Question

My Baby Boomer parents are on the verge of turning 65. They just received their copy of Medicare & You in the mail from the Centers for Medicare and Medicaid Services at the Department of Health & Human Services. It's time for them to think about a bunch of new things that happen when you turn 65, like signing up for Medicare and starting to collect Social Security. The latter seems like a relatively easy straight-forward decision. Since both of them have worked throughout their lives and recently retired, all that is needed is to decide at what age they will start taking those retirement benefits. Medicare is a whole different story. I do know that they paid Medicare taxes while they were employed, so they should be eligible. Also, since they have recently retired, they will not have health care coverage once their COBRA benefits run out. They are currently paying $1,300 per month to retain their medical coverage. Now that I think about it, it may make sense for them to enroll in Medicare before COBRA runs out. My parents have had their health insurance with Anthem Blue Cross/Blue Shield through my dad's employer and have stayed with this under COBRA for the last 6 months; they have 12 months left on that coverage. They have each used the same primary care physicians for many years, but their doctors are also Baby Boomers and are on the verge of retiring as well. Dad has diabetes and needs regular care and good coverage for his medications. Mom is in pretty good health, but needs annual check-ups, mammograms and the like, and is also on a couple of medications for cholesterol and other things. Plus, you never know when something will go wrong and they'll need more care. My siblings and I want to make sure they have good coverage, so I am thinking that this may be a perfect time for them to change their coverage. But, I am at a loss about what to do. Unfortunately, I don't know anything about health insurance beyond my own family's policy and benefits, and I know absolutely nothing about Medicare. And, unfortunately, my parents seem to be in shock that they have reached this point in their lives and aren't really paying attention to these issues.You are a health care management student. I understand that you have some knowledge in this area. Can you help me by answering the following questions and making a recommendation about which way my parents should go? And, can you make sure to explain your rationale of making your recommendation, so that my siblings and I can discuss this with our parents and help them make the decision that will be best for them?

4. How does the cost of Medicare compare to what my parents are currently spending for their COBRA coverage? Will going on Medicare sooner rather than later save them money? 5. What is your recommendation to us for my parents' coverage?

Answer 1

The Medicare cost depends on the plan chosen. But it is cheaper as compared to COBRA. The standard Part B premium amount in 2019 is $135.50. Most people will pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

You can go on Medicare sooner as your parents have 12 months left under COBRA.

Yor parents can choose Medicare Part B

Part B covers 2 types of services

• Medically necessary services: Services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
• Preventive services: Health care to prevent illness or detect it at an early stage, when treatment is most likely to work best.
• You pay nothing for most preventive services if you get the services from a health care provider who accepts assignment.

Part B covers things like:

• Clinical research  
• Ambulance services
• Durable medical equipment (DME)
• Mental health
• Getting a second opinion before surgery
• Limited outpatient prescription drugs

Medicare coverage is based on 3 main factors

1. Federal and state laws.
2. National coverage decisions made by Medicare about whether something is covered.
3. Local coverage decisions made by companies in each state that process claims for Medicare. These companies decide whether something is medically necessary and should be covered in their area.