Transitioning from Obamacare (marketplace) to Medicare

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jaytrain52
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Joined: Tue Jan 15, 2019 10:57 am

Transitioning from Obamacare (marketplace) to Medicare

Post by jaytrain52 »

Turning 65 in July. I would like to stay on my current Marketplace health insurance plan for the entire year of 2021, as I receive a subsidy making my insurance cheaper than Medicare. Also, I have already reached my out of pocket spend maximum for this year due to some surgeries. Therefore, I get free health for the remainder of the year. My initial enrollment period for Medicare ends in October (last month of 7 month enrollment window). If I enroll for Medicare in October my understanding is that my Medicare plan will start in January, as there will be a 2 month delay in start of plan if enroll in 7th month of enrollment window. The question is, "will I be eligible for the subsidy for my Marketplace plan for the entire year of 2021?". Called Healthcare.gov and they did not give me a good answer. It boils down to this. Do I receive the subsidy until I actually start using Medicare in January 2022, or do I lose the subsidy starting in July since I am "eligible" for Medicare in July, although I did not sign up for Medicare or use it? Any thoughts? is there anything else that I am missing? I appreciate your insight. Thanks.
curmudgeon
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by curmudgeon »

I don't have any answers for you, but I'm following along since this is a situation we will likely face in a couple of years.
mhalley
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by mhalley »

I think the subsidy ends once you start medicare, not when you turn 65. I don’t think your Medicare would start in Jan, but in oct,
If you enroll in Medicare during the three months following the month you turn 65, your effective date for Part B will be delayed and can be up to the sixth month after the month you turn 65 (this assumes that you’re eligible for premium-free Part A based on your work history or your spouse’s work history). And the termination date for premium subsidies in these scenarios is based on when (and whether) you complete the enrollment process: Based on the CMS guidance and the retroactive government coverage rule in IRS Publication 974, you should expect your premium subsidy to continue through the month that you enroll, but that it will not be available starting the following month. You’ll have a gap between the end of your premium subsidy and the start of your Part B coverage, as explained in the example about “Paul” in the CMS guidance.
https://www.medicareresources.org/medic ... -medicare/
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JoeRetire
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by JoeRetire »

jaytrain52 wrote: Wed May 12, 2021 3:04 pmThe question is, "will I be eligible for the subsidy for my Marketplace plan for the entire year of 2021?".
Exchange subsidies end with Medicare eligibility.
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Flobes
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by Flobes »

JoeRetire wrote: Wed May 12, 2021 3:27 pm
jaytrain52 wrote: Wed May 12, 2021 3:04 pmThe question is, "will I be eligible for the subsidy for my Marketplace plan for the entire year of 2021?".
Exchange subsidies end with Medicare eligibility.
+1 This was my experience. Subsidies end in the month you turn 65, regardless of whether or not you actually start Medicare. Yes, my Medicare coverage was more expensive than my ACA coverage.
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RickBoglehead
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by RickBoglehead »

JoeRetire wrote: Wed May 12, 2021 3:27 pm
jaytrain52 wrote: Wed May 12, 2021 3:04 pmThe question is, "will I be eligible for the subsidy for my Marketplace plan for the entire year of 2021?".
Exchange subsidies end with Medicare eligibility.
Glad to hear that. That's the way it should work.
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cyclist
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by cyclist »

Interesting. I'm a July baby too and my ACA coverage is also cheaper (after subsidies) than Medicare.

I have been planning to apply this October for Medicare coverage effective Jan 1. As I read https://www.medicareresources.org/medic ... -medicare/ it looks like my subsidy would continue through the end of October if I applied in October.

DW is younger and will continue on ACA. The after-subsidy cost for her solo ACA coverage will be about the same as ours has been together once I'm on Medicare.

The catch, it seems, is that we'd receive about $1600 less in subsidies for November and December than I'd been expecting. My cost for Medicare for August through December would appear to be less than that, so maybe I need to think about applying in July after all.

Thanks for raising this!

Cyclist
barryfaetheus
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by barryfaetheus »

RickBoglehead wrote: Wed May 12, 2021 4:37 pm
JoeRetire wrote: Wed May 12, 2021 3:27 pm
jaytrain52 wrote: Wed May 12, 2021 3:04 pmThe question is, "will I be eligible for the subsidy for my Marketplace plan for the entire year of 2021?".
Exchange subsidies end with Medicare eligibility.
Glad to hear that. That's the way it should work.
Actually, there is an exception for those who are ineligible to receive Medicare part A premium-free...e.g. those with insufficient US work history. They can still continue to receive ACA subsidies.
calwatch
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Re: Transitioning from Obamacare (marketplace) to Medicare

Post by calwatch »

I think this is a good presentation from an official government web site about the different scenarios involved in transitioning, which should be helpful: https://marketplace.cms.gov/technical-a ... tplace.pdf

Look at the case of "Sally". She turns 65 in June but her subsidy ends October 1, the first day of the month that her initial enrollment period ends.

Also see Publication 974: https://www.irs.gov/publications/p974

If you can be covered under a government-sponsored program, you must complete the requirements necessary to receive benefits (for example, submitting an application or providing required information) by the last day of the third full calendar month following the event that establishes eligibility (for example, becoming eligible for Medicare when you turn 65). If you do not complete the necessary requirements in this time, you will lose the PTC for your coverage in a qualified health plan beginning with the first day of the fourth calendar month following the event that makes you eligible for the government coverage.

Example 1. Ellen was enrolled in a qualified health plan with APTC. She turned 65 on June 3 and became eligible for Medicare. Ellen must apply to Medicare to receive benefits. She applied to Medicare in September and was eligible to receive Medicare benefits beginning on December 1. Ellen completed the requirements necessary to receive Medicare benefits by September 30 (the last day of the third full calendar month after the event that established her eligibility, turning 65). She was eligible for Medicare coverage on December 1, the first day of the first full month that she could receive benefits. Thus, Ellen can get the PTC for her coverage in the qualified health plan for January through November. Beginning in December, Ellen cannot get the PTC for her coverage in the qualified health plan because she is eligible for Medicare.

Example 2. The facts are the same as in Example 1 , except that Ellen did not apply for the Medicare coverage by September 30. Ellen is considered eligible for government-sponsored coverage beginning on October 1. She can get the PTC for her coverage for January through September. She cannot get the PTC for her coverage in a qualified health plan as of October 1, the first day of the fourth month after she turned 65.


So it is not exactly the same month as you turn 65, but the last day of the third full calendar month after turning 65. Thus in your case cyclist, since you were born in July, you would follow Example 1 and apply for Medicare by the end of October. Either you get Medicare in November, and your subsidies end, or you keep your subsidies until Medicare approves you.
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