an estimated 27 percent couldn't venture a guess on how much they think they will pay for healthcare once they're on Medicare versus to what they pay today.

According to the study, the majority of boomers cite uncovered healthcare expenses (80 percent) and becoming ill as their top financial concerns in retirement, many appear to be taking a "learn as you go" approach to understanding Medicare's coverage and costs by waiting until they are using the program to investigate how it works.

The study also indicated that over three quarters of pre-Medicare age boomers queried don't understand their benefits for dental care (78 percent), hearing care (82 percent) and vision care (83 percent), all services typically not covered by Medicare.

In addition, the survey findings indicated that eight in ten boomers under age 65 don't know if Medicare covers long-term care or overestimate its long-term care coverage. Boomers nearing Medicare eligibility - age 60 to 64 - didn't show a significantly greater understanding of how Medicare works than boomers between the ages of 47 to 59.

The Bankers Life and Casualty Company Center for a Secure Retirement is a research and consumer education program that provides insight and practical advice for how everyday Americans can achieve financial security during retirement.  It's Retirement Healthcare for Middle-Income Americans Study was conducted in September 2011 by the independent research firm The Blackstone Group. The complete report can be viewed at www.CenterForASecureRetirement.com

For many boomers, retirement waits for Medicare. But boomers under age 65 are taking Medicare eligibility into consideration in greater numbers when determining when to retire. An estimated 45 percent of working boomers ages 47 to 64 say they are waiting to retire until they are eligible for Medicare and 24 percent say they're still not decided if they would retire without the safety net of Medicare's health benefits.

The decision to wait to retire until they are eligible for Medicare may be financially sound since medical bills are one of the leading causes of bankruptcy among people age 65 and older. The CSR study reports that 12 percent of middle-income Americans on Medicare are living with medical debt.

"Minimize financial surprises by understanding your retiree health insurance benefits well in advance," said Chris Campbell, vice president of strategic marketing and business development for Bankers Life and Casualty Co.

Campbell recommends those boomers who are now on or reaching Medicare eligibility estimate their financial responsibility 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 advisor who is well-versed in Medicare for guidance," Campbell said.