If you’ve been selling Marketplace plans for the past five years, then you probably have a number of clients who are currently receiving premium tax credits. As these clients approach age 65, it’s important to let them know that they will no longer be able to receive a premium tax credit when they sign up for Medicare. Both Healthcare.gov and Medicare.gov have pages devoted to educating consumers about this topic, but it’s unlikely that your clients will read this information unless you point it out to them.
Here’s what Healthcare.gov says about changing from Marketplace to Medicare coverage:
If you have a Marketplace plan, you can keep it until your Medicare coverage starts. Then you can end your Marketplace plan without penalty.
If you like, you can keep your Marketplace plan too. But once your Medicare Part A coverage starts, you’ll no longer be eligible for any premium tax credits or other cost savings you may be getting for your Marketplace plan. So you’d have to pay full price for the Marketplace plan.
Here’s an Example
Again, from the Healthcare.gov website:
Let’s assume you have a Marketplace plan and are turning 65 sometime this year. Once you’re eligible for Medicare, you’ll have an Initial Enrollment Period to sign up for Medicare. For most people, the Initial Enrollment Period starts 3 months before their 65th birthday and ends 3 months after their 65th birthday.
In most cases it’s to your advantage to sign up for Medicare when you’re first eligible because:
- Once your Medicare Part A coverage starts, you won’t be eligible for a premium tax credit or other savings for a Marketplace plan. If you kept your Marketplace plan, you’d 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.
For those who want to cancel their Marketplace plan
Most people, of course, will want to cancel their Marketplace coverage once they’re enrolled in Medicare and are no longer eligible for a premium tax credit. As HHS points out, it is important that your clients do not end their Marketplace plan until they know for sure when their Medicare coverage will start, and the Medicare start date will vary depending on your client’s situation. If a member accidentally cancels his or her Marketplace plan too early, he or she will not be able to re-enroll until the next annual open enrollment period.
Do you sell Medicare-related products?
As your clients drop off of Marketplace plans and enroll in Medicare, you’ll want to let them know that Medicare alone is not enough. Most clients will want to sign up for a Medicare Supplement and a Part D drug plan or a Medicare Advantage Prescription Drug (MAPD) plan. If you also sell Medicare-related products, then you can help your individual clients as they transition into Medicare. If you do not currently sell Medicare-related products but would like to start, please contact AHCP – we’re happy to help.