What Happens to Marketplace Coverage When Medicare Starts?
Does Marketplace Coverage Automatically End When Medicare Starts?
Shanti
9/13/20263 min read
What Happens to Marketplace Coverage When Medicare Starts?
If you currently have health insurance through the Marketplace, also known as ACA coverage, and you are about to become eligible for Medicare, one of the most important things to do is coordinate the end of your Marketplace coverage with the start of your Medicare coverage.
A mistake during this transition could cause you to lose your financial assistance or even require you to repay part of the Premium Tax Credit you received when you file your federal tax return.
Does Marketplace Coverage Automatically End When Medicare Starts? No.
The start of Medicare does not automatically end your Marketplace coverage. If your Medicare coverage is about to begin, you should update your Marketplace application and take steps to end your Marketplace coverage.
In most cases, the goal is for your Marketplace coverage to continue through the day before Medicare begins so there is no gap between the two types of coverage.
For example, if your Medicare coverage starts on May 1, you can report the Medicare start date in advance through your Marketplace application so your Marketplace coverage ends on April 30.
Why Can Keeping Marketplace Coverage After Medicare Starts Be a Problem?
One of the most important issues involves the Premium Tax Credit, which is the financial assistance many people receive to reduce their monthly Marketplace premium.
When Medicare and Marketplace eligibility overlap, you may no longer qualify for this financial assistance.
If you do not end your Marketplace coverage on time and continue receiving the Premium Tax Credit, you may have to repay financial assistance that you were no longer eligible to receive when you file your federal tax return.
When Should You Enroll in Medicare?
For most people who become eligible for Medicare because they are turning 65, the Initial Enrollment Period lasts seven months.
It includes the three months before the month of your 65th birthday, the month of your birthday, and the three months after your birthday month. Delaying enrollment without qualifying for an exception may result in a gap in coverage or, in some cases, a Late Enrollment Penalty.
Can You Keep Medicare and Marketplace Coverage at the Same Time?
In some situations, a person may be able to keep Marketplace coverage after Medicare begins, but they generally may no longer qualify for Marketplace financial assistance and may have to pay the full cost of the Marketplace plan.
Also, having Marketplace coverage in addition to Medicare does not necessarily reduce Medicare expenses such as deductibles, copays, or coinsurance.
For this reason, keeping both types of coverage does not always mean you will have better protection.
What If Your Spouse or Other Family Members Still Need Marketplace Coverage?
Medicare starting for one person does not mean that every member of the household must cancel Marketplace coverage.
For example, if a married couple is enrolled through the same Marketplace application and only one spouse becomes eligible for Medicare, Marketplace coverage can be ended for the person moving to Medicare while coverage continues for the other spouse.
When updating the application, it is important to make sure that family members who still need Marketplace coverage remain enrolled.
Plan Before You Turn 65
If you currently have Marketplace coverage and are approaching Medicare eligibility, it is better not to wait until your 65th birthday to review your options.
A few months before Medicare begins, check the following:
• The exact date your Medicare coverage will begin.
• The date your Marketplace coverage should end.
• Whether you need to enroll in Medicare Part B and prescription drug coverage.
• Whether Medicare Advantage or Original Medicare is more appropriate for your situation.
• Whether your spouse or other family members should remain enrolled in the Marketplace.
Moving from Marketplace coverage to Medicare is not simply replacing one insurance card with another.
Proper timing can help prevent gaps in coverage, unnecessary costs, and problems related to the Premium Tax Credit.
If you are approaching age 65 and currently have Marketplace coverage, carefully review your coverage start and end dates and your available options before making any changes to your health insurance.
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