Already on Medicare? Don’t worry about the new health insurance exchanges
Eileen St. Pierre, The Everyday Financial Planner
I felt it was important to devote a column to clearing up any confusion between Medicare and the new health insurance exchanges. Medicare is not part of the Health Insurance Marketplace. For those of you who have Medicare, you are already covered and do not need to make any changes. Your benefits will not be changing.
While those ages 65 and older are allowed to join a Marketplace plan, it will be to your advantage to sign up for or keep your Medicare. If you join a Marketplace plan,
- You will most likely pay more for your coverage.
- You may have to pay a penalty for Medicare Parts B and D if you choose to sign up for Medicare later.
- You will not be eligible for any premium tax credits and cost-sharing reductions.
If you become eligible for Medicare while enrolled in a health insurance plan offered through your state’s exchange, you should get written notice that your eligibility for premium tax credits and cost‐sharing reductions will end. You may want to terminate your coverage and enroll in Medicare. You should enroll in Medicare 3 months before you turn age 65.
- You apply for Medicare through the Social Security Administration (SSA). You do not need to apply in-person. Apply online at www.ssa.gov.
- This Medicare publication from the SSA does a good job describing the program.
Those of you on Medicare may also decide to purchase a supplemental insurance policy, referred to as a Medigap policy. It is sold by private insurance companies to fill in the gaps in Original Medicare coverage. It pays some of the health care costs that Original Medicare does not cover. If you are on Medicare and have a Medigap policy, then Medicare and your Medigap policy will pay both their shares of covered health care costs.
While you can purchase secondary health insurance coverage through the Marketplace, these policies are not designed to work with your Medicare. It is not to your advantage to purchase one of these policies on the exchanges to supplement your Medicare coverage. Stick with official Medigap policies.
The bottom line is the same as my starting line – Already on Medicare? Don’t worry about the new health insurance exchanges.
Visit my Health Care Reform page for more information.