This is the third article in a series to address various scenarios as more people who have a Covered California plan become eligible for Medicare. The previous two articles provided information for people who are entitled to premium-free Medicare Part A. This third article focuses on people who are not entitled to Medicare Part A without a premium thus must pay a premium if they want Part A (see textbox “Who Pays the Part A Premium?”).
Not yet enrolled in Medicare
If you have a Covered California plan, but are not entitled to premium-free Medicare Part A, you may choose to stay with the Covered California plan instead of enrolling in Medicare. If you qualify for financial help with your Covered California plan, you may continue receiving financial help so long as you do not enroll in Medicare Part A. Please see textbox “Medicare or Covered California?” to help you decide whether to enroll in Medicare or stay with your Covered California plan.
Enrolled in Medicare
Some people who are already enrolled in Medicare, and paying the Part A premium, ask if they can get a Covered California plan instead. The answer is yes. They may disenroll from Medicare and buy a Covered California plan (unlike people who are entitled to premium-free Part A, who may not disenroll from Medicare without having to drop their retirement or disability benefits and pay back any retirement or disability benefits they have received.) Before you disenroll from Medicare, because you don’t want to pay the Part A premium, and buy a Covered California plan, see textbox “Medicare or Covered California?”
Enrolled in Medicare Part B only
Some people enroll in Medicare Part B only; they do not have Part A because they cannot afford the Part A premium. However, Medicare Part B alone is not considered minimum essential coverage (MEC). In other words, a person who has Part B only would have to pay a penalty required by the individual mandate, which is part of the Affordable Care Act or health care reform, commonly called Obamacare. The individual mandate requires people to have a health plan that meets minimum essential coverage, such as qualified health plans from Covered California, Medicare Part A, Medi-Cal and TriCare. Thus to avoid the penalty, the person with Part B only may enroll in Part A or buy a Covered California plan.
If an individual cannot afford the Part A premium, s/he probably would not be able to afford the premium of a Covered California plan unless s/he qualifies for financial help. If s/he qualifies for financial help and buys a Covered California plan, s/he would probably disenroll from Part B. By disenrolling from Part B, the individual no longer has to pay the Part B premium, since a Covered California plan covers similar services covered by Part B. Note, however, that if s/he re-enrolls in Part B later, s/he would be subject to the late enrollment penalty as discussed in the sidebar. To avoid the late enrollment penalty, some people may keep Part B and pay the premium as well as the premium for the Covered California plan. A couple of considerations if keeping Part B with a Covered California plan:
- Medicare Part B is the primary payer, and Medicare does not provide coordination of benefits. For example, Medicare Part B would pay first for a doctor’s visit that is medically necessary and reasonable, assuming you have met your Part B annual deductible. Medicare would not forward the remainder of the bill to the Covered California plan. The Covered California plan is not supplemental coverage: it would not pay your Part B annual deductible or the remainder of the bill after Medicare has paid.
- If you are enrolled in Part B, you would need to keep your Medicare Part D plan, or enroll in one, unless the Covered California plan has creditable prescription drug coverage. Prescription drug benefits in Covered California plans are not required to be creditable. Like Parts A and B, Part D also has a late enrollment penalty which applies if you are eligible for Medicare Part D, don’t have creditable prescription drug coverage, and enroll in a Part D plan later.
This article is part of an educational series sponsored by SCAN Health Plan.