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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.

Elderly US Citizens Returning to US?

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Question: My parents are US citizens, but they have lived in Europe for the past ten years. My mom is 63 and my dad is 76. They want to move back to California. Their combined income is roughly $40,000. Will they be able to sign up for private plans and use the Covered California subsidy, and get plans thru that. Or will they HAVE to use Medicare because of their age? They want to get the BEST platinum-level plan possible, and I am willing to help them financially. Will the Medicare best plan be comparable to the private level platinum best plan? I am concerned and want to know what their options will be, and what the BEST coverage will be through Medicare.

Answer: The ACA mandates that individuals age 65 and older to enroll in Medicare. If your father does not have fully insured status (40 credits) he will pay a premium of up to $426 in 2014. He may also have to pay a premium penalty for not registering at age 65 (not sure if there is an exemption for being out of the country). In your father’s case original Medicare coverage with a Plan F Supplement (an additional $200/mo) would be even better than Platinum private coverage (100% coverage with unlimited network). Your mother (age 63) is eligible for a premium tax credit of about $330/mo. Which she can apply to the purchase of a Platinum Plan through the exchange, leaving her a net premium of approximately $500 per month. The total monthly cost to accomplish what you outlined above is approximately $1,200 per month (assuming no Medicare premium penalty).

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A Medicare Advantage plan with a $0 monthly premium might represent an even better alternative for Dad.

But I don’t believe Dad would be eligible for a new exemption from Medicare penalties unless he previously applied for and was approved for it continuously after leaving the US ten years ago.

If Dad is subject to the Medicare A & B premium surcharges due to failure to enroll, a privately purchased health plan might be far less costly, given the fact that the premium for persons age 65+ does not change with age — it cannot be more than 3 times the cost of the same plan for a 21-year-old.

At age 76, assuming the 10% premium penalty on Part A for twice the number of years as he has not had Part A (22 years, or to age 98), and the cumulative 10% lifetime premium penalty for each 12 months he has not had Part B, in 2014 he would be facing a monthly cost of up to $468.60 for Part A and $220.29 for Part B — a total of up to $688.89 per month. Then add the cost of a Part D prescription drug plan with a 1% cumulative penalty for each MONTH he has not had a drug plan since January 1, 2006 (at least +96%) — that could cost up to an additional $200 or more per month, so that can run the cost up to close to $900 per month, or more.

Medicare Advantage + Prescription Drug (MAPD) plans with $0 premiums, however, must also charge the Part D premium penalty surcharge.

Knowing all this, they might just want to stay in Europe.

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