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I am about to turn 65 and go on Medicare, and my income is $120,000. I am not married. I know that people with higher incomes are required to pay higher premiums for Medicare Part B and Part D. To avoid paying these higher Medicare premiums, can I sign up for health insurance from a Marketplace plan now instead of enrolling in Medicare when I turn 65?

If you are not yet enrolled in Medicare, you can buy health insurance coverage through the Marketplace before you turn 65, and if you have a Marketplace plan, you can choose to renew it after you turn 65.  But once you turn 65 and become entitled to Medicare coverage, you cannot buy a new Marketplace plan.  This is because insurers are prohibited from selling health insurance coverage that duplicates what you have under Medicare, if they know you are covered by Medicare.

If you are considering renewing a Marketplace policy after you turn 65 and become eligible for Medicare, there may be downsides to this choice.

First, your total costs could be higher with a Marketplace plan than with Medicare, even if your income is high enough that you are required to pay income-related premiums for Medicare coverage.  At your current income level in 2018, you would pay about $4,000 in annual Medicare premiums ($3,215 for Part B and around $823, on average, for Part D.)  You would also likely buy a Medigap supplemental policy to help cover Medicare deductibles and limit annual cost sharing.  The average cost of Medigap is roughly $2,000, though premiums can vary widely depending on the plan you choose, your age, and where you live.

By comparison, premium for a Marketplace policy will vary depending on where you live, your age, and the plan you choose.  In 2018, the national average premium for the lowest cost bronze plan for a 64-year-old was about $9,500 and the average annual deductible under bronze plans was about $6,000.  Most Marketplace participants pick silver plans. On average, the premium for the benchmark silver plan for a 64-year-old was about $13,500 in 2018 – much higher than the total premiums for Medicare – and the average silver plan deductible was about $4,000.  Also keep in mind that the combination of Medicare plus a Medigap policy would offer you more comprehensive coverage with lower overall out-of-pocket costs than a Marketplace plan.

Second, you should also be aware there would likely be differences in access to doctors, hospitals, and prescription drugs between Marketplace plans and Medicare.

Third, keep in mind that if you sign up for a Marketplace plan, rather than enroll in Medicare Part B when you are first eligible to do so, and then later you decide to sign up for Medicare, you may be required to pay a penalty for delaying enrollment in Medicare Part B.  Your monthly Part B premium may go up 10% for each year that you could have had Part B, but didn’t.  You may also owe a late enrollment penalty for Part D drug coverage, which is equal to 1% of the national average premium amount for every month you didn’t have coverage as good as the standard Part D benefit Marketplace.

Finally, if you have Marketplace coverage when you become eligible for Medicare, and decide to drop your Marketplace plan, you need to contact your plan to terminate your Marketplace plan yourself.  It will not happen automatically when your Medicare coverage begins. Your insurer cannot terminate your Marketplace coverage unless you tell them you want this coverage to end.

Is the open enrollment period the same for Medicare and the Marketplaces?

There is some overlap in the enrollment periods for Medicare and the Marketplaces, but this year they are not the same.  The Medicare open enrollment period runs from October 15 through December 7 each year.  For Marketplace coverage in 2019, the open enrollment period will run from November 1, 2018 through December 15, 2018 in states that use the HealthCare.gov website.  Some states that run their own Marketplaces will have a somewhat longer Open Enrollment period for 2019 coverage.  Check with your state Marketplace for more information.

If you are covered by Medicare, and you are interested in reviewing and comparing your Medicare coverage options, make sure the plans you are considering during the open enrollment period are Medicare plans, not Marketplace plans.  Medicare plans are not sold through the federal or state Marketplace websites.  You can review and compare your Medicare options on the Medicare website (www.Medicare.gov) or by calling 1-800-MEDICARE.

Are Medicare Advantage plans, Medicare Part D drug plans, or Medigap policies sold through the Marketplace?

No.  Medicare Advantage plans (such as Medicare HMOs and PPOs), Medicare Part D prescription drug plans, and Medigap policies are not sold through the federal or state Marketplaces.  You can enroll in a Medicare Advantage plan or a Medicare Part D plan on the Medicare website (www.Medicare.gov) or by signing up directly with the company that offers the plan.  To learn more about your coverage options under Medicare, including the Medicare Advantage plans, Part D drug plans, and Medigap supplemental policies available in your area, and how to enroll, you can go to the Medicare Plan Finder on www.Medicare.gov or call 1-800-MEDICARE.

I am over age 65 and covered by Medicare, but I’m wondering if I can purchase one of the health plans offered through the Marketplace and drop my Medicare coverage? Is that an option for me or should I keep my Medicare?

If you have Medicare, you should keep it.  In fact, companies that sell Marketplace plans are prohibited from selling these plans to you if they know you are covered by Medicare.  If you do drop Medicare, and choose to re-enroll later, you can only re-enroll during the Medicare general enrollment period (from January 1 to March 31), and your coverage would not begin until July of that year.  You also may face a penalty for late enrollment.  If you don’t sign up for Part B when you’re first eligible or if you drop Part B and then sign up again later, your monthly Part B premium may go up 10% for each year that you could have had Part B, but didn’t.  You may also owe a late enrollment penalty for Part D drug coverage, which is equal to 1% of the national average premium amount for every month you didn’t have coverage as good as the standard Part D benefit.

I’m 63 and my spouse is 65 and on Medicare. Our income is less than 400% of FPL so I need help affording the premium in the Marketplace. Can we count what my spouse has to pay for his Medicare premiums and supplemental and Part D premiums against what I will be required to contribute toward coverage in the Marketplace?

No. Your eligibility for premium tax credit subsidies and the amount of your premium tax credit will be based on your family income. The amount your spouse pays for his Medicare, Part D, and supplemental insurance premium costs will not be taken into account.

My spouse is an early retiree with affordable retiree health benefits from his former employer, but I’m not eligible to be on his plan. Can I apply for coverage and subsidies in the Marketplace?

Yes, assuming you meet the other requirements, you can apply for health plans and premium tax credits in the Marketplace. Your spouse’s eligibility for early retiree coverage will not affect your ability to seek coverage and financial help in the Marketplace.

I’m 63 and about to retire. I’ll be offered a retiree health plan. Can I look for better coverage and subsidies in the Marketplace instead?

Yes. Most early retiree health plans are considered minimum essential coverage, and thus meet an individual’s requirement for coverage. However, if you want to obtain coverage through the Marketplace, you may do so, and if your income is at or below 400% of the Federal Poverty Level, you are eligible for premium tax credits. Eligibility for retiree coverage will not affect your eligibility for Marketplace coverage and subsidies.

I’m 63 and enrolled in a retiree health plan from my former employer. Can I look for better coverage and subsidies in the Marketplace?

Yes, as long as you do so during the Open Enrollment period.

People with employer-provided retiree health benefits should know that most early retiree health plans are considered minimum essential coverage, and thus meet an individual’s requirement for coverage.

If you are enrolled in such coverage, you can also look at coverage options through the Marketplace, and if your income is between 100% and 400% of the Federal Poverty Level, you may qualify for premium tax credits. However, there’s one exception. Some employers may provide retired employees with access to an account, called a health reimbursement arrangement (or HRA) that the retiree may use to reimburse medical expenses, including an individual policy through a Marketplace or in the non-group market. A retiree that signs up for an HRA offered by a former employer is considered to have minimum essential coverage from an employer and would therefore would not be eligible to claim a premium tax credit if he or she enrolled in a Marketplace plan.

Remember that outside of Open Enrollment, you cannot voluntarily drop your retiree coverage and replace it with other Marketplace coverage.