Marketplace to Medicare


April 15, 2018

Many Americans look forward to their 65th birthday because it means they are eligible to get healthcare through Medicare. For people who were previously buying health insurance through the marketplace, the prospects of a cheaper healthcare is exciting. The question that many of these newly aged-in seniors have is how to transition from Obamacare on the Marketplace to Medicare. Thankfully, the transition should be smooth, but there are a few procedural things you need to be careful of before you make your move.

Quick Information About Medicare Enrollment For 2018

The general time frame for signing up for Medicare starts three months before your 65th birthday, includes the month of your birthday and extends to three months after your 65th birthday. As long as you sign up at any point during that seven-month period, then you will be just fine.

While you have that seven-month window to be considered eligible for Medicare, you still need to be mindful of the standard Medicare enrollment period. You can sign up for Medicare Part A and Part B within the seven-month period wrapped around your birthday, but if you miss the deadline then you will have to wait for the general enrollment period that runs from January 1 to March 31. If you miss the initial deadline and sign-up during the general enrollment period, then your coverage does not start until July 1 and you could face fines for missing your initial Part B sign-up period.

Keeping An Eye On Costs

For most people, Medicare Part A coverage is free and Part B carries a premium. But it is important to know that once your Medicare Part A coverage kicks in, you will no longer get any tax credits or any help in paying your marketplace premium. That means that when your Part A kicks in, you will become responsible for your entire marketplace premium.

Medicare Part B covers your doctor costs, and you must sign up for that when you are first eligible or you risk getting hit with the Part B penalty. Since you sign up for Part A and Part B separately, some people attempt to avoid paying Medicare Part B premiums by allowing their marketplace plans to lapse before starting Part B. As long as you do not allow the seven-month sign-up period for your Medicare eligibility to expire before signing up for Medicare Part B, then you will experience no problems.

Watch For Automatic Enrollment

Many insurance companies in the marketplace have a feature that automatically enrolls you in Medicare when you reach your 65th birthday. While you are sent a notice in the mail about automatic enrollment, many people disregard the notice as junk mail and wind up getting automatically enrolled.

The Medicare program you get automatically enrolled into has a network you must use to get coverage and a strong prescription medication program. But if you don’t opt-out of the automatic enrollment, then the Medicare you sign up for on your own will not go into effect. Check with your marketplace insurance company three months prior to your 65th birthday to check on their automatic enrollment program for Medicare and ask to opt-out if you want to choose your own coverage.

Making The Transition From Individual Under 65 Coverage To Medicare

When you sign up for Medicare Part A and Part B during your eligibility period, you will be given the date when your insurance will take effect. On that day, you should call your marketplace insurance carrier to cancel your marketplace program so that you do not have issues with overlapping coverage. Many people assume that their marketplace insurance policy automatically stops when their Medicare begins, but this is not true.

It would be advantageous to contact your marketplace insurance carrier before your Medicare begins to make sure you understand the cancellation process. Since your tax credits end when your Part A coverage begins, you could wind up with a hefty insurance bill for your marketplace plan if you do not take the necessary steps to cancel it.

When your 65th birthday is on the horizon, it is time to decide whether or not you want to get into a Medicare program. You are not obliged to sign up for Medicare on your 65th birthday. But if you do decide to go with Medicare, then you need to take the steps to ensure you have a smooth transition from your marketplace plan to your new Medicare coverage and enroll right away into Original Medicare, Medicare Part A and Part B.