Many seniors admit they don’t know everything they should about Medicare before they turn 65. That’s not surprising considering all of Medicare’s rules and requirements. Even if they have a decent grasp of Medicare, most seniors realize there’s still more to learn when they’re ready to enroll.
Once enrolled, the Medicare journey is still far from over. Year after year, seniors need to shop plans to make sure they have the best coverage. Your aging parents may need your help preparing for Medicare and during their enrollment and yearly review.
Preparing your parents for Medicare
A big part of preparing your parents for Medicare involves budgeting. A common misconception among seniors is that Medicare is totally free. While Medicare Part A usually has a $0 premium, other parts of Medicare not only have premiums but also have cost-sharing expenses such as copays, deductibles, and coinsurance.
A great way to help your aging parents with Medicare is by assisting them with setting up health savings accounts, estimating their Medicare premiums, and putting together a budget so they know how much they can afford for a Medicare plan. If your parents aren’t eligible for a health savings account because they aren’t enrolled in a qualifying high-deductible health plan, then you all could look into different savings vehicles.
Estimating Medicare costs
Estimating their premiums is crucial to helping them prepare for Medicare. If one or both of them worked at least ten years and paid into Social Security, then they will both have premium-free Part A. However, while Part A’s premium is based on your parents’ work history, Part B’s premium is based on their income.
Depending on how they file their taxes, if they made less than $87,000 individually or $174,000 jointly in 2018, then they will pay the standard base premium for Part B in 2020, which is $144.60 per month. However, if they earned more than that, they will have a higher premium. Fortunately, you can help them appeal the higher premium if they have since retired and aren’t making that same higher income. Knowing your parents’ Part B premiums will help you budget for their Medicare plans.
Choosing Medicare plans
Your parents will enroll in Medicare Part A and Part B directly through the Social Security Administration. However, any Medicare plans they decide to buy need to be purchased through private insurance carriers. Plans that your parents can buy through private insurance carriers are Part D plans, Medicare Advantage plans, and Medicare Supplement plans. Note that each of your parents will need his and her own parts and plans; they can’t buy one policy to cover them both.
To help your parents choose a Part D drug plan, create a list of each of the medications they currently take. This will help you compare Part D plans based on their current prescriptions. The other plans that need to be researched are Medicare Advantage plans and Medicare Supplement plans.
Depending on each of your parents’ health and financial situation, one type of plan will be more attractive. To help your parents decide which type of plan will likely be more cost-effective for them, discuss their current health conditions, what type of doctors they see frequently, and the amount of premiums they are willing to pay for a specific type of coverage. Remember, just because a Medicare Advantage plan is right for your dad, doesn’t mean it’s best for your mom, or vice versa.
Shopping plans with your parent each year
Just because one plan is the most cost-effective option for your parents this year doesn’t mean that it will still be the most cost-effective next year. Doctors stop accepting plans, health conditions evolve, wants and needs change. Sit down during the Annual Election Period with your parents to review any changes in their current coverage to make sure it still suits.
The Annual Election Period is one of the few times you can change Medicare Advantage plans during the year, and the only time you can change Part D plans during the year. So take advantage of this period and set your parents up for another year of great coverage under Medicare.