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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.

Recently in Medicare Category

Spouse Turning 65?

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Question: My spouse and I are renewing our Covered California health plan for 2020, but she will be going on Medicare in March. When she cancels her Covered California plan, how will that affect my rate?

Answer: Your current rate is actually your individual rates combined. When your spouse goes on Medicare, you will pay only your individual rate which should be about half of your current rate.

Question: I turn 65 in March and I will be eligible for Medicare. I am currently on Covered California with a subsidy. Can I stay on Covered California instead pf Medicate?

Answer: When you become eligible for Medicare, you are no longer eligible for a Covered California health plan with premium assistance. For a 65 year-old without premium assistance, coverage through Covered California is much more expensive than Medicare.

Sign-up Deadline?

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Question: My wife read that the deadline was December 7th. I thought it was December 15th. Who’s right.

Answer: You’re right this time. December 15th is the deadline for individuals and families in the under-65 health insurance market. You must enroll or make changes to your plan by December 15th to affect coverage on January 1st whether you enroll through Covered California or directly with an insurance company. Open enrollment in California extends until January 31st for new enrollments or changes to existing plans with effective dates to February 1st 2020.

Your spouse is correct if she is on Medicare. The deadline for changes to 2018 Medicare coverage is December 7th.

Spouse Medicare Eligible?

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Question: My spouse turned 65 in September, can he stay on our current plan until December without incurring a penalty or losing our current subsidy?

Answer: No. Once he became Medicare eligible, he was no longer eligible for premium assistance under Covered California. He can be covered through Covered California without premium assistance but signing up for Medicare would be a much better deal.

Question: Is the open enrollment period the same for Covered California and Medicare?

Answer: No. They are not the same, although there is some overlap in the enrollment periods. The Medicare open enrollment period runs from October 15 through December 7 each year. For Covered California, the open enrollment period will run from November 1, 2016 through January 31, 2017. If you are covered by Medicare, and you are interested in reviewing and comparing your Medicare coverage options, make sure the plans you are considering during the open enrollment period are Medicare plans, not Covered California plans. Medicare plans are not sold through the Covered California websites.

Question: I will be 65 soon and and can go on Medicare. My income is $120k and I will be required to pay higher premiums for Medicare Part B and Part D. Can I sign up for health insurance from a Marketplace plan now instead of enrolling in Medicare when I turn 65?

Answer: If you are not yet enrolled in Medicare, you can buy health insurance coverage through Covered California before you turn 65. Once you have a Covered California plan, you can choose to renew it after you turn 65. But once you become entitled to Medicare coverage, you cannot buy a new Marketplace plan. These facts might help your decision. At your stated income of $120,000, you will pay about $300/mo extra for Medicare Part B and Part D bringing your total cost for A,B, and D to about $430/mo. A Silver level Covered California plan which is roughly comparable in benefits would cost you at least $700/mo.

Age 65 and Not Medicare Eligible?

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Question: I am 65 years old next month, but I have to pay a premium for Part A because I have not worked long enough to qualify. Can I sign up for a Covered California plan?

Answer: Yes, People age 65 or older who are not entitled to premium-free Medicare can purchase health insurance coverage in Covered California (except undocumented immigrants). If you sign up for a Covered California plan, you may be eligible for premium tax credits to make the coverage more affordable depending on your income.

Keep in mind that if you are able to continue working, you may be able to earn enough work history to qualify for premium-free Medicare in the future. So another option for you to consider would be to sign up for Part A and Part B coverage when you turn 65 (you will have to pay a premium for both Part A and for Part B), and when you become eligible for premium-free Part A through your work history, you will then only have to pay a premium for Part B.

Question: I will be eligible for Medicare starting in January. Can I stay in Covered California and keep gettin my subsidy instead or as a supplement to Medicare?

Answer: If you are eligible for Medicare, you cannot purchase a Covered California health plan and get premium assistance. However, if your income is low you may still be eligible for Medi-Cal. The Covered California application automatically checks to see if consumers qualify for Medi-Cal. If you qualify for both Medicare and Medi-Cal, Medi-Cal will help pay for Medicare premiums and cost-sharing requirements. Medi-Cal may cover additional benefits, such as dental services, nursing home care, and personal care services. Medi-Cal may also provide extra financial assistance to help with the cost of Medicare Part D prescription drug coverage.

