Transition From Obamacare to Medicare (HSA, plan, supplement, coverage)
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I submitted the following question to the ObamacareFacts forum. I'm curious if anyone else has done this.
I have had an ACA plan with a premium tax credit for 2020 and will enroll again in 2021. My 65th birthday is September 23, 2021. If I wait until the final month of my Medicare initial enrollment period, December 2021, to enroll in Medicare Parts A and B, Medicare coverage would begin March 1, 2022. IRS Pub 974, Page 9 specifies that I would be able to keep my ACA plan with a premium tax credit while waiting for Medicare coverage to begin. ( https://www.irs.gov/pub/irs-pdf/p974.pdf )
To have continuous coverage until March 1, 2022, I would need to purchase a new ACA plan for 2022, and cancel it by March 1. The law states I cannot purchase a new ACA plan if I'm "eligible" for Medicare. I'm confused by the term "eligible."
Assuming I meet ACA income requirements, would I be able to purchase a new ACA plan to cover the first two months of 2022 and would I be able to get a premium tax credit for those two months?
I have had an ACA plan with a premium tax credit for 2020 and will enroll again in 2021.
My 65th birthday is September 23, 2021.
If I wait until the final month of my Medicare initial enrollment period, December 2021, to enroll in Medicare Parts A and B, Medicare coverage would begin March 1, 2022. IRS Pub 974, Page 9 specifies that I would be able to keep my ACA plan with a premium tax credit while waiting for Medicare coverage to begin. ( https://www.irs.gov/pub/irs-pdf/p974.pdf )
To have continuous coverage until March 1, 2022, I would need to purchase a new ACA plan for 2022, and cancel it by March 1. The law states I cannot purchase a new ACA plan if I'm "eligible" for Medicare. I'm confused by the term "eligible."
Assuming I meet ACA income requirements, would I be able to purchase a new ACA plan to cover the first two months of 2022 and would I be able to get a premium tax credit for those two months?
"Eligible" means when you turn 65. Which means you cannot re-enroll in the ACA plan at EOY 2021.
Once you are eligible for Medicare, you are no longer eligible for premium tax credit. Premium tax credits would end September 30, 2021.
Quote:
To receive the credits, individuals must be U. S. citizens or lawfully present in the United States.
They can’t receive premium tax credits if they are eligible for other “minimum essential coverage,” which includes most other types of health insurance such as Medicare or Medicaid,
"Eligible" means when you turn 65. Which means you cannot re-enroll in the ACA plan at EOY 2021.
Once you are eligible for Medicare, you are no longer eligible for premium tax credit. Premium tax credits would end September 30, 2021. Why do you want to remain on your ACA plan?
It would save me a lot of $$$ by keeping my ACA plan as long as possible.
What you stated about the tax credit is not correct, at least based on the example in IRS pub 974. The document apparently defines "eligible" as the coverage date so long as you enroll during your initial enrollment period. Here is the text of that example.
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.
Although the IRS document is the authoritative source, here's a document that confirms that as well:
... If you do complete the enrollment process by the end of your enrollment window, your premium subsidy will continue until the end of the month prior to the start of your Medicare coverage.
Last edited by mitchmiller9; 09-06-2020 at 04:34 AM..
Iwork for the NY Exchange, and I've had people call at the 11th hour to cancel out of their APTC plan because their Medicare is about to go into effect, even though their plan handbook advises them that you have to give the plan 14 days notice when you are doing a disenrollment. When I do a disenrollment request I have to notate that the consumer needs to be disenrolled by the 31st of X month due to their Medicare coverage starting on the 1st day of Y Month.
Yes, you can get an APTC eligibility, even though you are only staying in the coverage for part of the year, until the Medicare goes into effect. My state goes by the "15th of the month" rule, so if you were in NY you would let the Marketplace know by February 15 that you are cancelling.
What you stated about the tax credit is not correct, at least based on the example in IRS pub 974. The document apparently defines "eligible" as the coverage date so long as you enroll during your initial enrollment period.
Thanks for that correction and apologies I didn't delve further before replying. At 3 a.m. I got lazy. No excuses. Medicare is very nuanced and yours is another good example. It appears you've found your answer. Interesting that ACA is less expensive than Medicare - especially with the deductibles attached to most ACA plans.
