Don't confuse Marketplace insurance with Medicare
January 1, 2023 | View PDF
Medicare and Marketplace health insurance can easily be confused, but the two are different federal benefit programs. The Health Insurance Marketplaces were created by the Affordable Care Act. These Marketplaces allow people to buy insurance who do not have (or do not have enough) health insurance. You can access the Marketplace online at http://www.healthcare.gov or by calling 800-318-2596. Plans sold through Marketplaces are also known as Qualified Health Plans. Many people who have a Marketplace plan get cost assistance in the form of tax credits, which help to lower the plan’s monthly premium.
Know how the Marketplace relates to Medicare
If you are eligible for Medicare, you should not use the Marketplace to get health and drug coverage. However, there are two exceptions:
(1) if you are eligible for Medicare because you have End-Stage Renal Disease (ESRD) or in other words, you have kidney disease that requires dialysis or transplant.
(2) if you must pay a premium for Medicare Part A hospitalization insurance due to not having enough work credits as recorded by the Social Security Administration.
If one of these exceptions applies to you, you can choose to enroll in a Marketplace plan instead of Medicare. You should consider all consequences carefully before deciding to take a Marketplace plan instead of Medicare. For example, you might have a gap in Medicare coverage or a late enrollment penalty if you do not enroll when first eligible. It is helpful to discuss your options with one of the certified counselors at the State of Alaska’s Medicare Information Office. Our contact information is at the end of this article.
You do not purchase Medicare Supplement Insurance (Medigap) coverage or obtain a Part D prescription drug plan (PDP) through the Marketplace. It is illegal for someone to sell you a Marketplace plan if they know you are eligible for or are enrolled in Medicare. If someone tries to sell you a Marketplace plan, let them know that you have Medicare and cannot enroll in a Marketplace plan if either of the two above listed exceptions do not apply to your situation.
Changing from a Marketplace plan to Medicare
If you are currently enrolled in a Marketplace plan, you should most likely drop the Marketplace plan and enroll in Medicare when you are first eligible. Here are a few reasons why:
You may have a late enrollment penalty if you do not enroll in Medicare when you are eligible. You may also experience gaps in health insurance coverage.
Marketplace plans do not work with Medicare. If you keep your Marketplace plan, it may not cover you once you are eligible for Medicare.
And, once you are eligible to enroll into premium-free Medicare Part A, you will no longer be eligible to receive cost assistance for your Marketplace plan. Although you may keep your Marketplace plan after becoming eligible for Medicare, it can be very expensive without cost assistance.
If you are currently enrolled in a plan through the federal Marketplace, contact the Marketplace to disenroll at least 14 days before you want your coverage to end. Keep in mind that you want your Marketplace plan to cover you through the end of the month until your Medicare starts, on the first day of the next month. You do not want any gaps in coverage, so timing is important.
For any Medicare related questions, please feel free to contact the State of Alaska Medicare Information Office at 800-478-6065 or 907-269-3680; our office is also known as the State Health Insurance Assistance Program (SHIP), the Senior Medicare Patrol (SMP), and the Medicare Improvements for Patients and Providers (MIPPA) program. If you are part of an agency or organization that assists seniors with medical resources, consider networking with the Medicare Information Office. Call us to inquire about our new Ambassador program.
Sean McPhilamy is a volunteer and Certified Medicare Counselor at the Alaska Medicare Information Office.