Whether Medicare or otherwise, here are 5 things you need to consider when trying to help your senior parents find health insurance.
When a parent turns 65, they’ll face numerous decisions that’ll have a significant impact on their healthcare coverage throughout their golden years. Whether your senior parents ask for your help, there are several things you can do to support them. It’s not an easy topic to discuss, and it’ll involve having to talk to your parents about sensitive topics like their personal health and finances, but it’s crucial that they’re fully aware of all their options — Medicare or otherwise — before making a final decision.
There are many factors to consider when helping your senior parents find and choose the right health insurance. Their healthcare coverage options vary, with options provided by the government, insurance companies, and possibly employers — not to mention the numerous plans offered through each. Obviously, this can make choosing the right health insurance much more difficult than you think.
Here are five key things to consider when exploring options for your senior parents’ health insurance.
1. What Does Medicare Cover?
Original Medicare (the name for baseline Medicare coverage) provides insurance for Part A (inpatient hospital care, hospice, etc.) and Part B (physician office visits, preventive care, etc.). Prescription drugs (known as Medicare Part D), vision services, dental care, and hearing services are not covered by Original Medicare, but they are included in some Medicare Advantage plans. Seniors may also be able to buy coverage for these services separately through insurance companies.
2. What types of insurance are my parents eligible for and how do they get coverage?
If your parents are 65 or approaching 65, you will need to determine what type of plans they are eligible for.
At 65, if your parents have been permanent US residents or a citizen for 5 years and paid 10 years of Social Security taxes, they are eligible for Medicare. If they’re still working at a company with 20 or more employees and are covered by an employer or union-sponsored health plan, then they don’t need to do anything until they retire. If their company has less than 20 employees, they have to enroll in Medicare Part A and Part B, and Medicare is the primary payer. Seniors are automatically enrolled in Medicare once they begin receiving Social Security payments. If they are eligible but aren’t planning on getting money from Social Security, your parents should still sign up for Medicare once they turn 65 — provided that they don’t have coverage related to one or the other’s employment — to avoid any late enrollment penalties. They can use Medicare Advantage plans or Medigap policies in conjunction with Original Medicare to expand coverage.
Your parents can buy insurance from their state exchange if they aren’t eligible for Medicare. However, if they’re eligible, not enrolled, and elect to buy insurance through the exchanges, they won’t receive any tax credits. They can’t sign up for both Medicare and insurance through the health exchanges.
Private Health Insurance: It’s possible for seniors to buy insurance from a private health insurer. However, it’s likely the insurer will direct them to a Medicare-specific product, such as a Medicare Advantage plan or Medigap policy.
Your parents might still be working after they turn 65, or they could have a retiree health benefit. At the time they do retire, they can sign up during a special enrollment period and won’t be charged a late enrollment penalty. If your parents have retiree insurance, they have to enroll in Medicare Part A and Part B, as the coordination rules say Medicare is the primary payer. For any circumstance in which more than one plan is covering a person’s expenses, there is a coordination of benefits rule that determines which plan pays first.1
3. How much will my parents’ coverage cost?
A critical component in determining what plan to select for your parents is understanding the related costs. Medicare and plans issued through private insurance, including Medicare Advantage and Medigap, come with out-of-pocket expenses. Here are the questions you should answer:
- Premiums: How much will your parents have to pay on a monthly basis?
- Deductibles: What is the amount of money your parents must spend before their insurance plan payment kicks in?
- Coinsurance: Will your parents be responsible for a percentage of the cost of their health services?
- Copayment: Will your parents have to pay a flat fee for health services?
While some plans may have lower premiums that could save your family money in the short-term, significant health episodes can be costly if you choose a plan that has higher out-of-pocket expenses.
4. Which providers can my parents see?
By choosing only Original Medicare or a combination of Original Medicare and a Medigap policy, they can see any participating Medicare provider. Medicare Advantage plans are usually health maintenance organizations (HMOs) or preferred provider organizations (PPOs). With an HMO, your parents would need to see in-network providers. With a PPO, they could continue to see providers with whom they have a relationship. If those providers were out-of-network, they would likely pay more. However, your parents should know that networks can change with little notice. You should also understand what type of financial liability is associated with going out of network.
5. What is one way to cover out-of-pocket expenses for my parents?
Your parents may have contributed to a health savings account in the past. Those contributions can be a tax-free and penalty-free mechanism for covering some out-of-pocket expenses. Once they’re enrolled in Medicare, your parents aren’t eligible to contribute to an HSA, but they can still benefit from using the funds for approved medical costs.
Checklist of other things you can do to help:
- Ask your parents for a list of their doctors.
- Ask them about their health conditions and their approximate annual healthcare expenses. The answer to this will guide you towards the right level of coverage they need.
- Educate yourself on the different Medicare coverage options.
- If your parents are working or planning to work past age 65, get an idea of how long they’d like to continue working (and remind them that the clock ticks when they retire). Knowing this will help prevent them from missing some important coverage deadlines.
- Depending on whether they’re opting for Medicare Supplement or Medicare Advantage coverage, help them request quotes directly from individual insurance companies or reputable, licensed brokers.
- Review the coverage options presented. You might also want to compare the options presented from one source with a separate one.
- Once covered, remind them to take advantage of the preventive and screening services covered by Medicare.
It will take some time and research to select the best plan for your parents. Understanding coverage, eligibility, expenses, and networks will help you narrow down your choices and avoid unexpected costs to your family in the future.
The views expressed here are those of the author and do not necessarily represent or reflect the views of Healthcare, Inc. and HealthCare.com.