Since the passage of the Affordable Care Act (ACA) in 2010, you’ve undoubtedly heard about the Health Insurance Marketplace. How does this impact your Medicare coverage, and can you have both? Find out what you need to know about Medicare and the Health Insurance Marketplace.
What Is The Health Insurance Marketplace?
The Marketplace for health insurance is a service that allows people to shop for and enroll in health insurance plans. In most states, the Federal Government runs this service, which is also known as the Exchange. However, some states operate their own Marketplaces for residents. No matter which entity runs the Marketplace, health insurance options vary depending on where you live and which insurance providers operate in your state.
The government established the Marketplace to help people without medical insurance research their options and secure coverage. All available plans provide what’s known as Minimum Essential Coverage (MEC). Also known as qualifying health coverage, MEC refers to the lowest level of health care insurance that you can have without receiving a financial penalty. Many plans go above and beyond MEC to provide policyholders with additional coverage.
Does The Marketplace Offer Medicare Plans?
Medicare and the Marketplace are separate, and the Marketplace doesn’t offer Medicare plans. Medicare offers federally sponsored health care, while the Marketplace offers coverage through private insurers.
Does Medicare Provide Minimum Essential Coverage?
Some Medicare options provide MEC, but not all do. According to HealthCare.gov, if you have Medicare Part A, then you also have MEC. That means you won’t be penalized.
If you only have Part B, however, you don’t meet MEC guidelines. You’ll have to pay the fee or foot the bill for hospital coverage, since you haven’t received premium-free Part A.
Can You Have Both Medicare and Marketplace Coverage?
As a general rule, you can’t have Medicare coverage and a plan from the Health Insurance Marketplace. That’s because Medicare has put several precautions in place to protect recipients. If an insurance agent knows that you have Medicare, he or she can’t legally sell you a plan from the Marketplace.
- Employer-Sponsored Marketplace Plans: If you have a Marketplace plan through your employer, you can maintain your employer-sponsored plan and delay Medicare Part B enrollment. You’d typically have to pay a fee for late enrollment. Losing employer health care upon retirement, however, grants you a special enrollment period.
- Individual Marketplace Plans: If you have an individual Marketplace plan but you’ll qualify for Medicare coverage soon, you can cancel your Marketplace plan as soon as you’ve enrolled in Medicare. Don’t cancel it until your new Medicare coverage begins, though. You don’t want to risk getting a fine for lack of coverage or incurring medical bills during a gap period between policies. There’s no charge for canceling your Marketplace plan when you choose a Medicare plan.
Should You Choose Medicare Instead of Marketplace Coverage?
For most seniors, cost is a critical component of the health care decision. If you’re like most people, you’ll qualify for premium-free Medicare Part A coverage when you turn 65 years old. That means you’ll receive MEC without having to pay monthly premiums for hospital or skilled nursing home care.
Most people have to pay premiums for Part B, which covers doctor visits and preventive care, but the cost for Part B is much lower than any Marketplace plan. Since paying for Medicare typically lowers health care costs substantially, most people opt to cancel their Marketplace plans and enroll in Medicare as soon as possible.
According to Medicare.gov, Medicare also offers several other benefits. When you choose Medicare, you’ll get more preventive services for less and better treatment coordination.
In addition, unless you qualify for a special enrollment period, you’ll receive a financial penalty if you enroll in Medicare after your initial enrollment period. That means your Medicare coverage will only get more expensive the longer you wait to enroll.
Are There Other Options For Getting Better Coverage With Medicare?
Many people determine that their Original Medicare plan, which includes Part A and Part B, doesn’t offer enough coverage for their medical needs. Fortunately, there are a few options to consider.
- Medicare Advantage Plan: Some qualified recipients opt to replace Original Medicare with a Medicare Advantage Plan.
- Medicare Part D: Others choose to keep Original Medicare andadd-onn Part D, which includes prescription drug coverage.
- Medigap Plans: If you have Original Medicare, you can also choose to add one of 10 standardized Medigap plans for more comprehensive coverage.
Understanding the relationship between Medicare and the Health Insurance Marketplace isn’t always easy, but it’s important to have a complete understanding of your health care options. Want to learn more? Subscribe to United Medicare Advisors’ newsletter for answers to your health care questions and the latest news on Medicare Supplement Insurance.