Q. What are the Health Insurance Marketplaces and how are they different from Small Business Health Options Program (SHOP) plans?
A. The Health Insurance Marketplaces were created by the Affordable Care Act (ACA). They allow individuals to buy insurance if they do not have insurance or do not have enough insurance. You can access the Marketplace online at www.healthcare.gov or over the phone at 1-800-318-2596. Plans sold through the Marketplace are also known as Qualified Health Plans, or QHPs. Many people who have a Marketplace plan get cost assistance in the form of tax credits, which lower the plan’s monthly premium. SHOP plans are employer plans purchased through the Marketplace for their employees.
Q. How does having a Marketplace health plan, or a SHOP plan, affect signing up for Medicare?
A. If you are eligible for Medicare, you should not use the Marketplace to get health and drug coverage, except in two cases: 1) if you have End Stage Renal Disease (ESRD, kidney disease that requires dialysis or transplant) or 2) if you do not qualify for premium-free Part A and you are not yet enrolled in Medicare. Individuals can keep their SHOP plan even once they are eligible for Medicare.
Coverage having both a SHOP plan and Medicare can differ, however, by size of employer. Depending on how many employees there are, Medicare will either pay first or second for health care. If Medicare pays first, it is important to enroll in Medicare when you are first eligible. If you do not have Medicare coverage when Medicare is supposed to pay first, the SHOP plans may give you little or no coverage at all. It is important to speak with your employer to learn more about how your insurance will work when you enroll in Medicare.
Individuals with ESRD who are eligible for Medicare have the choice to enroll in a Marketplace plan with cost assistance or keep their current Marketplace plan instead of enrolling in Medicare. If you are thinking of delaying Medicare enrollment to keep or enroll in a Marketplace plan, you should consider how the Marketplace plan coverage and costs compare to Medicare. Sometimes, the Marketplace plan may have lower cost-sharing than Medicare, but the plan may also have a limited network of providers that you can see. Individuals already with Medicare coverage due to ESRD will likely have access to a wider range of providers without network restrictions.
Individuals can also keep a Marketplace plan with cost assistance if they do not qualify for premium-free Part A and are not yet enrolled in Medicare. If you are eligible for Medicare but will have to pay a premium for Part A, you can keep your Marketplace plan with cost assistance as long as you do not enroll in Medicare. If you are already enrolled in Medicare and you pay a Premium for Part A, you can disenroll from Part A and enroll in a Marketplace plan with cost assistance. However, if you disenroll from Part A, you will have to pay back anything that Part A paid for your health care in the past.
You should consider all consequences carefully before deciding to take a Marketplace plan instead of Medicare. It’s a good idea to speak with a State Health Insurance Assistance Program (SHIP) or Michigan Medicare/Medicaid Assistance Program (MMAP) counselor about the outcomes of your decision. Contact our local MMAP counselors by calling 1-800-803-7174, or contact Area Agency on Aging’s Info Line for Aging & Disability at 1-800-654-2810.
The Medicare Rights Center is the author of portions of the content of this column but is not responsible for any content not authored by the Medicare Rights Center.