Medicare and the Healthcare Marketplaces

The Affordable Care Act (ACA) has changed the healthcare landscape, creating marketplaces through which people can purchase subsidized health insurance (for those who qualify) online or over the phone. Dozens of states, including California, have created state-based marketplaces, and a federal marketplace was created for people who live in states that chose not to create a state-based exchange. Plans sold through the marketplace are referred to as Qualified Health Plans (QHPs).

If you have Medicare or will soon qualify for it, you may wonder how the healthcare marketplace will affect you. Highlighted below are several scenarios—find the one that best matches your situation.

1: I already have Medicare and do not have coverage through my own or my spouse’s employer.

If you already have Medicare and do not have employer-sponsored health insurance, you do not need to make any changes. You should not enroll in a marketplace plan and, in fact, it is illegal for someone to sell you a plan through the marketplace if they know you have Medicare. Health plans through the marketplace are generally more costly than Medicare, and there is no guarantee that a QHP would pay for your healthcare costs if you are eligible for Medicare.

2: I have a marketplace health plan but will soon be eligible for Medicare.

When you become eligible for Medicare, you should enroll in Part B (medical insurance) and a Part D drug plan during your initial enrollment period (IEP). Enrolling in Parts B and D outside of the IEP could result in higher premiums—this is why you need to avoid delaying enrollment. This is also the time to consider enrolling in a Medicare Advantage plan (which takes the place of Original Medicare Parts A and B, and may include prescription drug coverage and other benefits), or a Medigap plan.

It’s important to note that if you take Medicare late, you will likely pay higher premiums for the rest of your life. Also, your marketplace health plan will not automatically end when you become eligible for Medicare. Notify your plan at least two weeks in advance that you want the plan to end the day you become eligible for Medicare.

3: I have a Qualified Health Plan that was purchased through my own or my spouse’s employer through the SHOP marketplace.

The Small Business Health Options Program, or SHOP, helps small businesses provide health coverage to their employees. If you have a SHOP plan through your own or your spouse’s employer, and you’ll soon be eligible for Medicare, you need to find out whether Medicare will pay first or second to the SHOP plan—this will depend on the number of employees at the company. If Medicare pays first, you will need to take Medicare—if you don’t, your employer may give you little or no coverage. If the SHOP plan pays first, however, you may be able to delay enrolling in Part B without penalty.

Other Considerations

Medicare Advantage plans, Medicare supplement (Medigap) plans, and Part D prescription drug plans are not sold through the healthcare marketplaces. Consult with an expert, like those at CA Medicare, to learn how to apply for these plans and for information about Original Medicare enrollment. Be sure not to confuse open enrollment for the healthcare marketplaces with Medicare Fall Open enrollment—the annual Medicare enrollment takes place October 15-December 7.

If your situation is different from the scenarios listed above, call CA Medicare today for help understanding your options.

Sources: