Medicare and the Marketplaces

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Medicare and the Marketplaces

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Medicare and the Marketplaces


The Medicare Rights Center is a national, nonprofit

consumer service organization that works to

ensure access to affordable health care for older adults and people with disabilities through

Counseling and advocacy

Educational programs

Public policy initiatives

Medicare Rights Center


This toolkit for State Health Insurance Assistance

Programs (SHIPs), Area Agencies on Aging (AAAs),

and Aging and Disability Resource Centers (ADRCs)was made possible by grant funding from theNational Council on Aging.

The National Council on Aging is a respected national leader and trusted partner to help people aged 60+ meet the challenges of aging. They partner with nonprofit organizations, government, and business to provide innovative community programs and services, online help, and advocacy.

National Council on Aging


Learning objectives

Explain Health Insurance Marketplaces and Qualified Health Plans (QHPs)

Understand what Medicare beneficiaries should know about Marketplace coverage

Review Small Business Health Options Program (SHOP) available through Marketplaces

Explain Medicare basics

Identify how beneficiaries with SHOP coverage should approach Medicare enrollment


Medicare basics



Federal program that provides health insurance for those 65+, those under 65 receiving Social Security Disability Insurance (SSDI) for a certain amount of time, and those under 65 with kidney failure requiring dialysis or transplant

No income requirementsTwo ways to receive Medicare benefitsTraditional program offered directly through federal governmentPrivate plans that contract with federal government to provide Medicare benefitsOriginal MedicareMedicare Advantage


Parts of Medicare

Medicare benefits administered in three parts

Part A – Hospital/inpatient benefitsPart B – Doctor/outpatient benefitsPart D – Prescription drug benefit Original Medicare includes Part A and Part BPart D benefits offered through stand-alone prescription drug planWhat happened to Part C?  Medicare Advantage Plans (e.g., HMO, PPO)Way to get Parts A, B, and D through one private planAdministered by private insurance companies that contract with federal governmentNot a separate benefit: everyone with Medicare Advantage still has Medicare


Medicare eligibility: 65+

After turning 65, individual qualifies for Medicare if they

Collect or qualify to collect Social Security or Railroad Retirement benefitsOR are a current U.S. resident and eitherA U.S. citizenOR a permanent resident having lived in the U.S. for five years in a row before applying for Medicare


Medicare eligibility: Under 65

Individual not yet 65 qualifies for Medicare if

They have received Social Security Disability Insurance (SSDI) or Railroad Disability Annuity checks for total disability for at least 24 months  If they have amyotrophic lateral sclerosis (ALS), there is no waiting period, and they are eligible for Medicare when they start receiving SSDIOR they have End-Stage Renal Disease (ESRD or kidney failure) and they or a family member have enough Medicare work history


Medicare Part D

Outpatient prescription drug benefit for anyone with Medicare

Individual is eligible for Part D if they have Part A or Part BOnly available from private insurance companies Two ways to get Part D drug coverage:If beneficiary has Original Medicare, they can purchase a stand-alone prescription drug planIf beneficiary has MA Plan, Part D is generally included, and beneficiary receives all Medicare benefits from one planStand-alone plans and MA Plans have monthly premiumBeneficiaries with low incomes can get help with costs


Creditable coverage

Drug coverage considered as good as or better than Part D

Individuals with creditable coverage will not have to pay a late enrollment penalty if they switch to Part D using Special Enrollment Period (SEP)Employers or plans should send current and former employees annual notice declaring whether or not their drug coverage is still considered creditableBeneficiary is eligible for SEP if:They lost creditable drug coverage through no fault of their own or their benefit was reduced and is no longer creditable


Seven-month period including the three months before, the month of, and three months following a beneficiary’s 65


birthdayCoverage starts depending on when in the IEP a person enrollsSome are automatically enrolled in Part A and BInitial Enrollment Period


Medicare costs


Part APart B Part DPremiumMonthly premium for those with fewer than 10 years of Social Security work historyMost people do not pay premium for Part AMonthly premium Monthly premium DeductibleDeductible for inpatient hospital staysAnnual deductibleAnnual deductible, depending on planCopayment and/or coinsuranceDaily coinsurance for inpatient hospital stays after day 60; daily coinsurance for skilled nursing facility (SNF) stay after day 20

20% coinsurance for covered outpatient services

Copayment or coinsurance for covered prescription drugs

Individual with Medicare can generally expect to pay premiums, deductibles, and copayments or coinsurance for covered care


Extra Help

Federal program that helps pay deductibles, premiums, copays, and coinsurances for Medicare Part D (prescription drug benefit)

Has federally set income and asset limitsIndividuals pay no premium or very low premiumIndividuals pay low copayments for Part D-covered drugs


Health Insurance Marketplaces


Requirement for health coverage

Starting 1/1/14, U.S. residents must have minimum level of health coverage, called minimum essential health coverage

Requirement known as individual mandateResulted from Affordable Care Act (ACA)Minimum essential health coverage includes: Medicare, Medicaid, most employer insurance, or Marketplace insurancePeople who fail to obtain minimum essential coverage need to pay tax penalty unless they meet financial hardship criteria


