Unfortunately, getting sick and suffering from chronic conditions can cost lots of money and become incredibly confusing to sort through. Medicare helps with this process by covering many related healthcare costs and providing a wide range of care at hospitals, doctor’s offices, nursing homes, and more.
So how does an elderly person capitalize on this? Let’s discuss how you can help a loved one enroll in Medicare, starting with what Medicare is and working our way through what plan to get them, when you can enroll them in Medicare, and how to pay for the remaining costs.
What Is Medicare?
Medicare is a federal healthcare program developed in the 1960s under the Social Security Administration with the goal of assisting elderly Americans with their healthcare costs and needs.
Those Americans who qualify for Medicare are:
- Age 65 and older
- Under the age of 65, disabled, and collecting Social Security Disability Insurance
- Under the age of 65 and suffering from end-stage renal disease (kidney failure)
As of July 2018, Medicare covers more than 57 million Americans, most of whom are elderly people. The government spent over $700 billion on Medicare in 2017, and if that number stays about the same or increases slightly for 2018, that amounts to spending roughly $13,000 per person.
Medicare coverage is split into four main parts—A through D. They cover various parts of your loved one’s healthcare needs, like hospital costs and prescription drugs, at different prices, so let’s dig into what each section means for your loved one’s coverage.
Part A of Medicare covers inpatient healthcare costs. These include:
The services included in stays as hospitals (acute care, inpatient rehab, long-term care, critical access) are general nursing, supplies needed to help your condition, meals, drugs used for your in-patient care, a semi-private room, and more.
Skilled Nursing Facilities:
These facilities provide round-the-clock skilled nursing care to help rehabilitate your loved one back to health. People who stay at these facilities can receive physical, speech, and occupational therapy, all of which need to be part of a recovery plan prescribed by a doctor. Medicare also covers semi-private rooms, meals, medications, ambulance transportation, and more.
This care focuses on the end of one’s life, such as those who are terminally ill. This care can be done at the home or a hospice care facility. Medicare covers almost everything involved in the hospice process, including transportation, doctor care, and medication.
Home Health Care:
This care is performed by skilled nurses at the home (this doesn’t include living at a nursing home) and your loved one’s condition must have a set plan for improvement in order for Medicare to cover the services. This don’t cover round-the-clock care at home, but they do cover skilled nursing sides who can administer therapy and assist in the improvement of your loved one’s condition.
Long-term care like nursing home living is not covered by Medicare.
There is no monthly premium for Part A of Medicare in most cases, meaning there is no set rate for the out-of-pocket costs paid every month whether your loved one uses the services or not. This is why just about every single person who gets Medicare receives at least Part A.
However, there is a yearly deductible for hospital services—$1,340, as of 2018. Once this is reached, hospital costs are covered for the first 60 days. There is then a $335 coinsurance fee for each of the next 30 days your loved one remains in the hospital beyond the first 60. That coinsurance cost doubles to $670 per day for every “lifetime reserve” day used after 90. There are 60 available throughout one’s life. After the lifetime reserve is depleted, your loved one is responsible for all the hospital costs for the remainder of the year.
Each stay in a hospital is called a “benefit period,” which resets once your loved one is out of the hospital for 60 days. For instance, if he gets sick and has to stay in the hospital for 30 days, leaves the hospital and doesn’t return for overnight stays for over 60 days, then returns for another 40 days, all the costs will be covered (aside from the deductible for each period). There are two benefit periods in this example.
Part B covers preventive services that help diagnose or treat a condition and medically necessary equipment. This includes services like:
- One yearly wellness check up a year
- Visits to a primary care physician or specialist that help diagnose or treat an illness or condition
- Walkers, knee braces, lift chairs, and other medically necessary durable equipment
- Ambulance services
- Second opinions
- Involvement in clinical research
- Outpatient mental health services like a psychiatrist or clinical psychologist
As of 2018, the Part B monthly premium is $134, though this may drop a few dollars per month if your loved one has cashed in on their Social Security benefits.
