What the Health Insurance Marketplace Means for Seniors

Related topics: Insurance, Financial

As the state and federal Health Insurance Marketplaces are going online, individuals without health insurance are now searching for and enrolling in a plan. The 6-month initial open enrollment period runs from Oct. 1, 2013 to Mar. 31, 2014, with coverage beginning as soon as Jan. 1, 2014.

But what does the Marketplace mean for older adults? The answer depends on your situation. Here's what you need to know:

If you are aged 65+:

  • The Marketplace is not for people with Medicare. The Marketplace is for people who are under age 65 and uninsured, underinsured, or looking for more insurance options. If you are aged 65+ and already have Medicare, you are protected from the mandate penalty. Bottom line: You don't have to do anything. In fact, it's illegal for someone to sell you a Marketplace plan if you already have Medicare Part A with no premiums and/or Part B. See 5 tips to avoid Open Enrollment scams
  • If you pay for Medicare Part A, you may want to consider the Marketplace. Some individuals have not earned enough working credits to get Part A without premiums. They have to buy Part A, which in 2013 is $441 per month. If this applies to you, weigh your options between paying for Medicare versus buying a Marketplace plan. But remember that if you choose a Marketplace plan, you may have to pay a late enrollment penalty fee if you enroll in Medicare in the future.
  • People eligible for Medicare cannot get Marketplace subsidies. If you buy a Marketplace plan, then you become eligible for Medicare, you will automatically lose any Marketplace subsidy. To avoid a late enrollment penalty fee, it's best to enroll in Medicare during your Initial Enrollment Period. Once you are enrolled in Medicare, you should disenroll from your Marketplace plan. Be sure that your Medicare enrollment and Marketplace disenrollment line up to avoid a gap in coverage.
  • Marketplace drug coverage may or may not be "creditable." "Creditable drug coverage" means coverage that is as good as Medicare's basic drug benefit. It's still unclear whether all drug coverage in the Marketplace is considered "creditable." This means that if you are eligible for Medicare and get coverage either through the individual Marketplace or the Small Business Health Options Program Marketplace, you should enroll in Part D on time, during your Initial Enrollment Period, unless you can confirm that your drug coverage is creditable. Your insurance plan will give you this information in writing. If your plan is not creditable, you may have to pay a lifetime penalty fee for enrolling late into Medicare Part D.

If you are aged 55-64:

  • People who are uninsured, underinsured, or do not have access to affordable health care should review their options in the Marketplace. While you await Medicare, consider plan options in the Marketplace. Depending on your income, you may get subsidies to help pay for your Marketplace plan premium and cost-sharing. You also will get screened for Medicaid eligibility.
  • People eligible for Medicare because of a disability may have questions about the Marketplace. The Marketplace is an important option for people with disabilities who are waiting for Medicare eligibility (24 months, for most). However, once you are eligible for Medicare, you will lose any Marketplace premium and cost-sharing subsidies. Be sure to enroll in Medicare during your Initial Enrollment Period to avoid a late enrollment penalty fee.
  • Subsidies only apply to plans in the Marketplace. Although you can still purchase health plans in the individual market, subsidies can only be used toward plans purchased in the Marketplace. That means that if you're eligible for subsidies, you should purchase a plan through the Marketplace.
  • Once you become eligible for and enroll in Medicare, you will not need your Marketplace plan. People with Medicare cannot get Marketplace subsidies, so the Marketplace will likely become too expensive. You will need to contact your Marketplace plan to disenroll. Be sure to sign up for Medicare during your Initial Enrollment Period, or else you will face a possible lifetime penalty fee later.
  • People who currently get coverage through PCIPs will need to take action. Pre-Existing Condition Insurance Plan (PCIP) coverage ends on Dec. 31, 2013. Anyone with PCIP coverage should consider the Marketplace. You must apply for a Marketplace plan before Dec. 15 to avoid a gap in coverage. (If you enroll during Dec. 16 - Dec. 31, your Marketplace coverage will likely not start until Feb. 1, 2014.) People with PCIP coverage should get a number of notices from their plan this fall to remind them to choose a Marketplace plan.

Learn More

Have more questions? Here's where you can learn more and get personalized help:

  • Visit www.healthcare.gov, the official Marketplace website. (Note: due to current technical difficulties, consumers are encouraged to use the site for information gathering only, and to find their local office for assistance in filing an application.)
  • Contact the Marketplace toll-free call center (available 24/7) at 1-800-318-2596
  • Read Medicare & the Health Insurance Marketplace

Source: The National Council on Aging is a nonprofit service and advocacy organization whose mission is to improve the lives of millions of older adults, especially those who are vulnerable and disadvantaged. NCOA is a national voice for older Americans and the community organizations that serve them, and works with thousands of organizations across the country to help seniors find jobs and benefits, improve their health, live independently, and remain active in their communities.