Medicare is Complicated – Your Employees Would Welcome Help!

I often helped my parents with their medical coverage, especially after retirement. I still remember the year Medicare Part D was launched. My mother would call when another piece of mail arrived from Medicare, and finally I told her to just save everything to sort through the next time I visited. By the time I arrived there was a towering stack on one of her dining room chairs – I wish I had taken a photo! We made our way through all the booklets and brochures and selected what we thought was the best option for her. And, just to be sure, she called her local pharmacy to confirm they were in the network.

This year my husband turned 65. I had assumed the entire Medicare application process would have moved online by now, but no. The slew of mailings started way before the big birthday. The Social Security Administration sent a letter suggesting we begin the process three months in advance. That seemed like excessive lead time in this era of technology and Amazon same-day delivery so we waited until about a month before his birthday to begin. I called my benefit administrator and learned that I was allowed to drop my spouse from my coverage within 30 days of his birthday and my HSA contributions would be adjusted accordingly. (Suggestion for employers – it would be very helpful if an automatic communication was triggered 3-4 months prior to an employee or their spouse turning 65. You might consider including this booklet that provides an introduction to Medicare benefits and answers employees’ most common questions.)

We completed the Medicare application online, but the site indicated the approval communication would come via US mail, which it eventually did, confirming that coverage was effective the first day of his birthday month. The Medicare card arrived in the mail but we had to wait for another communication to learn what the Part B premium would be. It’s based on household income, which means, for example, that if one spouse is still working Part B is not necessarily a bargain. And because the Part B premium for a given year is determined by modified adjusted gross income as reported on your IRS tax return from 2 years prior, the newly eligible Medicare beneficiary’s prior wages plus other income received could also lead to a Part B premium that is higher than the “standard” amount ($148.50 in 2021). When the actual bill for Part B arrived, for five months of premium (an odd number of months, in my opinion), I couldn’t figure out how they arrived at the total due – it was roughly equivalent to two months of premium based on the prior letter. And (get this) you cannot pay the bill online with a credit card; you can set up direct payment from your bank account or mail a check. I can’t remember the last time I actually wrote a check, so we opted for direct pay.

Once you have your Medicare card and ID number, you should consider signing up for Medicare Supplement (Medigap) coverage and Medicare Part D or a Medicare Advantage Plan. Even though the Medicare market is heavily regulated, there are still many options. I consider myself to be pretty savvy when it comes to healthcare, and I went in thinking he would sign up for Medigap Plan G and Part D coverage for prescriptions. But my research lead me to a different conclusion. And yes – I confess – I called one of our retiree medical actuaries to validate the choice.

Of course, most people won’t have a friendly actuary or retiree medical expert to call. At Mercer, clients frequently ask us about ways to help employees navigate these decisions when they retire or a spouse becomes Medicare eligible. In response, we’ve recently partnered with a leading Medicare broker to create a free resource that HR teams can direct employees to for guidance as they navigate the complex world of Medicare. Mercer SmartConnect provides employees with access to online educational materials on retiree healthcare and assists them with enrollment. Importantly, they can contact a Medicare concierge for a personalized consultation and more seamless enrollment.

Offering a Medicare navigation solution can be a win-win for the employees and the employer, helping employees transition smoothly to retirement while also relieving pressure on HR teams by reducing the burden of fielding Medicare questions. Mercer SmartConnect also assists active employees over the age of 65 who may not know that Medicare could be an attractive alternative to their employer plan.

There is no one-size-fits-all guidance for employees who call your benefits department with questions about their Medicare options. Situations are complex and the number of choices can seem infinite! Providing a resource to help navigate all of this benefits everyone.

Tracy Watts
by Tracy Watts

Senior Partner, National Leader for U.S. Health Policy

Register for Mercer US Health News to receive weekly e-mail updates.