In addition to what it covers, Part B differs from Part A because there is a monthly premium. This is why not everyone who gets Medicare is enrolled in Part B, though more than 90 percent of Medicare recipients have both parts A and B.
As of 2018, the Part B monthly premium is $134, though this may drop a few dollars per month if your loved one has cashed in on their Social Security benefits. There is also a yearly deductible for Part B ($183/year). Your loved one may also have copayments for many of their doctors’ visits.
Once they reach the deductible, they become responsible for 20 percent of the Medicare-approved costs for “most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment,” according to the Medicare site.
Combined, parts A and B are known as Original Medicare.
Private companies are contracted by Medicare to also offer coverage. These plans are known as Medicare Advantage plans and they combine all the coverage of parts A and B of Medicare under one roof. They also offer additional coverage such as:
- Prescription drugs
All of this coverage is combined under one plan. Medicare Advantage plans typically have one monthly premium and often a yearly deductible that is paid to the private company. Your loved one will have to pay the monthly premium for Part B ($134) as well.
Part C is an all-inclusive plan with a private insurer to cover one’s Medicare needs. Your loved one may prefer this route for different reasons, including because it could offer a wider array of doctors in the area.
Part D covers prescription drug costs. While it’s a part of Medicare, all prescription plans are acquired through a private insurance company. As a result, the cost for prescriptions is largely up to the discretion of the insurer.
Many insurance companies use a tiered system. This means that the more prescription drugs covered on a plan, the higher the monthly premium. Premiums for prescription plans range from $0 to a few hundred dollars, and the monthly average is around $34.
While it covers a lot of your loved one’s health care costs, Medicare doesn’t make it all free. There are plenty of copayment, coinsurance, deductible, and premium costs that can add up over the year. On top of that, your loved one is responsible for 20 percent of Medicare-approved costs under Part B after the deductible is reached.
All of these costs could be covered under one payment by acquiring a supplemental insurance plan known as Medigap. These plans cover all the payments that Medicare doesn’t. They may also cover costs Medicare doesn’t touch at all, like travel insurance.
Medigap plans typically come with one monthly premium that helps supplement other costs. Your loved one can’t get a Medigap plan if they have a Medicare Advantage plan. (The Advantage plan may already help with the supplemental costs of Medicare or have different rates of copayments, coinsurance, and deductibles.)
Which Medicare Plan Is Best For Your Loved One
This is the most important discussion you’ll have with your loved one when it comes to Medicare: which plan is best for them? While they can change Medicare plans during various periods of the year, it’s vital to know what type of coverage your loved one needs moving forward. Does Original Medicare work for them? Or will a Medicare Advantage plan provide better coverage for their needs?
Some talking points you should discuss regarding your loved one’s coverage include:
What Type Of Coverage Do They Need:
While Original Medicare plans and Advantage plans both cover the same base needs, Advantage plans often offer a wider range of coverage (and potentially a wider range of doctors and specialists, too). Does your loved one need frequent vision and dental work? If so, they could favor an Advantage plan. Whatever the case, getting on the same page is important.
Discuss Who Their Primary Care Physician Is:
Is their PCP covered by Original Medicare? Will they need to switch to a new one? Is it worth the (potential) extra money to pick an Advantage plan because their PCP is in-network? Their primary care physician is an important part of the Medicare process, primarily because it’s who will handle much of their care and referrals when they get sick.
What Prescriptions Do They Take:
Compile a list of your loved one’s prescriptions over the last year and match this list with pending prescription plans. Make sure everything your loved one takes is covered under whichever plan you choose. You should also note what pharmacy they get their prescriptions from and make sure it accepts the chosen plan.
How Much Can They/You Afford A Month:
As much as we hate for it to be the case, money seeps into this conversation. How much money can your loved one afford? Will you be helping with the costs? All of this impacts the coverage that is ultimately picked. Advantage plans tend to cost more on average on a monthly basis, but Original Medicare and prescription plans combined can also cost a few hundred dollars per month before copayments or deductible payments. Advantage plans also end up having lower out-of-pocket costs, because you’re typically paying more up front. This is why it’s important to conduct thorough research on all available plans and their costs.
