Do you purchase your health insurance through the Marketplace but will soon be eligible for Medicare?
If so, you will be pleased to know that it will not affect you when you are ready to sign up for Medicare. However, there is some critical information you need to know when it comes to the transition from a Marketplace plan into Medicare.
Once you become eligible for Medicare you will have an Initial Enrollment Period (IEP) in which to sign up. This Initial Enrollment Period begins 3 months before your 65th birthday, includes your birth month, and extends 3 months after your birth month. Knowing these dates is so important because while it seems like such a large window of time in which to enroll, it’s easy to push it aside and then it becomes forgotten. If realized too late you could find yourself scrambling for adequate coverage for both your health and finances, and that just might not happen if you feel rushed. And if you wait too long, you could miss it all together and end up with a lifetime of late enrollment penalties. Two good reasons that it is to your advantage to sign up during your IEP is that:
Once your Medicare Part A coverage starts, you will not be eligible for a premium tax credit or other savings for a Marketplace plan. If you keep your Marketplace plan, you would have to pay full price.
If you enroll in Medicare after your Initial Enrollment Period ends, you may have to pay a Part B late enrollment penalty for as long as you have Medicare. In addition, you can enroll in Medicare Part B (and Part A if you have to pay a premium for it) only during the Medicare general enrollment period (from January 1 to March 31 each year). Coverage doesn’t start until July of that year. This may create a gap in your coverage.
Duplicate Coverage:There is no benefit to keeping your exchange plan along with Medicare. The plans would provide duplicate coverage as individual marketplace plans are not set up to coordinate with Medicare the way employee sponsored plans are. A marketplace plan would not function as secondary coverage. In fact it would not provide coverage at all if you are enrolled in Medicare. What you will need instead is a Medicare Advantage plan or Medicare Supplement plan and a Part D Prescription Drug plan to help supplement your Medicare coverage.
Cancelling Your Marketplace Plan:When you sign up for Parts A and B of Medicare during your eligibility period, you will be given the date in which your coverage will take effect. When you know for sure you should call your marketplace insurance carrier to have your plan cancelled. Many beneficiaries are under the assumption that when they enroll in Medicare their marketplace policy is automatically cancelled, but that it not the case. It would be to your advantage to contact your marketplace insurance carrier before your Medicare start date to insure that you understand the cancellation process. Since your tax credits end when your Part A coverage begins you could end up with a substantial bill for your marketplace plan if it has not been cancelled.
With a 65th birthday on the horizon, like most Medicare eligibles, we know you are excited. And you should be! You now get to enroll in the Medical health plan you have earned by working! Now give us a call and let us help you familiarize yourself with all the parts of Medicare as well as helping you explore all the various coverage options that can help improve upon the basic coverage provided by Medicare.