Medicare is known for being complex so when a loved one becomes Medicare eligible or needs help managing their current coverage, coming up to speed can prove to be a challenge.
Whether you have a parent or relative enrolling in Medicare for the first time or you are helping a person who’s been on it for a while, it’s important that you learn the ropes and get well organized before you make any big decisions.
This is a quick, step-by-step Medicare checklist that can provide a good baseline of information to help you figure out where you need to dig deeper and ways you can offer support to your loved one.
Understand the Medicare ecosystem
- Part A covers inpatient care including hospital care, hospital stays, skilled nursing care, hospice, and limited home health care. Most people qualify for “premium-free” Part A if they have enough work history. However, Part A has other out-of-pocket costs, including a $1,408 deductible in 2020.1
- Part B is the medical insurance part of Medicare covering medically necessary services including doctor visits and fees, surgery, tests and durable medical equipment. This part is optional but should your loved one decide not to enroll at 65, they may have to pay a penalty if they enroll later. The premium is affordable, starting at $144.60 with a $198 annual deductible in 2020, and generally, around 20% coinsurance after they meet the deductible. It is important to note that there are no out-of-pocket limits on Part B.
- Medicare Advantage plans (Part C) are an alternative to Original Medicare that provide Part A and Part B services and may include additional benefits like prescription drug, vision and dental. These plans are offered by major healthcare insurance companies. However, the enrollee will still have to pay their Part B premium if they enroll in a Medicare Advantage plan. HMO plans are the most common types of Medicare Advantage plans but there are also PPOs (preferred provider organizations) and SNPs (special needs plans), among others.
- Part D or Prescription Drug Plans are standalone private drug plans that can be used with Original Medicare or a Medicare Advantage plan without drug coverage. The average premium is $41 in 2020 and deductibles are capped at $435.
- Medicare Supplement or Medigap is private insurance that can help cover some of the gaps left by Medicare. A Medigap plan can help pay for some of the out-of-pocket costs that Original Medicare (Part A and Part B) doesn’t pay for, such as deductibles, copayments, and coinsurance.
Prepare for enrollment by knowing the deadlines
- The Initial Enrollment Period for Medicare Parts A and B are for the three months before the enrollee’s 65th birthday, the month of their birthday and the three consecutive months after their birthday. If they choose not to enroll during this time, they may have to pay a penalty should they wait too long to enroll at a later date.
- Deferring Medicare enrollment: Your loved one may be able to defer their Medicare coverage if they are not receiving Social Security benefits four months in advance of their birthday and have an employer-sponsored plan that includes prescription drug coverage from a company with twenty or more employees. It is recommended to check with the employer before deferring coverage. If you stay with an employer-based plan, you’ll typically qualify for a Special Enrollment Period (SEP) when you’re ready to sign up for Medicare. You can sign up for Medicare at any time while you have employer-based coverage and will have an additional eight months to sign up for Medicare when your employer-based coverage ends.
- If you want to make changes to your Medicare or Medicare Advantage plan, you can do so during the Annual Enrollment Period that starts on October 15 and ends December 7 each year.
Create a list of medications, doctors and equipment that your loved one uses
- Becoming familiar with the amount of medical care and medications your loved one requires will be an important part of helping them evaluate their various coverage options. When consulting with a licensed insurance agent, always make sure they are aware of your provider preferences, necessary medications and other healthcare information.
Learn more about their current healthcare plan
- Your loved one may already be using a Medicare plan or could be using an employer sponsored plan – either way, it’s important to understand their current coverage. This will make next steps more intuitive and enable to you act quickly should something that requires your attention come up. Collecting documentation including insurance cards (there may be more than one) will also be helpful during this step.
Make sure to submit an “Authorization to Disclose Personal Health Information” form
- On occasion, you may need to contact Medicare on behalf of your loved one. To do this, they must grant you permission via the “Authorization to Disclose Personal Health Information” form that you submit in the mail. You can find that form here.
Have an honest discussion about cost vs. peace of mind
- The great news about Medicare is that there are many coverage options available for people with different needs. Making a plan selection can become easier when you work with your loved one to prioritize what’s most important to them and take the state of their health, lifestyle and budget into consideration.
- A few things to consider after having this discussion:
- Original Medicare (specifically Medicare Part B) typically covers about 80% of healthcare costs with no out-of- pocket max which can add up if your loved one has frequent healthcare needs. This may be important to consider if your loved one feels they may need more healthcare than they have before or if planning around unexpected medical events is something you both agree is important.
- Medicare Advantage plans offer an annual out-of-pocket maximum, which Original Medicare by itself doesn’t have. It is capped at $6,700, but many plans offer a maximum out-of-pocket lower than that. Once you reach your annual out-of-pocket maximum, your plan will pay 100% of covered Part A and Part B costs for the remainder of the year. This may provide peace of mind for your loved one.
- With Medicare Supplement Insurance, you pay an additional monthly premium for coverage that can help you avoid some surprise out-of-pocket costs. When evaluating a Medicare Supplement option, the balance of peace of mind and costs will be especially important to consider.
Catches for people who already have plans
- Seek annual policy quotes: Every year the Annual Enrollment Period starts October 15 and is an opportunity to reevaluate their prescription drug plan or Medicare Advantage plan. It helps to review any changes in their budget or healthcare needs. If you have a Medicare Supplement Insurance policy, you can evaluate their options at any time – just keep in mind that medical underwriting may affect your loved one’s new premium or their ability to get a new plan.
- Organize and review paperwork and bills: Once you take over a loved one’s healthcare, you may have to contend with multiple insurance cards, confusing bills and a variety of prescriptions to keep track of. Putting together a filing system may prove to be extremely helpful when faced with the need to appeal a charge, ask questions about plan coverage and making changes to coverage as necessary.
- Update their medication and provider list annually: During the Annual Enrollment Period, you may have the opportunity to update or change your loved one’s medical coverage. Just as you would during the Initial Enrollment Period, it makes sense to have a full picture of your loved one’s healthcare needs.
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