Thanks for the answer. I thought that I should be able to buy a new policy in 2022 under the described circumstances, but I've learned laws are not always consistent (think ACA deductible limit and HSA deductible limit). If I can stay on my ACA plan until March 1, 2022, it will save me about $1800 in Medicare and Medigap premiums, since my PTC covers 100% of my ACA premium (versus signing up for Medicare so it begins Sept 1, 2021, the month I turn 65).
There's another point of uncertainty involved in pulling this off. I need to enroll in Part D. Part D's open enrollment is the same as standard Medicare's. HOWEVER, you MUST have a Medicare number to enroll in a Part D plan. I looked at an online enrollment form for Part D and it stated "if you haven't received your Medicare card yet, you can check your online SS account to get your Medicare number." I've read that Medicare cards are typically sent out 3 weeks after enrollment (regardless when your coverage begins). Note, I won't be applying for SS until age 70, but I can create an online SS account now so long as I remove the Equifax freeze on my credit when I create the account (then freeze it again).
With that in mind, I must enroll in standard Medicare very early in December so I have time to get a Medicare card so I can enroll in Part D before my open enrollment expires. I'm concerned that the process of getting a Medicare number assigned may involve human intervention. Given most people take vacation during December, I'm thinking my Medicare enrollment may not be processed in time for me to have a Medicare number available to enroll in Part D by the end of the month.
My question is: Does anyone know if a Medicare number is assigned automatically, by computer, when I enroll in Medicare... or does it require a human to process the application, then assign the number?
Alternatively, has anyone ever checked their online SS account after enrolling in Medicare to see how quickly they are assigned a Medicare number?
Last edited by mitchmiller9; 09-07-2020 at 02:05 AM..
After some additional research, I've found that CMS electronic enrollment processing times are guaranteed only to be within 120 days, since an application could require additional information.
( https://www.novitas-solutions.com/we...entId=00131972 )
However at least ten websites I've visited state that Medicare cards are sent out after 3 weeks or Medicare cards are received in 30 days.
I've also found that if I cannot enroll in Part D by the end of my IEP, I might qualify for a SEP because I would lose my drug coverage when my ACA policy is canceled (Mar 1). Drug coverage under a Bronze plan is considered to be "credible." However, I'm not sure the cancelation would be considered involuntary.
Interesting that ACA is less expensive than Medicare - especially with the deductibles attached to most ACA plans.
I believe that has to do with the tax payers picking up his ACA premiums due to his income.
Even so, to me, if Obamacare was free, I would rather have Original Medicare with a supplement to erase the "Being out of network" and the overall hassle of dealing with an insurance company.
From my previous post, I realized my link to CMS Form 855 is for a Medicare PROVIDER, not a patient. So I'm still not sure if there is a CMS guaranteed timeline for processing an initial Medicare Part A & B enrollment
So I'd still like to hear from people that applied for standard Medicare Parts A & B, then Part D, to understand how long you had to wait to apply for Part D.. and if you were required to have a Medicare number to apply for Part D, as I currently understand the process.
I wanted to circle back on this one after getting clarification. This applies to only those people that need to sign up for Medicare Part A: either you have to pay for it, or you are not drawing SS, (some other cases as well).
First of all, all that matters in regards to your PTC is Medicare Part A. There are different rules that apply to premium-free vs premium-pay Part A. For premium-pay, you would follow the example (example 1) in IRS Pub 974, where your Part A and Part B start at the same time and you can keep your PTC until that time.
However, for premium-free Part A, the rules are different. Premium-free Part A is effective retroactive to the first day of your birth month when you sign up. One would think that the PTC would therefore end on the first day of your birth month. However, there is a special case for government plans that are retroactive upon enrollment. Premium-free Part A is one of them. You can keep your PTC until the first day of the following month after you sign up for Part A, being sure to sign up WITHIN your Medicare initial enrollment period.
Assuming I can do this, I'll probably sign up for Part B in November and Part A and D in December, leaving me without the PTC for only Jan, with full Medicare coverage starting Feb 1, 2022. The savings I accrue is about $1000.
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