5 Tips to Help Your Parents Get the Medicare Coverage They Need
October 14, 2014 | Home and Family
Health insurance coverage matters to most people, but it’s especially important as we grow older. If a parent or aging loved ones are approaching age 65, they will soon be eligible for Medicare. To help ensure they make the best use of this crucial federal insurance program, it might pay for you to learn about Medicare at the same time they do. That way, you may be able to help them make the best choices for their needs. Here are five essential tips to get started.
1. Know the ABCs—and D. Medicare is divided into four parts according to the coverage each provides.
- Part A helps pay for hospitalization, some skilled nursing facility and home health care, and hospice. Medicare Part A is provided free to your parents if either of them worked and paid Social Security taxes for at least 10 years. If not, they can buy Part A coverage for a yearly premium.
- Part B helps pay for doctors’ services, outpatient hospital care, and some home health care. It also provides coverage for lab tests, physical and occupational therapy, and many screenings and preventive services, including annual wellness visits. A monthly premium is charged for Part B coverage. Together, Parts A and B (often referred to as Original or Traditional Medicare) typically pay a significant portion of many seniors’ medical expenses.
- Part C, also known as Medicare Advantage, consists of Medicare-approved plans offered by private insurance companies that deliver Medicare Part A and Part B coverage in one package. Some of these plans also provide Medicare drug coverage. They also may cover additional services that Traditional Medicare (Parts A and B) does not pay for, such as coverage for vision and hearing care.
- Part D is a Medicare prescription drug benefit plan. People eligible for Medicare may purchase a Part D prescription drug plan through a private insurance company in the state where they live, or coverage may be included as part of a Medicare Advantage plan. Plans vary and cover different drugs, but all medically necessary drugs are covered.
2. Watch Out for Gaps. While Traditional Medicare (Parts A and B) pays most of the normal health care costs your parents will need, it doesn’t cover everything. For this reason, some retirees look to Medicare supplemental insurance, commonly referred to as Medigap insurance, to provide reimbursement for some or most of the out-of-pocket expenses Traditional Medicare doesn’t pick up. These may include Part A costs, such as the hospital deductible ($1,216 in 2014 for each hospital benefit period) and/or the 20 percent portion of doctors’ charges not covered under the plan. Medigap policies are offered by private insurance companies. To simplify the process of finding the right plan, Medicare.gov has a handy tool that enables you to compare plans in your parents’ area and estimate the out-of-pocket costs for drugs and other expenses.
An important note: Many people confuse Medigap and Medicare Advantage plans. Medigap is designed to supplement Traditional Medicare; Medicare Advantage is designed as an alternative to Traditional Medicare. For this reason, Medigap can be used only by people enrolled in Original Medicare.
3. Allow Enough Time. Getting basic Medicare coverage is easy: Everyone receiving Social Security benefits at age 65 is automatically enrolled in Medicare Part A and will qualify for Part B. However, if your parents are age 65 and not yet collecting Social Security, they will need to initiate the enrollment process themselves, either by going online to Medicare.gov or by calling or visiting their local Social Security office.
Be aware: Medicare has specific enrollment periods, so don’t wait. The Medicare Initial Enrollment Period (IEP) is your parents’ first window for signing up. That seven-month period begins three months prior to the month they turn 65, includes the month they turn 65, and ends three months after the month they turn 65. Miss this window and they’ll have to wait until the next General Enrollment Period (between January 1 and March 31 each year) to enroll and until July 1 for coverage to begin. Late enrollers may also be subject to a higher premium for Part A and/or a higher premium for late enrollment in Part B. There’s an exception to this rule: If one or both of your parents do not sign up for Medicare at age 65 because they are still working and are receiving their health care coverage from an eligible employer, they have an eight-month Special Enrollment Period to enroll (without penalty) once they quit working or their group health plan ends, whichever comes first.
4. Beware the “Donut Hole.” Medicare prescription drug plans have a “donut hole,” a coverage gap in which your parents may be required to pay the full cost of their medications (less any available discounts) for a time, even while they continue to pay premiums. In 2014, the donut hole starts when your parent’s total drug costs reach $2,850 ($2,960 for 2015) and continues until out-of-pocket costs reach $4,550 ($4,700 for 2015). After that, your parents’ drug plan will kick in again and pay most of the cost of covered drugs for the remainder of the year.
5. Don’t Set It and Forget It. Your parents’ health care needs are likely to change over time; so will the cost and level of each of their plan options. That’s why it’s important to review these options annually to ensure your parents continue to have the right level of coverage to meet their needs. If a change is warranted, your parents can switch their coverage once a year during open enrollment.
Remember, you don’t have to be a Medicare expert to help your parents. You can always visit Medicare.gov or call Medicare at 800-633-4227. The website will point you to helpful information and free resources that can help you and your parents compare Medicare plans, providers and options. Keep in mind, if you’re calling Medicare on your parents’ behalf, they’ll need to fill out a Medicare Authorization to Disclose Personal Information form so that a Medicare representative can speak to you directly.
Finally, if you’re taking charge on your parents’ behalf, be sure to involve them in the process. Together, you’ll be able to help ensure your parents secure the health benefits they need and deserve.