You may find yourself assisting your parents with their Medicare enrollment. Medicare can be an overwhelming program to learn, so giving yourself enough time to research and prepare will benefit you. It is hard to know where to start, what to do to get to know Medicare, how it works, and the different rules. However, here is a guide that you can follow as you help your parents prepare for Medicare.
Step 1: Learn if they are eligible for Medicare
First, you will want to learn if they are eligible for Medicare. If they are U.S. citizens or have been permanent residents for at least five years, they will be eligible for Medicare at age 65.
Additionally, they could qualify for Medicare early due to disability. If they have been receiving Social Security Disability Income for at least 24 months, have Amyotrophic Lateral Sclerosis, or End-Stage Renal Disease and need a transplant or dialysis, they will qualify for Medicare before 65.
Step 2: Learn when they should apply for Medicare
Every eligible beneficiary has a seven-month window to apply for Medicare. This window is called their Initial Enrollment Period (IEP) window, which starts three months before their 65th birthday month and ends three months after. They can apply for Medicare Part A and Part B during that window. When they apply three months before, their benefits will start on the 1st of their 65th birthday month. However, if they apply during the last three months, their coverage will be delayed, so the best time to apply would be before their birthday month.
They can apply for Part A and Part B through Social Security’s website or they can call Social Security directly.
If they are already receiving Social Security benefits at least four months before their 65th birthday month, they will be automatically enrolled in Medicare. Their benefits would begin the 1st of their 65th birthday month.
Do They Plan on Working Past 65?
If they plan on working past 65 and they actively work for a large employer with more than 20 employees, they can delay their Medicare benefits past 65 with no penalty. Large employer insurance is considered creditable for Medicare, and therefore, they will not be penalized for delaying Medicare. If they would like to enroll in Medicare while working, the large employer insurance will be primary, and Medicare will be secondary.
If they work for a small employer with less than 20 employees and have that insurance, they will need to enroll in Medicare during their IEP. Medicare will be their primary insurance, and the employer coverage will be secondary.
Step 3: Learn the Costs of Medicare
Suppose your parents have worked at least 40 quarters or ten years in the U.S. In that case, they will qualify for premium-free Part A, which means they will not have a monthly premium for Part A. If they worked less than 40 quarters, they would have a monthly premium, and the amount will depend on how many quarters they worked.
However, every beneficiary must pay for Medicare Part B. The standard monthly Part B premium is $170.10 in 2022. The Part B premium is based on income, so if they have a higher income, they could pay an additional amount for Part B. This amount is called the Income Related Monthly Adjustment Amount (IRMAA). If they are subject to IRMAA, Social Security will notify them when they are approved for Medicare Part B.
The Part B premium will be deducted from their Social Security check each month. However, if they aren’t receiving Social Security benefits when they start Medicare, they will be billed quarterly for the Part B premium.
Step 4: Learn about Medicare’s Coverage
Medicare is made up of two parts. There is Part A which is hospital coverage, and Part B, which is outpatient medical coverage. However, Medicare does not cover all healthcare services in full. There are still deductibles, copays, and coinsurance your parents must pay. For example, the Part A deductible is $1,556 in 2022, and there are copays for inpatient hospital stays, skilled nursing facility stays, and more.
Additionally, there is an annual Part B deductible of $233 this year. Once they meet that deductible, Medicare will only cover 80% of the cost of Part B services such as doctor visits, x-rays, physical therapy, surgeries, and more. Since there isn’t a cap to Medicare’s expenses, they will pay 20% coinsurance on Part B services with no limit.
What Other Plans Will They Need?
Since Medicare does not cover all costs at 100%, they may consider enrolling in additional plans to help with those costs. For example, they can enroll in a Medicare Supplement plan and pair it with a Part D plan. The Medicare Supplement will be secondary to Medicare Part A and Part B and help cover the deductibles, copays, and coinsurance. The Part D plan will be their prescription coverage because Medicare does not cover medications.
The other option is a Medicare Advantage plan. They must still be enrolled in Part A and Part B, but they would be receiving their Medicare benefits through their Advantage plan. These plans have low premiums, a network of providers, and copays/coinsurance for services. They can include drug coverage and dental, vision, hearing, gym memberships, Part B reimbursement, and more.
When Would They Apply in These Plans?
They have six months from their Part B effective date to enroll in a Medicare Supplement plan with no health questions asked. When they are outside that window, they may need to answer health questions to apply.
If they enroll in Medicare during their IEP, they can enroll in a Part D or Advantage plan during that same seven-month window.
If they are delaying Medicare past 65, they will have a two-month window to enroll in a Part D or Advantage plan once they lose employer coverage.
The way Medicare works can be very different from the employer coverage they’ve had over the years. However, many resources can help simplify this information. You will want to start your preparation about three to six months before they turn 65. That will give you plenty of time to determine when they should enroll and what additional plans are available to them. You can contact a reputable Medicare broker for assistance with their enrollments.