You can't join a Healthcare Marketplace plan if you qualify for Medicare, but if your spouse doesn't qualify, they can.
Obamacare plans, more officially known as Marketplace plans, are health plans available to individuals who qualify as a result of the Affordable Care Act, or ACA. The Healthcare Marketplace is a tool that allows eligible individuals to qualify for these lower-cost health plans. If you have one of these plans or are going to enroll in one, then understanding how they relate to Medicare is essential.
We’ll cover some general rules regarding Marketplace plans and Medicare, as well as a few specific scenarios you may find yourself in if you have one or both of these health insurance plans.
Understanding the Health Insurance Marketplace
The Health Insurance Marketplace is an insurance exchange that allows you to buy plans that are subsidized by the government through the Affordable Care Act. These plans will only be available to qualifying individuals, and will usually come at lower costs than other plans available on the broader market.
Many features of the Healthcare Marketplace could be discussed, but we’ll focus only on those that relate to Medicare coverage.
Can You Have Both?
Although the answer is more complicated and we will provide further details below, the simple answer is no. Generally speaking, you cannot have both Medicare and a plan purchased on the Healthcare Marketplace. This may also be referred to as an Affordable Care Act plan, an ACA plan, or an Obamacare plan.
Let’s take a look at how this breaks down in a few specific scenarios.
What if I Already Have Medicare?
You may find yourself in a position in which you are already completely enrolled in Medicare, but are interested in adding an insurance plan from the Healthcare Marketplace. This is not possible to do. It is legally prohibited to sell anyone a Marketplace plan if they know that you are enrolled in Medicare.
The one exception is a situation in which you have Medicare Part A, but have to pay for the premiums. In this case, you can drop your coverage and switch to a marketplace plan.
If you want more coverage, your best choice is to purchase a Medicare Supplement plan, Medicare Advantage plan, or Part D prescription drug plan depending on your needs. This will allow you to extend your coverage in a legally compliant way.
What if I Am Eligible for Medicare, but Not Enrolled?
If you are eligible for Medicare, there are a few reasons you may have delayed enrollment. Some people choose to do this if they have to pay the Part A premium, or if they already have employer-based health coverage through their job.
If you enroll in a Marketplace plan while eligible for Medicare, then barring some other circumstance, you may have to pay a late penalty when you do enroll in Medicare. However, it will be possible to enroll in a Marketplace plan. Whether or not this is the best option depends on your specific situation.
Medicare Eligibility will usually begin around your 65th birthday, during the Initial Enrollment Period. This is the most convenient time to enroll in Medicare, and you should plan to cancel your Marketplace plan during this time. You can enroll in Original Medicare, which gives you Part A coverage as well as Part B, or a Medicare Advantage (Part C) plan during the Initial Enrollment Period. You can cancel your Marketplace coverage via Healthcare.gov.
Other Enrollment Periods
If you missed your Initial Enrollment Period, you can also enroll in Medicare during the Open Enrollment Period each year, as well as the Special Enrollment Period. Medicare enrollment is only available during these periods, so you will have to time the end of your Marketplace coverage accordingly.
If you do not enroll during the Initial Enrollment period and don't have a suitable reason for delaying your coverage, you may have to pay the late enrollment penalty.
What if I Have a Marketplace Plan, Then Become Eligible for Medicare?
If you are already enrolled in a Marketplace health plan, and then become eligible to enroll in Medicare, then you should cancel your Marketplace coverage to coincide with the beginning of your Medicare coverage.
Once you are either eligible for or enrolled in Part A of Medicare, you won’t be eligible to receive help paying for your Marketplace plan premiums anymore. Technically, you can keep your Marketplace plan even when you have Medicare. But, you will no longer receive any help paying for your plan.
What if I Have Medicare Due to ESRD?
In addition to receiving Medicare as a result of turning 65, some beneficiaries qualify as a result of End-Stage Renal Disease. If you have End-Stage Renal Disease, then you can still qualify to purchase a Marketplace plan. However, this will only be the case if you don’t already have Medicare Part A or Medicare Part B.
As with the other situations described above, the main thing to consider is that you should avoid having both a Marketplace plan and Medicare at the same time. But, individuals with End-Stage Renal Disease are not required to enroll in Medicare and can choose Marketplace plans instead.
Can I Get a Dental Plan Through Marketplace?
Medicare doesn’t cover dental benefits at all, so many people end up finding a private dental plan once they receive Medicare coverage. If you have Medicare and qualify to purchase a Marketplace plan, you may be able to purchase a dental plan through Marketplace.
If your state runs Marketplace through the federal government, then you will not be able to buy a standalone dental plan through Marketplace, only a complete health plan. However, some states run their own Marketplace, in which case you may be able to buy a standalone dental plan if one is available.
What About Prescription Drug Coverage?
if you have Original Medicare, then you will still need coverage for drugs. Some private drug plans are creditable under Medicare. This means that the plans offer at least the level of coverage that Medicare prescription drug plans do.
Not all Marketplace drug plans are going to be creditable. However, there are rules in place that state that plans are required to let you know if they are creditable or not, so it should be easy to find out.
If you are interested in prescription drug coverage, then the most popular option is still Part D prescription drug plans. Medicare Part D coverage works well for most people's situation, and is often very convenient. Nevertheless, it is good to explore some private plans as well.
Are Medigap Plans Sold Through Marketplace?
No, Medigap plans are not sold through Marketplace. These plans, also known as Medicare Supplement plans, help provide additional coverage for your out-of-pocket costs under Original Medicare. Although these plans are private, they are not sold via Marketplace.
Key Things to Remember about Marketplace Plans
The variety of different scenarios can make understanding how Marketplace interacts with Medicare a bit complicated. Although there are many different possibilities, including ones not described here, there are a few key things to remember.
In general, you should not try to mix Medicare and Marketplace plans or switch from Medicare to Marketplace. There are a few situations in which it is possible, but it is not advised and will not be possible under most circumstances. If you are eligible for Medicare, you should transition to it in most circumstances. If you think you have a good reason to stay with a Marketplace plan, make sure to talk to the Centers for Medicare and Medicaid Services or Social Security to find out more information.
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