Gap Between Kaiser and Medi-Cal?

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Question: My roommate is moving from Kaiser to Medi-Cal with Kaiser (she just got her packet from the state yesterday, and will sign up with Alameda Alliance). My question is, will there be any gaps in her coverage? At some point she'll have to stop with Kaiser and get on Medi-Cal, but I'd like for her coverage to not be interrupted. She can pay her Feb premiums-can she elect to start Medi-Cal coverage on March 1st? The Alameda Alliance person I talked to indicated she'd have to cancel her plan with Kaiser first, but couldn't one just stop and the other start right after? She has a lot of health issues and would like to keep her health insurance through any gaps.

Answer: Medi-Cal coverage starts immediately once the application is approved. Your friend is already covered by Medi-Cal. Electing Alameda Alliance as your managed care provider within Medi-Cal should be done immediately as well. She should not continue to pay insurance premiums for her previous coverage.

Question: Recently, I discovered that I make a few thousand dollars over the Medi-Cal limit for 2014. I'm just now doing my taxes. What should I do? My average is/was $23,000.

Answer: Though it's not clear from your question, I'm going to assume that you are currently receiving Medi-Cal benefits and your income no longer makes you eligible. All you have to do is notify Medi-Cal of your current income. Medi-Cal will drop you from their roles and when that happens you will be eligible for Covered California with premium assistance. You will not be penalized nor have to pay any additional taxes for 2014.

Question: My 82 year old mother is a recent immigrant, no job/income here. Covered CA Cost calculator asks for household income. If she put in 0 income, she's not eligible to CoveredCA but is referred to Medi-Cal, which we know she's not eligible for (5-year rule deeming because of the Affidavit of Support). Is she supposed to put in my income because I sponsored her legal permanent residence?

Answer: Yes. Your mother can apply for Covered California as part of your household. Your household income will determine if your mother is eligible for premium assistance. Because your mom has no income and she lives in your home, she is a dependent for tax purposes.

Question: As a small group health plan in PA (less than 20 employees), employees/dependents age 65 over increase my premiums substantially. Because of my group’s size, is it legal to offer incentives to entice them to go off the group plan and onto Medicare at age 65…or simply not offer coverage to those actively at work age 65+ since they have other options and the younger employees don’t.

Answer: This one comes up often so I’m going to quote chapter and verse:

“Medicare beneficiaries are free to reject employer plan coverage, in which case they retain Medicare as their primary coverage. When Medicare is primary payer, employers cannot offer such employees or their spouse’s secondary coverage for items and services covered by Medicare. Employers may not sponsor or contribute to individual Medigap or Medicare supplement policies for beneficiaries who have or whose spouse has current employment status.” (Excerpt from CMS Medicare Secondary Payer Manual, Chapter 1, (Rev 34,09-07-05)).

If an employer offers a Medicare beneficiary an incentive, financial or otherwise, not to enroll in the group, the health plan is subject to a civil money penalty of up to $5,000 for each violation. In addition, an excise tax could be applied that would equal 25% of the plan’s expenses incurred during the calendar year. This applies to all groups -large and small.

Medicare Supplement Upgrade?

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Question:I have a high deductible Med Supp plan. My health is declining, can Im switch to a comprensive Med Supp Plan during open enrollment without penalty?

Answer: You can apply to switch to a different Medicare supplement plan at anytime of the year. However pre-existing conditions would be considered. In California you are guaranteed to switch to a like for like or lesser plan from any carrier during your birthday month. However, if you want to move to a more comprehensive MedSup plan (considered an upgrade) your health history will be considered and you could be denied the plan change. But it is not too hard to qualify for a supplement plan even for those with pre-existing conditions. One carrier will take people as long as they have not been in the hospital 90-days prior to applying.

