When to Enroll in Medicare If You Are On an Affordable Care Act Health Insurance Plan

ACA "Obamacare" and Medicare

ACA Obamacare and Medicare

If you are approaching age 65 and you are currently enrolled in a health insurance plan through the Affordable Care Ace (which is also referred to as ACA coverage, or just simply as Obamacare), then you may be wondering when the best time will be for you to enroll in Medicare.

But before you make any changes to your present health insurance coverage, though, it is important that you know what you options are, and why you may or may not want to choose one over another.

Medicare’s Health Care Insurance Options

For those who are eligible for Medicare, there are different options for obtaining the health care coverage that you may need. One way is to go with “Original Medicare.” This includes Medicare Part A (for in-patient hospitalization coverage) and Part B (for doctors’ and medical services). These options are offered directly through Medicare itself.
While many people do not have to pay a premium for Medicare Part A, there is a monthly charge for Medicare Part B coverage. In most cases, Part B costs $134 per month (in 2018). However, if you are considered to be a higher income earner, then this premium could go as high as $428.60 per month. The Part B premium is typically taken directly out of your Social Security retirement income benefits.

If you go the route of Original Medicare, and you also want to have prescription drug coverage, then you can add a Medicare Part D plan. These plans are offered by private insurance carriers, so the actual benefits that are provided, as well as the premium that is charged, can differ depending on where you purchase the plan.

In order to help with the cost of some (or even all) of your Original Medicare out-of-pocket cost responsibility, you could also choose to purchase a Medicare Supplement (or Medigap) insurance plan. These insurance coverage options, of which there are currently ten different plans to choose from, can help with alleviating your expenses for Medicare’s deductibles, copayments, and / or coinsurance charges.

Alternatively, you could instead go with a Medicare Advantage plan for your Medicare coverage. Also known as Medicare Part C, Medicare Advantage plans provide the same benefits that are offered in Medicare Parts A and B. These plans may also have added coverage, too, such as dental, vision and / or wellness benefits.

In addition, there are many Medicare Advantage plans that will also include coverage for prescription medications. Similar to with Medicare Part D, Medicare Advantage plans are also sold via private insurance companies, so the list of coverages and the premium cost can vary from one to another.

Obamacare or Medicare – Which Health Insurance Coverage Option Should You Choose?

Depending on whether you and / or your spouse is still employed, it is possible that you are covered for your health care costs through Obamacare. This may be via an employer-sponsored health insurance plan, or through an individual health insurance policy that you purchased through the health insurance market place, or “exchange.”

So, when the time comes for you to qualify for Medicare, you may want to know whether you should you keep your current ACA (Affordable Care Act) plan, or if you should instead go with Medicare coverage? The answer here is that it depends.

If, for instance, you are currently enrolled in a health insurance market place plan at the time that you also become eligible for Medicare coverage (either through an individual plan or through a Small Business Health Options Program plan), then in most instances, you can keep your current ACA coverage.

In this case, however, there will be no coordination of benefits between Medicare and your market place coverage. In addition, the health insurance market place plan is not required to cover your health care expenses if you are also enrolled in Medicare coverage.

It can be advantageous, though, for you to determine whether or not the actual benefits of either plan may be better for your particular medical-related requirements, as well as in terms of how much you may end up paying out-of-pocket each year. When doing so, it could be that moving forward with enrollment in Medicare is the better alternative.

For example, if you are eligible for premium-free Medicare Part A, then it can usually make sense to accept this coverage, and move forward with enrollment in Medicare. In this case, once you have qualified for Medicare, you will lose any advance premium tax credit that you were eligible for via your health insurance market place coverage.

In addition, it is possible that you could also end up with potential “gaps” in your health insurance coverage, and / or incur a late enrollment penalty that could essentially end up making your Medicare Part A, B, and / or D premiums higher whenever you do enroll in the future – and these higher premiums can last for the remainder of your life.

*Note that if you are not eligible for premium-free Medicare Part A, you may be required to pay up to $422 per month (in 2018) for your Part A premiums. Therefore, be sure that you also factor this into the overall cost equation if you fall into this particular category.

Is Medicare Part of the Affordable Care Act?

Even though there were some changes made to Medicare due to the Affordable Care Act (ACA), it is important to understand that this Act did not replace Medicare. Nor is Medicare a part of the federal health insurance market place. Likewise, there is no “coordination” of benefits between these two health insurance programs.

In addition, you will not find any Medicare-related health insurance plans – such as Medicare Supplement, Medicare Advantage, and Medicare Part D prescription drug coverage – available for purchase in the health insurance market place.

If you are already enrolled in Medicare for your health care coverage – either through Original Medicare or with a Medicare Advantage plan – then it is not required that you make any changes to your coverage based on the Affordable Care Act.

Can You Choose an ACA Plan Over Medicare Coverage?

If you are currently considering making a change to your health insurance coverage, and you are now eligible for Medicare, then you won’t be allowed to sign up for a new market place plan – other than in just a few specific exceptions.

These exceptions can include the following:

  • You do not qualify for premium-free Medicare Part A.
  • You are only enrolled in Medicare Part B (for doctors’ and medical services), and you are also not eligible for premium-free Part A coverage. In this case, you may be able to drop your Medicare Part B coverage and instead enroll in a health insurance market place plan.
  • You are eligible for Medicare due to certain health conditions. In this instance, you are allowed to enroll in a market place plan rather than enrolling in Medicare – provided that you are not currently enrolled in Medicare.
  • You are not yet receiving Social Security retirement income benefits and you are not yet eligible for Medicare coverage. In this case, it is important to note that most people are enrolled automatically in Medicare Part A and Part B – Original Medicare – if they are receiving Social Security income when they are initially eligible for Medicare benefits).
  • You are qualified for Medicare due to a disability, but you are still in the “waiting period” before your Medicare coverage begins.
  • Even if you are eligible to enroll in an ACA health insurance plan based on the above exceptions, if you opt to go this route for your health care coverage, then you will not be able to enroll in Medicare, even for the purpose of “supplementing” your market place insurance coverage.

How to Determine Your Next Step for Health Care Coverage

The health insurance market place can be fraught with a maze of various options, which in turn can make choosing the right plan somewhat overwhelming. But the good news is that there are ways to help you narrow down the right coverage plan for you and for your budget.

For example, discussing all of your possible health insurance coverage options with a professional who is well versed in the Medicare and ACA marketplace can be extremely beneficial – and it can also help you to sort out which is the best direction for you to go. Doing so can also help to answer any of the additional questions or concerns that you may have.

Having a clearer understanding of the health insurance plan that you opt for can allow you to better anticipate what will – and won’t – be covered, as well as what you may be able to expect each year in terms of any out-of-pocket cost responsibilities.

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Author Bio: Ben started Prepare for Medicare in 2014 to help people help people get objective answers to questions about Medicare. He’s held leadership roles at numerous Fortune 500 Medicare health insurers in product development, sales, marketing and strategy for over 20 years.