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transition from obamacare to medicare
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Transition from Obamacare to Medicare

Most seniors age 65 and over will be required to transition their health insurance from Obamacare to Medicare. How will the transition affect the insurance coverage, the premium, and the financial help (subsidy) from the marketplace, for eligible individuals?

 Select here for help with the transition from Obamacare to Medicare

Obamacare is a health insurance for families or an employee group health insurance. Those under the individual/family Obamacare insurance will be required to transition to Medicare when they turn 65. Once transitioned, Medicare includes Part A (hospital insurance) and Part B (doctors and outpatient insurance). It does not include prescription drug coverage.

When should eligible individuals transition from Obamacare to Medicare?

The eligibility for Medicare will be determined by the Social Security Administration. In most cases Medicare will start on the 1st day of the month in which the member turns 65. The member must contact the social security administration to get his/her Medicare card. The effective dates of Medicare Part A (hospital insurance) and Medicare Part B (doctor and outpatient insurance) will be printed on the Medicare card.  Some members will be enrolled automatically in Medicare part A by the Social Security Administration, once they are eligible for coverage

Can I have both Obamacare and Medicare coverage at the same time?

The general rule is that once a member is covered by Medicare he/she can’t be covered by Obamacare, but there are some exceptions. No Obamacare's financial help (subsidies) are allowed once a member is eligible for Medicare.

What if I do not transition from Obamacare to Medicare once I’m eligible?

Except for certain situations, there is a lifetime Medicare insurance premium penalty. The penalty depends on the time passed since the member was initially eligible for Medicare insurance and the actual effective coverage date.

Will I have the same medical and prescription drug coverage under Medicare as I have under Obamacare?

The short answer is No. Medicare is built up of many parts. The basic coverage Original Medicare includes part A (hospital insurance) and part B (doctors and outpatient insurance), it does not include prescription drug insurance.

How can I add prescription drug coverage under Medicare?

There are various options to purchase prescription drug plans, all offered by private insurance companies. One option is to add a stand-alone prescription drug plan. The other common option is to purchase the Medicare Advantage plan which includes prescription drug coverage.

Is there a change in my out-of-pocket expenses when I transition from Obamacare to Medicare?

Yes, there is. Unlike Obamacare, Original Medicare does not have out of pocket maximum on your payments for medical and prescription drug services. This is a very significant difference.

For example, a member was admitted to a hospital for 2 weeks.  Under Obamacare the member would only have to pay up to the out-of-pocket-limit of his/her plan. The insurance company would pick up the difference in cost.

Under Original Medicare, there is limit on how much the insurance will pay for the service, and no limit on the cost to the member.

Can I add additional Medicare coverage on top the Original Medicare, which will limit my medical and prescription drug cost?

Yes, there are 2 major plans on the market, the Medicare Advantage and the Medicare Supplement insurance.

Medicare Advantage may include prescription drug coverage. The main advantages: it limits the out-of-pocket expense for medical services, the premium is relatively low, and it can be replaced each year. The main disadvantage: most of the plans are HMO with limited number of medical providers. The member pays deductible and co-pays for the provided services, same as under Obamacare insurance.

Medicare Supplement plans do not include prescription drug coverage. They are PPO plans and accepted by any Medicare provider in the USA. The premiums are more expensive, the members pay lower or no co-pays when receiving medical services. The guarantied acceptance period to Medicare supplement plans is limited to 6 months from the effective date of part B, with some exceptions.

Will all my covered medications while under the Obamacare insurance be covered under Medicare?  Will it cost the same?

Each prescription drug plan has a formulary, which lists the covered medications and their cost. Some medications under Obamacare are not covered under Medicare.  The cost of medication under Obamacare insurance is based on tiers (generic, brand or other), where the price remains the same throughout the year.  Under Medicare, the price of a medication is based on a formula and may be different throughout the year. A major difference between Obamacare and Medicare is that under Medicare there is no out-of-pocket limit on your cost of medications.

If I'm eligible for Obamacare's subsidy from my state's health insurance marketplace or healthcare.gov, can I keep it?

The financial help (subsidy) has been calculated based on household income, age, number of people in your household and your residence zip code. In most cases when one family member transitions to Medicare, the remaining family members lose some or all the subsidy. The household income remains the same, but there are less people covered by Obamacare.

Once I transition to Medicare, can my family members keep their Obamacare coverage?

If the primary insured person is the one transitioning from Obamacare to Medicare, the rest of the family members will have to re-enroll on a new plan. If the person who will be transitioning to Medicare is not the primary applicant, only his/her Obamacare coverage will be terminated. In both cases, the premium and the subsidies for the remaining family members under Obamacare will be re-calculated. They will gain or lose eligibility for certain benefits and financial help.

My spouse and I have Medicaid under Obamacare. Can we both keep it after the transition to Medicare?

It is a case by case situation and depends on the household income, state of residency and other factors. Due to the transition to Medicare, each member’s eligibility for Medicaid will be re-evaluated.

Are there situations where the transition to Medicare decreases the family’s cost of insurance?

Yes, it is a common situation.  For example: a couple who paid Obamacare insurance without any financial help, may get a significant break when a family member transitions to Medicare. Some Medicare plans are relatively inexpensive.

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