All of this can be stressful, but open communication will help move the process along. You should allow plenty of time (months) for this conversation to develop so that a sound, informed decision can be reached. But it also helps to know when exactly your loved one needs to apply and how to do it.
When Can I Enroll Them In Medicare?
Once you’ve settled on a Medicare plan, it’s time to enroll your loved one so they can receive healthcare coverage. There are four periods of time you can do this, but the first one—the initial enrollment period (IEP)—is the most important.
The IEP lasts seven months total: the three months before the 65th birthday month, the 65th birthday month, and three months after the 65th birthday month. So if your loved one’s birthday is June 2, their IEP would last from March 1 to September 30.
The four enrollment periods are:
Initial Enrollment Period:
This is when your loved one is first eligible to enroll in Medicare. Coverage starts at age 65, and Medicare provides several months before and after their 65th birthday in order to set everything up. As a result, the IEP lasts seven months total: the three months before the 65th birthday month, the 65th birthday month, and three months after the 65th birthday month. So if your loved one’s birthday is June 2, their IEP would last from March 1 to September 30. They will get Original Medicare, Medicare Advantage, and/or prescription plans during this time. If they don’t apply for Medicare during this period, they risk accruing late penalties when they finally do enroll.
General Enrollment Period:
If your loved one missed their IEP, don’t worry because there is still the General Enrollment Period to get coverage. This lasts from January 1 to March 31. If your loved one applies during this time, coverage will begin the following July 1. They may risk some late penalties, though, even if they’re only a couple of months late.
Open Enrollment Period:
This period is mainly for a loved one who already has Medicare, though it allows people who have Original Medicare but don’t have prescription coverage to apply for Part D during this time. It lasts from October 15 to December 7.
Special Enrollment Period:
There are “special” periods of time for a your loved one who is still working and covered by insurance, but who will soon stop working or their coverage is set to end. Your loved one has eight months following the last month of employment or coverage to apply for Medicare. No matter if they’re 66 to 86, there will be no late fees for applying for Medicare if they do so within this time.
If a loved one is interested in starting with Original Medicare and switching to a Medicare Advantage plan (or vice versa), they can switch during the open enrollment period. If they disenroll from an Advantage plan with prescription coverage, they will have to enroll in a Part D plan during this time, too.
How To Enroll In Medicare
The enrollment process for Medicare is pretty straightforward and easy. And if your loved one is receiving Social Security benefits before the age of 65, they’re actually automatically signed up and will start receiving benefits the day they turn 65. If your loved one isn’t receiving benefits yet, they have to manually sign up for Medicare with the Social Security Administration (SSA).
This process is extremely easy and you or a loved one can:
- Apply online at the SSA website.
- Call the SSA at 1-800-325-0778.
- Visit a local SSA office and fill out the necessary paperwork in person.
If your loved one wants a Medicare Advantage plan, the process shouldn’t take longer than usual. Once the plan is selected through the Medicare Plan Finder tool or the insurer’s website, the paperwork can be filed out via the insurance company.
How To Pay For Medicare
Paying for Medicare is just as easy as applying. The premiums come out of your loved one’s monthly Social Security check. If they aren’t cashing in on Social Security just yet, they need to contact the Social Security Administration directly.
For Medicare Advantage plans, your loved one pays the insurance company their monthly premium (if there is one) directly. (The Part B premium is taken out of his or her SSA check.)
Your primary care doctor or other specialists will bill your loved one directly for any out-of-pocket costs not covered by Medicare. As mentioned earlier, there are supplemental (Medigap) plans to help cover all the costs that Medicare plans don’t. Private insurance companies offer these plans. Your loved one would pay them the monthly premium, and they in turn will be charged for all the extra out-of-pocket costs.
If you or your loved one has any questions regarding how to enroll in Medicare, visit the Medicare website or contact a local Social Security Administration office.