Marketplace or Medicare: Should You Go or Should You Stay?

Welcome to the season.

Yes I'm talking about open enrollment, but also the season where your Marketplace clients — or Affordable Care Act public exchange plan clients — are asking questions.

If you have a male turning 65, more often than not, his wife is going to be, what, maybe 63, 62.

We know he's going to reposition his health care funds from the stand-alone health plan.

He and his wife have to pay for some kind of supplemental coverage — Medicare supplement or Medicare Advantage — for him, because he'll be enrolling into Medicare.

And when he does that, his wife will now need her own stand-alone health plan, so your "season" as an agent or advisor is to answer the questions that are top of mind for your clients and prospects during the buying season.

We know this season, for ACA coverage, Medicare plans and Medicare Part D prescription drug plans, can be confusing for them and maybe, sometimes, even for you.

There are so many parts of each of these it would take a short novel to unpack the myths and truths of each.

In this article we'll just tackle some of the basics, so, if you are asked any of these questions, you'll have the answer.

Questions and Answers

Question: What if your client has a Marketplace health plan and is coming up to age 65?

Should the client enroll in Medicare or keep the Marketplace plan?

Or, can the client do both?

Answer: If the client's turning 65, the client should sign up for Medicare. If the client has worked 40 quarters or more, there is no cost to the client for having Medicare Part A inpatient hospitalization coverage.

There is a premium for Medicare Part B physician and outpatient services coverage, and each has a deductible. Part B coverage has co-pays.

However, these cost are usually much lower than an ordinary major medical insurance premium.

Part A and Part B pay only 80% of the patient's costs. The patient faces a 20% coinsurance payment requirement. Many people get extra coverage to pay the 20% of the bill that Medicare Part A and Medicare Part B don't cover. Some clients will get Medicare supplement insurance. Others will get a Medicare Advantage plan.

One thing to keep in mind is that once your client's Medicare Part A coverage starts, the client will no longer be eligible for any premium tax credits or other cost savings the client may have been getting for the Marketplace plan.

Question: When does the client enroll in Medicare, and when does the client either keep or cancel the Marketplace plan?

Answer: Let's say the client is turning 65 in Dec 2022. The client will be in the initial enrollment period for signing up for Medicare.

The initial enrollment period is the period of time your client can get Medicare without regard (in most cases) to your client's health condition. That period starts three months before your client's 65th birthday and ends three months after your client's 65th birthday.

The reason your clients should consider enrolling in Medicare when they are eligible is:

1. Once their Medicare Part A coverage starts, they are no longer eligible for a premium tax credit or other savings for a Marketplace plan. To keep their Marketplace plan, they'd have to pay full price.

2. Should they enroll in Medicare after their initial enrollment period ends, they may have to pay a Part B late-enrollment penalty for as long as they have Medicare.

3. If they miss the original initial enrollment period window, they can enroll in Medicare Part B (and Part A if they have to pay a premium for it) only during the Medicare general enrollment period, which lasts from Jan. 1 to March 31 each year. Your client's coverage won't start until July of that year. This may create a gap in their coverage.

Maybe your clients see Medicare as a better deal, so they want to cancel their Marketplace coverage. How do they do this, and is there any penalty for doing so? Do they have to do it a certain way?

Clients shouldn't end their Marketplace coverage until they know for sure when their new coverage starts.

Why?

Because, once they end their Marketplace coverage, they can't re-enroll until the next annual open enrollment period, unless they qualify for an Affordable Care Act special enrollment period.

Question: What is an ACA special enrollment period?

Answer: This is a time outside the yearly open enrollment period when your clients can sign up for health insurance.

Your clients will qualify for special enrollment periods if they've had life events such as: losing health coverage, moving, getting married, having a baby, or adopting a child, or if their household income falls below a certain amount.

Depending on the special enrollment period type, the client may have 60 days before or 60 days following the event to enroll in a plan.

A client who becomes eligible for Medicaid or the Children's Health Insurance Program (CHIP) can enroll in those at any time.

Job-based plans must provide a special enrollment period of at least 30 days.

Question: Can your client get help with paying for Medicare?

Answer: If your client needs help with the Part A and B costs, the client can apply for a Medicare Savings Program.

Your client may also qualify for Extra Help with paying for Medicare prescription drug coverage if the client meets certain income and resource requirements.

Question: What if a client is eligible for Medicare, but the client's spouse isn't and wants to stay covered under the couple's current Marketplace plan?

Answer: If someone gets Medicare but the rest of the people on the Marketplace application want to keep their Marketplace coverage, the client can end coverage for just some people on the Marketplace plan.

Question: Once a client enrolls in Medicare, can the client get a stand-alone dental plan through the Marketplace?

Answer: Generally, the client won't be able to buy a stand-alone dental plan unless the client is buying a health plan at the same time.

But if a client's state has its own Marketplace, the client may be able to buy a stand-alone dental plan, if one is available.

Canceling a Marketplace Plan

If your client needs to end Marketplace plan coverage because the client got other health coverage, or for another reason, here's how the client should do that.

If the client is ending coverage for everyone on the application, the termination can take effect as soon as the day the client cancels the coverage, or the client can set the Marketplace coverage end date to a day in the future. If the client knows new coverage will start on the first day of the following month, the Marketplace coverage could end then.

If the client is ending coverage for just some people on the application, in most cases their coverage will end immediately.

In some cases, coverage will not end immediately, including when the household members who remain enrolled in coverage qualify for a special enrollment period.

The best way to make sure coverage ends on the right date is to contact the Marketplace call center and request the change.

Final Thoughts

Now you're equipped to answer the basic questions during the season, but don't stop there.

Learning about Medicare helps you to do three things to improve your practice:

Discover any gaps your clients might have in their financial protection.
Fill those gaps with coverage that needs to be reviewed each year, keeping you top of mind when the clients are looking for solutions.
Keep other agents out of your client's house.

That can prevent the loss of business and ensure that you get wallet share in each home, which builds a permanent stream of renewals

Lynn Lewis is the founder of InvoBH Agency and the professional development chair at the St. Louis Association of Health Underwriters. Lloyd Lofton is the founder of Power Behind the Sales and the author of "The Saleshero's Guide To Handling Objections."