Marketplace basics

Forums where uninsured or under-insured individuals, and also businesses, can shop for health coverage

Sometimes known as Exchanges or state-specific namesTypes of insurance offered through Marketplaces include:Qualified Health Plans (QHPs)Small Business Health Options Program (SHOP) plans Consumers can compare available plans based on price, benefits, services, quality


State variation

Marketplace in every state and District of Columbia

Marketplace operation may vary from state to state, as states may:Run their own MarketplacePartner with federal government Rely exclusively on federal government to run their Marketplace


Qualified Health Plans

Private health insurance policies that meet protections and requirements set by ACA

Follow federally established cost-sharing limitsProvide essential health benefitsMeet minimum essential coverage requirement, also known as individual mandate


Paying for QHP coverage

Individuals with income between 100% and 400% of federal poverty level (FPL) can receive QHP premium cost assistance (tax credits)

Individual may be ineligible for tax credits if they are:Eligible for MedicaidOr eligible for MedicareSome exceptions may apply


Marketplace Open Enrollment

Used to enroll in Marketplace plan for the first time or make coverage changes

Marketplace Open Enrollment Period (November 15 - December 15) Overlaps with Medicare Fall Open Enrollment Period (October 15 – December 7)Important: People with Medicare should use Fall Open Enrollment to make changes to their coverage


Medicare and the Marketplaces

Marketplaces do not affect Medicare coverage

Medigap policies, Medicare Advantage Plans, and stand-alone Part D plans are not sold through MarketplacesIn most cases, beneficiaries should enroll in Medicare when eligible or potentially face:Gaps in coverage and late enrollment penaltiesLoss of tax credits for those with QHP, meaning individual will pay higher monthly premiums to keep QHP coverageNote: Medicare Part A fulfills ACA’s minimum essential coverage requirement


Unwise to drop Medicare for QHP

Illegal for Marketplace sales representatives to sell QHPs to people with Medicare

Medicare beneficiaries should not drop their coverage to enroll in QHPNote: With some exceptions. See the Marketplace for People with Medicare FAQ for more information.Medicare is typically less costly than QHP for those who are Medicare-eligibleMost people who qualify for Medicare will not qualify for tax credits to help pay QHP premiumsPart A is premium-free for most beneficiariesPremiums for Part B, Part D, and Medigaps cost less than QHPs and provide more coverage


Transitioning to Medicare from QHP

Most people with QHPs should enroll in Medicare once they become eligible and drop their QHP

Beneficiary should enroll in Medicare Parts A, B, and D during their IEPKeep track of when beneficiary first qualifies for MedicareActively enroll beneficiary if they are not auto-enrolled Contact Social Security Administration to enroll: 800-772-1213


Marketplace disenrollment

Beneficiary should notify QHP representative of their intent to

disenroll at least 14 days before Medicare coverage beginsAsk plan representative for disenrollment steps if enrolled in a family plan This helps ensure that disenrollment does not affect family members’ coverage


Considerations before delaying Medicare enrollment

Delayed enrollment may result in:

Late enrollment penalties on Medicare premiumsGaps in coverage Also, Medicare-eligible individuals likely have to pay full QHP premiumRemember, beneficiaries eligible for premium-free Part A lose QHP premium tax creditsException: Beneficiaries who pay premium for Part A can continue receiving premium tax credits but should still consider the consequences of delaying Medicare enrollmentFinally, QHPs may not pay claims for Medicare-eligible individuals


Part B late enrollment penalty (LEP)

10% premium penalty for each 12-month

period of delayed enrollment added to current Part B premium ($134 in 2017)Must be paid every month as long as individual has Medicare, with few exceptionsIndividuals who delay Medicare enrollment to stay in a QHP will likely be subject to Part B LEPExample: Individual delayed Part B enrollment for two years, so LEP = ($134 x 10%) x 2 = $13.40 x 2 = $26.80


Strategies for late Part B enrollment

If beneficiary delayed Medicare enrollment, they may be able to remove penalties or gaps in coverage later

If their Medicare eligibility changes For example, when disabled beneficiary turns 65 and becomes eligible due to age If they enroll in Medicare Savings Program (MSP)Must meet income requirements If they are awarded equitable reliefFederal law lets people request relief from Social Security Administration (SSA) in the form of immediate or retroactive Medicare enrollment and/or elimination of Part B premium penalty—must meet specific requirements


Strategies for late Part D enrollment

If beneficiary delayed Part D enrollment and did not have creditable coverage, they may be able to remove penalties or gaps in coverage later

If they are eligible for Extra Help program, whichLowers prescription drug costsProvides monthly Special Enrollment Period (SEP), meaning that beneficiaries can switch their Part D plan monthly if plan does not meet their needsContact Social Security Administration to enroll: 800-772-1213


General Enrollment Period (GEP)

