How and When to Add Your Parents to Your Healthcare Plan
Navigating the U.S. healthcare system can feel like being stuck in a labyrinth, especially when you have what seems to be a simple question: Can I add my parents to my healthcare plan? If you're wondering whether you can extend your coverage to one or both of your parents and how, you probably won't be surprised to learn the answers, respectively, are it depends and it's complicated.
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"The biggest obstacle when it comes to adding parents to your healthcare plan is the research required to determine if your situation allows for coverage," says Jan Stone, a board-certified, independent patient advocate. "As a general reminder, there is no mandate requiring health plans to offer parents coverage. So finding out will require a lot of proactive digging on your part."
Here's how to do the excavation of your situation or policy.
Medicare and Medicaid options
The first detail has to do with your parents' age. Are they 65 or over? If so, they're eligible for Medicare. "Being eligible will negate their ability to be on your plan," Stone says. "In this situation, you can support them financially by paying their premium."
Medicare Part A, which is hospital insurance, will be free for people who worked and paid Medicare taxes for at least 10 years. But Part B—which covers doctor's visits, preventive services, and more—has a premium.
Stone recommends also looking at a prescription drug policy and a Medicare Supplement Insurance (Medigap) policy. "They pick up the costs Medicare doesn't cover, and the savings is enormous," she says. "Not many people know that Medicare does not have an out-of-pocket max. The spend just keeps on going. The supplement will help tremendously."
Even if a parent is younger than 65, they may still be able to receive Medicare, depending on their health status. An individual qualifies for early Medicare if they have end stage renal disease or if they have been receiving Social Security Disability benefits for 24 months.
If your parents are younger than 65 and low income, they may qualify for free or low-cost coverage under Medicaid. Eligibility requirements vary by state. Unfortunately, 2.2 million low-income folks in 12 states that have not adopted Medicaid expansion fall into what's called a coverage gap. People in the gap have an income that is below the poverty threshold. But they don't qualify for Medicaid or premium subsidies under Marketplace insurance.
Adding a parent to your plan
If your parents aren't eligible for Medicare or Medicaid, then it's time to check the rules about adding them to your plan. If you have private, employer-sponsored healthcare, your HR department will be a good resource, Stone says.
"Criteria may include things like your parents living with you, being claimed on your tax return as a dependent, or the adult child being financially responsible for the parent," Stone explains.
If you purchase a plan through the Marketplace, you can only include a parent on your policy if you claim that parent as a dependent on your tax return. Before you change your tax situation, though, be sure to check the cost of purchasing your parents their own policy through the Marketplace. Their income may qualify them for subsidies.
When to add parents to your plan
Typically, insurance companies allow adding dependents to a plan during the policy's open enrollment period. Open enrollment usually runs from November through the end of the year, with coverage starting in the new year.
If you are currently in the market for a new policy for next year, you can take advantage of the Health Insurance Marketplace's special open enrollment period (SEP) through August 15. This unique SEP is in response to the COVID-19 pandemic.
In some cases, you can add dependents to a plan at other times during the year, with coverage effective immediately. "If the parent recently lost coverage, such as a spouse's death or job loss," says Les Masterson, an insurance analyst and the managing editor for www.Insure.com, "you may qualify for a special enrollment period outside of the open enrollment period."
Consult a lawyer
If you're struggling to find affordable healthcare coverage for your parents, Stone recommends consulting an elder care attorney. "Their job is to protect seniors' legal and financial situation," she says. "They can address needs, such as estate planning, Medicaid applications (which can take months), long-term care concerns, guardianship, and other legal matters." She recommends searching for an attorney by seeking recommendations from trusted family or friends.
Although wading through insurance policy jargon and red tape can be frustrating, Stone has this message as a pat on the back for doing so: "Kudos to those who take care of their parents or older people they care about."
