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I purchased platinum-level family coverage on the healthcare exchanges this year. Shortly after the start of the year, my wife's disability application was approved (after ~2 years in progress) and she became eligible for Medicare as a result.

Most of the stuff I can find via Googling refers to 65+ retirees without employee/exchange healthcare, so we're a bit at a loss as to whether it makes sense to pay the premiums for Medicare Part B coverage or to forgo it entirely and use only the exchange plan.

Our exchange plan has a $4,000 family out-of-pocket maximum, which we reliably hit after a few months. How do the two insurances interact if we opt to carry both? Are we likely to see cost savings from doing so?

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First off, you should contact your health plan administrator as soon as possible. Different plans may interact differently with Medicare; any advice we could provide here would be tentative at best. Some of the issues you may face:

  • If you have two plans (Medicare and a private insurer), one should be Primary and one Secondary. That means that, say you have a doctor's visit that costs $100. The Primary Payer might pay 80%; so, $80. Then the Secondary payer potentially could cover the remaining $20, or you might be on the hook for part or all of that; it depends on the plan. Many private insurers are automatically secondary when you qualify for Medicare.
  • If it is automatically secondary, then you must enroll in Part B. The now-secondary plan won't pay that first $80 if it's truly secondary (and likely won't pay anything in many cases). Your plan documents may discuss this, or you may need to contact the plan to find out.
  • If this were an employer plan, this would be fairly straightforward - people have been doing this for years, and there is established federal law. From what I can find, with Exchange plans, there is not clear federal law on the subject. For example, California Health Advocates says:

A person with both Medicare and a QHP would potentially have primary coverage from 2 sources: Medicare and the QHP. No federal law addresses this situation. Under state insurance law an individual generally cannot collect full benefits from each of 2 policies that together pay more than an insured event costs. State law usually specifies how insurance companies will coordinate health benefits when a person has primary coverage from more than one source. In that situation, insurance companies determine which coverage is primary and which is secondary. It’s important to understand that a QHP is not structured to pay secondary benefits, nor are the premiums calculated or adjusted for secondary payment. In addition, a person with Medicare would no longer receive any premium assistance or subsidies under the federal law. While previous federal law makes it illegal for insurance companies to knowingly sell coverage that duplicates Medicare’s coverage when someone is entitled to or enrolled in Medicare Part A or Part B, there has been no guidance on the issue of someone who already has individual health insurance and then also enrolls in Medicare. We and other consumer organizations have asked state and federal officials for clarification on this complicated situation.

As such, it likely is up to the plan how they choose to pay - and I wouldn't expect them to pay much if they think they can avoid it. You may also want to talk to someone at your local Medicare branch office - they may know more about your state specifically; or someone in your state's department of health/human services, or whomever administers the Exchanges (if it's not federal) in your state.

Secondly, as far as enrolling for Part B, you should be aware that if she opts not to enroll in Part B at this time, if your wife later chooses to enroll before she turns 65 she will be required to pay a penalty of 10% per 12 month period she was not enrolled. This will revert to 0 when she turns 65 and is then eligible under normal rules, but it will apply every year until then. If she's enrolling during the normal General Enrollment period (Jan-March) then if she fails to enroll then she'll be required to pay that penalty if she later enrolls; if this is a Special Enrollment Period and extends beyond March, she may have the choice of enrolling next year without penalty.

  • One other note: One reason this isn't clear is that it is illegal for the health insurer to offer you a regular plan on the exchange if you have Medicare (since that would be selling you coverage you don't need and can't really make that much use of). As such, normally this wouldn't come up: she'd get Medicare and then be simply ineligible for the Exchange plan. But since you already got the Exchange plan, it's a bit more complicated. – Joe Jan 29 '15 at 15:09

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