Dear Marci,

I am almost eligible for Medicare. I currently have coverage with a Marketplace plan– my coverage is low and I receive cost assistance. Do I have to switch coverage plans and enroll in Medicare?

– Evelyn (Brainerd, MN)  

Dear Evelyn,

Deciding what to do as your approach Medicare eligibility when you have a Marketplace plan (state or federal) depends on your unique circumstances. Let’s review what your options might be.

1. You have End-Stage Renal Disease (ESRD). If you have kidney disease that requires dialysis or transplant and are eligible for Medicare, you have the choice to enroll in a Marketplace plan with cost assistance, or keep your current Marketplace plan. If you are thinking of delaying Medicare enrollment to keep or enroll in a Marketplace plan, you should consider how the Marketplace plan coverage and costs compare to Medicare. If you have ESRD and are considering whether you should enroll in Medicare, it is best to speak with a State Health Insurance Assistance Program (SHIP) counselor about the outcomes of your decision.

2. You do not qualify for Medicare premium-free Part A. If you are eligible for Medicare but would have to pay a premium for Part A, you can keep your Marketplace plan with cost assistance as long as you do not enroll in Medicare. You should consider all consequences carefully before deciding to take a Marketplace plan instead of Medicare. If you ever decide to enroll in Medicare you will have to wait for theGeneral Enrollment Period (GEP) to sign up. The GEP runs January 1 through March 31 of each year, and your Medicare benefits start on July 1. This means that you may experience gaps in coverage. You may also likely have a late enrollment penalty for not signing up for Medicare when you were first eligible.

3. You qualify for premium-free Part A. If you are eligible for Medicare, you should not continue to use the Marketplace to get health and drug coverage (except in the two circumstances listed above). Federal law requires you to have health insurance; Medicare Part A meets the minimum essential coverage requirement, which means you will not get a tax penalty if you are enrolled in Part A. Note that Medicare Part Balone is not minimum essential coverage (MEC) and you would likely get a penalty for not having minimum essential coverage.

When you first become eligible for Medicare during your Initial Enrollment Period (IEP), you should enroll. Contact the Social Security Administration at 800-772-1213 to sign up for Medicare for the first time. If you are collecting Social Security retirement benefits, you may be automatically enrolled in Medicare.

When you enroll in Medicare, be sure to find out the date that your coverage will start. For example, if you enroll in Medicare during the first three months of your IEP, your Medicare benefits will start on the first day of your birthday month. You should plan to disenroll from your Marketplace plan before your Medicare benefits start.

Evelyn, if you are enrolled in a plan through the federal Marketplace, contact the Marketplace at 800-318-2596 or visitwww.healthcare.gov to disenroll at least 14 days before you want your coverage to end. If you are enrolled in a plan through your state’s Marketplace, contact the state Marketplace to learn how and when to disenroll from the plan. Keep in mind that you want your Marketplace plan to cover you up until your Medicare starts. You do not want any gaps in coverage, so timing is important.
– Marci    

Dear Marci,

How does the Health Insurance Marketplace affect my Medicare coverage?

– Josephine (Cumberland, RI)

Dear Josephine,

The Marketplace (also known as the Exchange) does not change your Medicare benefits or how you access them. Individual Marketplaces provide a way for people who lack health insurance to get coverage. However, Marketplace policies, also known as Qualified Health Plans (QHPs), are not meant for people who qualify for Medicare. Medicare Advantage Plans, Medigaps, and stand-alone Part D plans are not sold through the Marketplace.

If you are eligible for Medicare, in most cases you should not use the Marketplace to get health and drug coverage. Limited exceptions include if you qualify for Medicare based on having End-Stage Renal Disease (ESRD), or if you do not qualify for premium-free Part A. In these cases, a Marketplace plan might be an option for you.

Otherwise, if you already have Medicare, there are a few reasons you should not enroll in a QHP:

1. It is illegal for someone to sell you a QHP if they know you have Medicare.
2. You are not eligible for any tax credits to help pay for QHP premiums. QHP premiums are more costly than your Medicare, Medigap, or Part D premiums.
3. There is no guarantee that a QHP will pay for your health costs if you were to drop Medicare to take a QHP.

If you are enrolled in a QHP and then become eligible for Medicare, there are steps you should take to enroll in Medicare. These steps will help you avoid gaps in coverage or penalties:

1. You should enroll in Medicare as soon as you are eligible.
2. You should drop you QHP coverage. If you get your coverage through the federal Marketplace, disenroll by calling the Marketplace Call Center or by going online atwww.healthcare.gov. If you get your coverage through a state-based Marketplace, contact your plan or the state-based Marketplace to find out how to disenroll.
3. After you enroll in Medicare, consider how you want to get your Medicare coverage. Medicare beneficiaries have the choice between Original Medicare through the federal government and a Medicare Advantage Plan through a private insurance company.

If you have a Small Business Health Options Program (SHOP) plan that your current employer purchased through the Marketplace, then the rules are a little different. If you have a SHOP plan through a current employer, you will still need to enroll in Medicare; however, the timing of your enrollment and whether Medicare will pay first or seconddepends on the size of your employer and whether you qualify for Medicare based on age or disability. If you have a SHOP plan, talk with your employer about how your coverage works with Medicare.

You may hear a lot about the Health Insurance Marketplaces, but just know that apart from for limited exceptions, Medicare beneficiaries do not need to use them to get their health care coverage.

– Marci