Officials Alert Seniors They Could Wind Up With Too Much Insurance

Ever since the Affordable Care Act’s health insurance marketplaces opened for business in 2014, the Obama administration and California officials have worked hard to make sure Americans sign up.

Yet state officials now are telling some older people as they turn 65 that they should cancel their marketplace policies so they don’t end up with too much insurance.

California — which runs the largest state marketplace, with 1.4 million members — has been mailing letters to all marketplace customers who are 65 or will be by Dec. 1 to let them know about their eligibility for Medicare. They are also being told that once they become eligible for Medicare, they can’t qualify for federal subsidies to help pay the premium costs for marketplace plans.

The letters were sent to about 20,000 members of the state’s Covered California exchange, regardless of whether they are now receiving subsidies. And they include several sources of information if seniors have questions.

“We had received some feedback from our service centers and from stakeholders indicating that some consumers were unaware of the need to terminate their Covered California coverage once they enrolled in Medicare,” said Dana Howard, a spokesman for Covered California.

The agency did not single out beneficiaries receiving financial assistance because all beneficiaries can be affected if they don’t consider their Medicare options when turning 65, he said.

The 13 state-operated marketplaces must also find and notify people with overlapping coverage, although they are not required to contact beneficiaries nearing Medicare age. Besides California, only a small number of states, including Maryland and Massachusetts, are doing that.

Federal officials also are contacting some older marketplace customers. The Centers for Medicare & Medicaid Services is sending emails each month to about 15,000 people with subsidized marketplace coverage in the 38 states that use the federal marketplace. The messages arrive a few weeks before their 65th birthday.

“In most cases you won’t want to keep your Marketplace plan because once your Medicare coverage starts, you’ll no longer be eligible for any premium tax credits or other cost savings you may be getting for your Marketplace plan,” the notice says. “To avoid an unwanted overlap in Marketplace and Medicare coverage … tell us you want to end your Marketplace plan.”

Cropped shot of elderly couple holding hands while sitting together at home. Focus on hands.

And last month, CMS also began sending letters to people already covered by Medicare but also enrolled on the marketplace and getting financial assistance. The letters, required under the federal health law, say they can keep dual coverage — without subsidies — but urges them to discontinue their marketplace policy since in most cases it duplicates their Medicare benefits. If marketplace enrollees don’t respond, eventually officials can cancel the subsidies.

A Medicare official said the agency found a small number of consumers with overlapping coverage by comparing marketplace and Medicare enrollment data but declined to say how many. California will begin identifying any beneficiaries with overlapping coverage next year, Howard said.

Consumer advocates have praised CMS officials for the new efforts to help seniors avoid costly enrollment headaches. “People ages 55 to 64 are the largest segment of marketplace enrollees so we want CMS, as much as possible, to get in front of any problems that might result from mismanaged transitions,” said Stacy Sanders, federal policy director at the Medicare Rights Center.

Last December nearly four dozen health insurers, unions and consumer groups urged the government to provide information to all marketplace members approaching Medicare age.

Having a marketplace plan does not exempt a person from Medicare’s fines for signing up late for Part B coverage, which covers doctor visits and other outpatient services. Seniors who don’t enroll in Part B three months before or after their 65th birthday will be hit with that permanent penalty — 10 percent of the monthly premium for each 12-month period they were late. (People who continue to work past the age of 65 for firms with more than 20 employees can delay getting Part B until they leave their jobs. They then have an eight-month window for signing up.)

But that’s not all. By law, seniors who are late enrolling in Part B can sign up only during January through March for coverage that begins the following July. If they don’t get the timing just right, they could wait several months before it starts.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

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