AARP Hearing Center
4-minute read
A recent diagnosis for Su Reiser, pictured with her husband, Carl, forced her to face key decisions about Social Security and Medicare.
Brian Fraser
The problem
Su Reiser, who was about to turn 65, had questions. She lives in New Jersey with her husband, Carl, 69, and her daughter, Rebecca, 28, who has autism and Tourette’s syndrome. Through a state program, Reiser is Rebecca’s paid caregiver, and she’d like to keep doing that. When should she take Social Security, and does she need to claim it to qualify for Medicare? What sort of Medicare plan would be best? That last question is urgent: Recently diagnosed with Parkinson’s disease, Reiser wants to prepare for the worst.
More Ways to Benefit
- Related Benefit 1
- Related Benefit 2
- Related Benefit 3
- Related Benefit 4
- Related Benefit 5
The advice
One answer was easy: You don’t need to take Social Security in order to get Medicare.
And Reiser should delay claiming Social Security. Before she hits her full retirement age (FRA) of 67, she is subject to Social Security’s earnings test. Her $6,300 monthly salary is high enough to reduce her benefits to zero.
AARP
Your money can work for you long after the paycheck stops. For more strategies that can help you build a lasting income for the years ahead, visit aarp.org/foreverpaycheck.
For more specifics, I reached out to Martha Shedden, president of the National Association of Registered Social Security Analysts. Based on the family’s situation — including that Carl, a former truck driver disabled in 2014, collects $3,312 monthly in Social Security — Shedden recommended that Reiser claim her benefits the month she hits her FRA. Then she’ll receive her own benefit plus a spousal top-up, resulting in a monthly payment of $1,656, half of Carl’s benefit. At FRA, the earnings limits vanish, so if she keeps working, Social Security won’t hold anything back.
As for Medicare, Reiser couldn’t decide between a Medicare Advantage (MA) policy and original Medicare (OM) with a Medigap supplement policy. MA plans typically include a Part D drug plan and result in less out-of-pocket spending, but they usually cover only doctors and facilities in a specific network. OM with Medigap (and a separate Part D) means higher premiums but more health care providers to choose from.
I consulted Melinda Caughill, cofounder of i65.com, which runs Medicare plan analyses. First, noting that Reiser was paying $1,800 a month for private insurance and her birthday was approaching, Caughill told her to enroll ASAP in Medicare so its less-expensive Part B coverage would begin the month she turned 65. Then, so Reiser could have a wide choice of specialists to address her Parkinson’s, Caughill recommended she select OM with a Medigap supplement and a drug plan — an opinion seconded by staffers at the Parkinson’s Foundation. It was also important, Caughill said, for Reiser to sign up for a Medigap policy quickly, because during the six-month period after Part B coverage starts, Medigap insurers can’t deny people coverage or charge more based on their medical history.
Eight Medigap plans, each identified by a letter such as A, G or L, are available to most new enrollees. Caughill recommended a G policy, which has extensive coverage for out-of-pocket costs a person might have if enrolled in OM.
As her Parkinson’s progresses, the medications Reiser will need will likely become more expensive. That will make it especially important for her to do what everyone with Part D coverage should do: Shop around each year to choose the right drug plan based on one’s current medications, since every year each plan can change its formulary, or list of drugs that are covered.
To find Reiser’s first plan, Caughill used HeyMOE.com, a subscription website affiliated with i65.com. Based on the medications Reiser is taking now, it recommended a Part D plan and pointed her to local drugstores where her meds would cost the least.
The outcome
Reiser followed the advice to the letter, enrolling in original Medicare and signing up for the suggested Medigap and drug plans. She’s all set to reshop her drug plan next year. And she’s biding her time on Social Security. “I can’t thank you enough for helping,” she told me. “It was invaluable.”
AARP Membership
Join AARP for only $15 per year with automatic renewal. Get instant access to members-only products and hundreds of benefits, a free second membership, and a subscription to AARP The Magazine.
More From AARP
Your Disability Claim Was Denied. Now What?
How to overcome an insurer’s rejection — and how to avoid a denial in the first place
Sorting Through Confusing Annuity Choices
Jean Chatzky explains different options for pulling money from an annuity in retirement
This Card Trick Changed My Life With Parkinson’s
My disease made me worry about taking care of my family. Then my son performed magic