Beneficiaries who are ineligible for equitable

relief or an MSP may need to use GEP to enroll in MedicareJanuary 1 through March 31 each yearSign up for Part B with coverage beginning July 1Beneficiary may have no coverage until thenUsing GEP to sign up typically means incurring late enrollment penalty


Medicare and the

Small Business Health Options Program (SHOP)


SHOP basics

Program within Marketplace where small businesses and their employees can search for and purchase health coverage

SHOP should:Guarantee small businesses choice of plans to offer employeesPost health plan information on state’s website to allow comparisons among plans


Participation in the SHOP

Companies can generally only participate in their state’s SHOP if they have 50 or fewer employees (though states may allow up to 100)

Must offer SHOP plan coverage to all full-time employees (30+ hours)In many states, at least 70% of employees must be covered (either by SHOP plan or other form of coverage) for business to participate in SHOPSole proprietors/self-employed individuals cannot participate in the SHOPMust buy Marketplace QHPsOver 50employeesSole proprietor50 or fewer employees

Who can participate in SHOP?


SHOP and Medicare eligibility

SHOP plans follow same rules as other insurance based on current work (job-based insurance)

Medicare-eligible individuals may choose to delay Medicare enrollment without penalty depending on:Size of employerWhether person’s Medicare eligibility is based onAgeDisability The following slides discuss SHOP plans and enrollment in Parts B and D


SHOP andMedicare enrollment


Part B Special Enrollment Period

Most beneficiaries with SHOP coverage qualify for SEP to delay Part B without incurring late enrollment penalty or facing gaps in coverage*

Two criteria for individual to be eligible for Part B SEP:Must have insurance from current work (their job, spouse’s job, or sometimes a family member’s job)—or have had such insurance within past 8 monthsMust have been continuously covered since becoming eligible for Medicare, including month they became eligible for MedicareNo SEP if individual has more than 8 consecutive months without coverage from either Medicare or job-based insurance


Primary and secondary insurance

When beneficiary has Medicare and another type of insurance, Medicare pays either primary or secondary for medical claims

Primary insurance pays first on claimSecondary insurance pays after primary insuranceUsually pays all or some of the costs left after primary insurer pays (e.g., copays, deductibles) If primary insurer denies claim, secondary insurer may or may not make independent determination on it, depending on plan


Medicare is primary: Fewer than 20 employees (65+)

Medicare is primary for those covered by SHOP plan from employer with fewer than 20 employees

Plan can be individual’s or their spouse’sMay be able to keep SHOP plan as secondaryPart B SEP still appliesMedicare primary/secondary status doesn’t change this


Medicare is secondary: 20+ employees (65+)

SHOP plan is primary

Individual covered by their or their spouse’s SHOP plan don’t necessarily need to take Part BCan delay enrollment and use Part B SEP for up to 8 months after they no longer have job-based insurance


Medicare is primary: Fewer than 100 employees (disability)

Medicare is primary for those with disabilities who are covered by SHOP plan from employer with fewer than 100 employees

Plan can be individual’s, their spouse’s, or other family member’sMay be able to keep SHOP plan as secondaryPart B SEP may still applyOnly eligible for SEP if health coverage is from their own or their spouse’s employer, not from another family member


SHOP coverage and Part B

Beneficiaries with SHOP plans that are secondary should take Part B for primary coverage

Delaying Part B coverage may result in their SHOP plan:Paying little or nothing for careRecouping payments it made when Medicare should have been primaryIf the SHOP plan pays first, beneficiaries may consider delaying Part B 41


SHOP and Part D

Beneficiaries with creditable coverage from SHOP may choose to delay Part D enrollment

Can enroll in Part D within 63 days of losing creditable coverage to avoid penalties and gaps in coverageThose without creditable coverage should enroll in Part D when Medicare-eligibleMust enroll in either Part A or Part B to get Part D coverageIf beneficiary did not have creditable coverage, see slide #29 for strategies for eliminating penalties and gaps in coverage





Medicare beneficiaries should not look to Marketplaces for health insurance

Most Medicare-eligible individuals should disenroll from their QHP and get Medicare Medicare is primary for eligible individuals in SHOP plans if they are:Under 65 and qualify for Medicare due to a disability Over 65 and their SHOP plan is through an employer with fewer than 20 employeesMedicare is secondary for eligible individuals in SHOP plans if they are:Over 65 and their SHOP plan is through employer with 20+ employees


Resources for information and help

Local State Health Insurance Assistance Program (SHIP) Social Security Administration800-772-1213 Medicare1-800-MEDICARE (633-4227)www.medicare.govMedicare Rights National Council on


Medicare Interactive

Web-based compendium developed by Medicare Rights for use as a look-up guide and counseling tool to help people with MedicareEasy to navigateClear, simple languageAnswers to Medicare questions and questions about related topics2+ million annual visits


Medicare Interactive Pro (MI Pro)

Web-based curriculum that empowers professionals to better help clients, patients, employees, retirees, and others navigate Medicare

Four levels with four to five courses each Quizzes and downloadable course materialsBuilds on 25 years of Medicare Rights Center counseling experienceFor details, visit or contact Jay Johnson at 212-204-6234 or

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