Question: Can a senior citizen who is paying for Part A of Medicare because he has not worked in the US cancel Medicare and sign up ACA to take advantage of qualified subsidy?
Answer: This question was answered earlier in the CAHBA Q&A Forum by Premier Agent Max Herr. He is Max’s unedited answer.
Courtesy of the PPACA, persons age 65 and older are now required to enroll in Medicare unless covered by another health plan (generally employer-sponsored). As a result, no one over age 64 is eligible for premium tax credits regardless of income.
The exception to the Medicare enrollment is based on residency. Legal immigrants over age 65 are eligible for enrollment in Medicare if they have been in the US at least 5 years. Prior to that, they must obtain “minimum essential coverage” in some other manner.
Persons over age 65 who do not have fully insured status (40 credits) pay a premium of up to $426 in 2014 (less than 30 credits, the premium is reduced for persons with 30-39 credits). Failure to enroll in Medicare Part A when first eligible (at age 65 for most, or when the five-year residency threshold is crossed if later) means a 10% premium penalty for twice the length of time a person was not enrolled in Part A.
The Part B premium penalty remains a lifetime penalty. The 1% per month premium penalty for Part D is also a lifetime assessment.
So the temporary solution for this German couple, if they have not been in the US for five years is to obtain any form of minimum essential coverage. Once eligible for Medicare Parts A and B, the monthly cost, even at the maximum of $426 for Part A + $104.90 for Part B, is likely to be a lot lower than a Gold plan for a 64-year-old (or older) person.
At $75,000 income, they are well below the joint MAGI threshold for a Part B premium “enhancement”.