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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


Can Over-65 Get PPO Off-Exchange?

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Question: Could German couple 79 & 77 making $75k get any subsidies with Blue Shield PPO? would a short term plan make any sense. They’re coming from $1800/mth Health Net 3000ded PPO.

Answer: Based on their income they are not eligible for subsidized coverage in Covered California. I suggest they shop for replacement coverage off-exchange. They can get better coverage with Blue Shield or any carrier including Health Net for less money.

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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”.

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