What to Do If You Have a Covered California Plan & Become Eligible for Medicare? (Part 2)

What to Do If You Have a Covered California Plan & Become Eligible for Medicare? (Part 2)

This is the second article in a series to address various scenarios as more people who have a Covered California plan become eligible for Medicare. The previous article provided information for people who have a Covered California plan and are entitled to premium-free Medicare Part A. This second article continues the discussion about costs in the transition: Will your costs increase or decrease when you transition from a Covered California plan to Medicare?

Financial help: Premium assistance and cost-sharing reductions
Although 90% of people with a Covered California plan qualify for financial help, some do not. Financial help consists of premium assistance and cost-sharing reductions. Premium assistance, formally called Advanced Premium Tax Credit (APTC), is available for people with income up to 400% FPL ($47,520 in 2016). For those who qualify, premium assistance helps pay the monthly premium for the plan through Covered California. Cost-sharing reductions is available for people with income up to 250% FPL ($29,700 in 2016). For those who qualify, cost-sharing reductions decrease their deductible, copayment, coinsurance and out-of-pocket maximum.

Individuals without financial help
If you did not qualify for financial help, you may find a decrease in premium cost when you transition to Medicare. How much of a decrease depends on what options you choose when you enroll in Medicare: Medigap or Medicare Advantage; which Medigap or Medicare Advantage plan; and which Medicare Part D prescription drug plan. You may contact your local Health Insurance Counseling and Advocacy Program (HICAP) for counseling about the different options.

Example 1: An individual with annual income of $59,400 (500% FPL in 2016) in Alameda County transitions from Covered CA to Medicare (premium-free Part A). At an income of 500% FPL, the individual does not qualify for financial help.

  Silver 70 plan (Covered CA) Medicare Advantage prescription drug plan (MA-PD) Original Medicare + Medigap Plan F + Medicare Part D
Monthly premium $8161 $284.80
Part B premium2 = $121.80 + MA-PD premium = $1633
$345.80
Part B premium = $121.80 + Medigap premium = $1644 +
Part D premium = $605

Footnotes:

  1. The lowest premium for a Silver 70 plan.
  2. Medicare Advantage enrollees continue to pay the Part B premium in addition to the Medicare Advantage plan premium.
  3. The highest Medicare Advantage plan premium in Alameda County was used to show that even with the highest premium, the total premium is much less than the lowest premium for a Silver 70 plan.
  4. Estimated median of Medigap Plan F premiums in Alameda County.
  5. Estimated median of premiums for stand-alone Part D plans.

Individuals with financial help
If you qualify for financial help, you may find an increase or decrease in premiums depending on how much financial help you receive (compare Examples 2 and 3) and what options you choose when you enroll in Medicare: Medigap or Medicare Advantage; which Medigap or Medicare Advantage plan; and which Medicare Part D prescription drug plan. You may contact your local HICAP for counseling about the different options.

Example 2: An individual with an annual income of $35,640 (300% FPL in 2016) in Alameda County transitions from Covered CA to Medicare (premium-free Part A). At an income of 300% FPL, the individual qualifies for financial help.

  Silver 70 plan (Covered CA) Medicare Advantage prescription drug plan (MA-PD) Original Medicare + Medigap Plan F + Medicare Part D
Monthly premium $2021 $121.80
Part B premium2 = $121.80 +
MA-PD premium = $03
$345.80
Part B premium = $121.80 + Medigap premium = $1644 + Part D premium = $605

Footnotes:

  1. The lowest premium for a Silver 70 plan.
  2. Medicare Advantage enrollees continue to pay the Part B premium in addition to the Medicare Advantage plan premium.
  3. A plan with $0 premium is used to show that an individual in this situation has an option to lower premium cost when s/he transitions to Medicare. There are two Medicare Advantage plans with no premium in Alameda County.
  4. Estimated median of Medigap Plan F premiums in Alameda County.
  5. Estimated median of premiums for stand-alone Part D plans. Individual may choose a Part D plan with a lower premium to reduce his cost.

Example 3: An individual with an annual income of $16,632 (140% FPL in 2016) in Alameda County transitions from Covered CA to Medicare (premium-free Part A). At an income of 140% FPL, the individual qualifies for financial help, as well as Extra Help that reduces Part D plan costs.

  Enhanced Silver 94 plan (Covered CA) Medicare Advantage prescription drug plan (MA-PD) Medicare + Medigap Plan F + Medicare Part D
Monthly premium $11 $121.80
Part B premium2 = $121.80 +
MA-PD premium = $03
$337.80
Part B premium = $121.80 + Medigap premium = $1644+ Part D premium = $525

Footnotes:

  1. The lowest premium for an Enhanced Silver 94 plan.
  2. Medicare Advantage enrollees continue to pay the Part B premium in addition to the Medicare Advantage plan premium.
  3. A plan with $0 premium is used to show that even with a $0 premium plan, an individual in this situation faces an increase in premium cost when s/he transitions to Medicare.
  4. Estimated median of Medigap Plan F premiums in Alameda County.
  5. With income at 140% FPL, this individual may qualify for partial Extra Help if his assets are below $13,640 (single). If he qualifies, his Part D premium responsibility is estimated at $52, based on an estimated median of premiums for stand-alone Part D plans. Individual may choose a Part D plan with a lower premium to reduce his cost.

People who receive substantial financial help face a significant increase in premium when they transition to Medicare (see Example 3), regardless of whether they enroll in a Medicare Advantage plan or buy a Medigap policy. Even with a $0 premium Medicare Advantage plan, their premium cost will increase because of the Part B premium. Many of them ask if they can continue with financial help in their Covered California plan instead of enrolling in Medicare. The answer is no, not if you are entitled to premium-free Medicare Part A. When you become eligible for Medicare, even if you do not enroll, you are no longer eligible for financial help.

If eligible for Medicare, not eligible for financial help
If you do not enroll in Medicare, you will be considered eligible for Medicare starting the month following the end of your Initial Enrollment Period (also see Part 1 article). And if you are considered eligible for Medicare, then you are not eligible for financial help (see Example 4).

Example 4: Even if an individual does not enroll in Medicare, he is no longer eligible for financial help starting the month after his Initial Enrollment Period ends.

7-month Initial Enrollment Period (IEP)

Months following IEP

1st

2nd

3rd

4th

5th

6th

7th

No longer eligible for financial help.

If you enroll in Medicare, when you enroll determines when you are no longer eligible for financial help (compare Examples 5 and 6).

Example 5: If an individual enrolls in Medicare in the first three months of his Initial Enrollment Period, he is no longer eligible for financial help starting his month of eligibility.

7-month Initial Enrollment Period

1st

2nd

3rd

4th

5th

6th

7th

Enroll in Medicare

Medicare begins

     
 

No longer eligible for financial help

Example 6: If an individual enrolls in Medicare in the last month of her Initial Enrollment Period, she is no longer eligible for financial help starting the month Medicare becomes effective.

7-month Initial Enrollment Period

Months after IEP

1st

2nd

3rd

4th

5th

6th

7th

1st

2nd

3rd

Enroll in Medicare

Medicare begins

No longer eligible for financial help

In the next article, we will outline options for people who have to pay a premium for Medicare Part A. In the last article in the series, we will consider options for people who have MAGI Medi-Cal, aka expanded Medi-Cal, and become eligible for Medicare.

If you have questions about transitioning from Covered California to Medicare, please send them to info@cahealthadvocates.org.


This article is part of an educational series sponsored by SCAN Health Plan.

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Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.

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