The health insurance Marketplaces created by the Affordable Care Act (ACA) allow people who are uninsured or underinsured to shop for coverage online or over the phone. The Marketplaces may also be known as Exchanges. Health insurance plans sold in the Marketplaces are called Qualified Health plans (QHPs).
If you have Medicare or will soon qualify for it, you may wonder how the new Marketplaces will affect you. Move through these four scenarios below and see which situation applies to you.
1. I already have Medicare and do not have coverage through my own or my spouse’s current employer. Should I make any changes to my Medicare because of the new Marketplaces?
No. You should not make any changes to how you currently get your insurance. This means you should not enroll in a QHP for individual health coverage if you already have Medicare.
There are many reasons it is not a good idea to take a QHP over Medicare:
- It is illegal for someone to sell you a QHP if you they know you have Medicare.
- You are not eligible for any tax credits to help pay for QHP premiums, and full QHP premiums are more costly than your Medicare, Medigap or Part D premiums.
- There is no guarantee that a QHP will pay for your health costs if you drop Medicare to take a QHP. In many cases, when someone is eligible for Medicare but does not have it, the insurance they do have can refuse to cover most if not all of their health care costs. This means that you may have little or no coverage if you rely on a QHP for health coverage.
Be aware that Medicare Advantage Plans, Medigap supplemental policies and stand-alone Part D plans will not be sold through the Marketplaces.
Open Enrollment for the Marketplaces overlaps with Medicare Fall Open Enrollment. These enrollment periods are not the same. People with Medicare should use the Fall Open Enrollment Period (October 15-December 7) to review how they get their Medicare and make any changes to their coverage for next year.
2. I have individual QHP coverage that I bought through the Marketplace. What should I do when I become eligible for Medicare?
Here are the steps you should take when you become eligible for Medicare:
- You need to enroll in Medicare Part B as soon as you are eligible.
- You should drop your QHP coverage. If you get your coverage through your state’s Marketplace, contact your plan or the state-based Marketplace to find out how to disenroll. If you get your coverage through the federal Marketplace, disenroll one of two ways:
- Call the Marketplace Call Center at 1-800-319-2596 (TTY: 1-855-889-4325), or
- Go online to www.healthcare.gov at least 14 days before you want coverage to end
- After you enroll in Medicare, you should consider how you will get your Medicare coverage. You have a choice between Original Medicare and a Medicare Advantage Plan.
Be aware that if you take Medicare late, you will likely pay higher Medicare premiums for the rest of your life. You will also have to wait for your Medicare coverage to start.
3. I already have Medicare Part B, and I have coverage from my own or my spouse’s current employer. Do the Marketplaces affect how Medicare works with my employer coverage?
No. The way your coverage from a current employer works with Medicare should be the same, whether or not the employer decides to shift coverage to a Small Business Health Options (SHOP) plan in the Marketplace. A SHOP plan is an employer plan purchased through the Marketplace. Depending on the size of your employer, Medicare either pays first or second on health insurance claims. If Medicare pays first, it is especially important that you keep Medicare. If you drop your Medicare coverage when Medicare is paying first, your employer plan may give you little or no coverage at all.
4. I have QHP coverage that was purchased by my own or my spouse’s employer through the SHOP. What should I do when I qualify for Medicare?
You should talk to your employer to see whether you need Medicare in addition to your employer coverage. After speaking to your employer, confirm what you have learned with the Social Security Administration (800-772-1213). Get all answers in writing.
Depending on the size of your employer, Medicare pays either first or second to SHOP plans. Keep in mind, a SHOP plan is an employer plan purchased through the Marketplace. If Medicare pays first, you will need to take Medicare. On the other hand, if your SHOP plan pays first, you may be able to delay enrolling in Part B.
Be aware that there may be different rules for purchasing health coverage through the Marketplaces for people with End-Stage Renal Disease (ESRD) or for those who would need to pay a premium for Medicare Part A. If you have Medicare due to ESRD or you pay a premium for Medicare Part A (hospital insurance), you may be able to purchase a QHP through the Marketplaces and to qualify for tax credits to help you pay for premiums.