Financial Decisions; Help Your Parents Navigate Medicare Costs

Medicare Benefits Solutions

May 30, 2022

Are you asking yourself: “How can I get Medicare for my parents?” If one or both of your parents are reaching retirement age, the decisions they make as they prepare for retirement can greatly affect their financial security and lifestyle, now and in the future.

Is navigating Medicare costs new to you or your parents? You may spend time comparing all the different plans to help them decide which options will save them money while still offering the benefits they need.

Understanding how Medicare premiums, co-payments, and coinsurance can impact your parents’ budget will help you make informed decisions.

TIP: Continue reading to understand if basic Medicare coverage is enough for your parents and help them make smart financial decisions when navigating Medicare costs.

Help Your Parents Make Medicare Enrollment Decisions

For anyone approaching eligibility for Medicare coverage, the experience of navigating Medicare is quite an education. Considering the rising costs of healthcare, Medicare decisions should be an integral component of your parents’ retirement planning. It’s important to balance access to medical services and medications with affordable premiums and minimal out-of-pocket medical expenses.

TIP: To get the most out of your parents’ health insurance plan, read our Medicare Basics guide.

How Medicare Works

Medicare covers inpatient and outpatient medically necessary services for people who are 65 years of age or older, or for individuals who qualify under the age of 65 due to certain disabilities.

With few exceptions, Medicare excludes coverage for healthcare outside the U.S. When you become eligible for Medicare, you’ll have decisions to make, including which benefits you want to enroll in, and how you want to receive those benefits.

TIP: Avoid these 10 mistakes when signing up for Medicare Advantage.

Understanding the Four Parts of Medicare

  • Part A, Original Medicare hospital insurance
  • Part B, Original Medicare medical insurance
  • Part C, Medicare Advantage, private insurance
  • Part D, Private add-on prescription drug coverage

Please note: If you are interested in speaking with a Licensed Sales Agent to explore your parent’s Medicare options, they will first need to fill out a Medicare “Authorization to Disclose Personal Health Information” form. You can download a .pdf version of the form on the Centers for Medicare & Medicaid Services website.

Part A Original Medicare Hospital Insurance

Part A covers healthcare services you get as an inpatient in a hospital, skilled nursing facility (SNF) and hospice. Home health services are covered by both Part A and Part B. Part A falls under the umbrella known as Original Medicare, which is a program provided by the federal government. You can sign up for Original Medicare (Parts A & B) through the Social Security Administration once you are eligible.

Part B Original Medicare Medical Insurance

Part B covers doctor office visits, outpatient care, durable medical equipment and some preventive services. Part B also includes coverage for home health services. Part B is also part of Original Medicare which is provided by the federal government. Once you are eligible you can sign up for Original Medicare (Parts A & B) through the Social Security Administration.

Part C Medicare Advantage

Medicare Advantage, otherwise known as Part C, is an alternative to Original Medicare. You will continue to be a Medicare member, but most of your Medicare coverage will come from your MA plan. These plans are offered by private insurers.

Most MA plans include Part D, so if you like the idea of having Parts A, B and D under one plan, look for an MA plan that covers prescription drugs. Medicare Advantage members also enjoy some benefits and services that extend beyond Original Medicare while being assured of coverage for the same medically necessary services you get with Original Medicare. Some MA plans are available with no premium.

There are several types of MA plans with varying levels of coverage, premiums, deductibles, coinsurance and copayments. Depending on the type of plan you choose, there may be restrictions, such as provider networks and referral requirements. With Original Medicare, you can visit any doctor or medical facility in the country that accepts assignment. Some beneficiaries prefer to keep their Original Medicare and add a Medicare Supplement plan.

Part D Add-on Prescription Drug Coverage

Part D is an optional add-on to Original Medicare (Parts A & B) and is offered by private insurance companies. Many Medicare Advantage plans include prescription drug coverage, along with other extra benefits.

To get Medicare coverage for your prescription medications, enroll in Medicare-approved drug coverage. There are two ways to accomplish this:

1. Join a stand-alone Medicare Prescription Drug Plan, which adds Part D to Original Medicare. Before you enroll, you must join either Part A, Part B or both.

2. Join a Medicare Advantage (MA) plan or another type of Medicare health plan inclusive of drug coverage. Before you enroll in an MA plan, you must join both Part A and Part B.

Part D does not cover over-the-counter (OTC) products. However, some Medicare Advantage plans cover an OTC allowance for merchandise like vitamins and personal care items.

Medicare Supplement Plan

Medicare Supplement insurance often referred to as Medigap, is another add-on to Original Medicare. Like MA, Medigap is sold by private insurance companies. Medicare Supplement plans are standardized throughout the U.S., and they offer a solution to concerns about out-of-pocket expenses. People new to Medicare after January 1, 2020, have eight plans to choose from. Some plans offer benefits Original Medicare does not cover, but premiums can vary based on the coverage.

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How to Help Your Parents Enroll in Medicare

Enrollment in Part A and Part B is automatic for anyone turning 65. Automatic enrollment can also apply to people under 65 who have a disability. If your parents are getting Social Security Disability Insurance (SSDI) benefits and have amyotrophic lateral sclerosis (ALS), Part A and Part B enrollment will kick in the month their SSDI benefits begin.

If they are not eligible for automatic enrollment, they can sign up for Part A and Part B through Social Security by phone or online. The best time to enroll is during their Initial Enrollment Period which begins three months before their 65th birthday and ends three months after their birthday month. If they miss this window, they may be subject to a late enrollment penalty, raising their cost of Medicare premiums.

TIP: Try our handy Medicare plan finder to help you compare plans side-by-side.

Making Medicare for Elderly Parents Coverage Decisions

If your elderly parents are still employed, you may be wondering if they should apply for Medicare. Though they may be eligible for a Special Enrollment Period based on their group plan coverage, they should contact their employer to ask how their group coverage would work with Medicare. They may be able to have coverage under a group or retiree health plan and Medicare.

If they have a Health Savings Account (HSA) and contribute to their HSA while they have Medicare, a tax penalty can be imposed. Therefore, make sure their final contribution is the month prior to the Part A effective date.

Many people who are still working at 65 and qualify for premium-free Part A will enroll in Part A but delay Part B and Part D enrollment if they have other creditable coverage. In this case, they may be eligible for a Special Enrollment Period when their employment ends.

Help Your Parent’s Prepare for Medicare

Navigating Medicare is easier with online resources and Medicare plan comparison tools. If you are feeling concerned about helping your elderly parents make such an important decision, it may help to know that they can change their Medicare coverage at certain times during the year.

During the Annual Enrollment Period each year, between October 15 and December 7, your mom or dad can join, switch or drop an MA plan or Medicare Prescription Drug Plan. They can also revert to Original Medicare at that time and enroll in a Part D plan.

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