A Medicare Advantage Plan would be more comprehensive coverage than your current Original Medicare and a High Deductible Supplement. The Medicare Advantage and Part D Prescription Drug Open Enrollment is between 10/15-12/07. During this time, you will qualify regardless of pre-existing conditions other than End Stage Renal Disease.

Question: I’m approaching at 65 and my employer is strongly encouraging me to cancel my group coverage and elect Medicare coverage only. Can they do that?

Answer: Yes, your employer can “strongly encourage” you to take Medicare coverage when you become eligible. It’s important that you understand that your employer has been paying at least $500 a month to provide health insurance for you. Medicare will cost $100 per month. Perhaps you could negotiate a reimbursement for the Medicare Part B premium of $100 and an additional $130 - $150 per month for a Medicare Supplement - total cost to your employer is $250 per month and you get virtually 100% coverage. This advice applies only to group health plans with less than 20 employees where Medicare is the primary payor and the group health plan is secondary.

In larger groups, Medicare is the primary payor and there are rules that forbid employers from targeting Medicare-eligible employees by providing incentives (financial or otherwise) for them to drop employer coverage in favor of Medicare. As one of our readers, Chris Anderson of Sylmar, CA, pointed out: “The Centers for Medicare and Medicaid Services (CMS), formerly known as the Health Care Financing Administration (HCFA), has confirmed this prohibition many times, and employers should note that CMS may assess a penalty of up to $5,000 for each violation. An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer. Even if the employer does not contribute to the premium, but merely collects it and forwards it to the appropriate individual’s insurance company, the GHP policy is the primary payer to Medicare.”

Question: I am turning 65 and work half-time. I am not eligible for health benefits, so I am on my wife’s policy. It is at a state university and it is through Anthem. Will I be able to continue on her policy, or will Anthem kick me out?

Answer: When you turn 65 you have health insurance available. It’s called Medicare. Your wife’s employer is no longer obliged to offer you coverage as a dependent on her employer-sponsored policy. Medicare is excellent coverage and it’s available to you for less than $100 per month. Anthem will not “kick you out” because they collect a nice piece of change from your wife’s employer as long as you remain on the group plan. Do the right thing and opt for Medicare.

Question: Will I be able to keep major medical insurance if i am not employed or being offered group insurance after the age of 65 if i only have an individual policy?

Answer: Yes. You can keep your individual health insurance after age 65. However, you would be wiser to take Medicare coverage (assuming you qualify). Medicare coverage is more comprehensive than most individual health insurance plans and the cost of Medicare coverage would be a small fraction of the cost of a private plan post 65.

HRA for Medicare Premiums

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Question: Can an HRA reimburse employees for Medicare premiums?

Answer: Yes. In 2002, the IRS issued Notice 2002-45 and Revenue Ruling 2002-41 that opened the door for employers to legitimately reimburse non-group health insurance premiums to their employees as a tax-free fringe benefit. When an HRA is combined with non-group health insurance, including MediCare, the HRA can reimburse the employees’ premiums. The HRA and high deductible individual health insurance combination is absolutely the cheapest health plan available today.

Need Help with Doughnut Hole

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Question: I have prescription drug coverage under Medicare and will be hitting the "doughnut hole" pretty soon. What will the new healthcare bill help me pay for my drugs?

I'm signed over my Medicare to Secure Horizons, which I like. I heard these type plans are to be cancelled by the new healthcare reform?

Continuation of MediGap Coverage

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Question: I am retired and on Medicare with a BC/BS Medigap policy which continues to be administered by my former employer. I pay about $100/month for this coverage. If my previous employer discontinues this insurance, will I have the same COBRA-HIPPA options for continuation of the MediGap coverate that apply in layoff situations to persons who are not yet eligible for Medicare?

Medicaid Coverage Declined

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Question: I was informed that Medicare would no longer cover my grandson (age 3) because I'm not his legal guardian anymore- but he and his father live with me and (father) cannot afford health insurance. Will this insurance cover my grandson?

Question: Is it possible for me to get medicare supplement insurance? I am 62 and had lukemia which is why i have medicare in the first place.

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