Ask Emily is a biweekly column by Emily Bazar of the CHCF Center for Health Reporting, answering questions about the Affordable Care Act. Read all of her columns at sacbee.com/askemily.
It’s open-enrollment season again, and I’m not just talking about Covered California.
Among those making important health care decisions right now are more than 50 million Americans – including more than 5 million Californians – who have Medicare. That’s the federal health insurance program for people 65 and older and those with kidney failure and certain disabilities.
Medicare open enrollment runs until Dec. 7.
From a consumer standpoint, Obamacare doesn’t shake up Medicare dramatically. But the two intersect, and sometimes in ways that could crimp your finances. Today, I’ll explain what you or your loved ones can do to help you avoid a crash at that intersection.
I signed up for health insurance through Covered California. I still have the policy, but I turned 65 and got Medicare. I had an accident and Medicare paid as the primary. Can I use the Covered California policy to pay my co-pays?
Unfortunately, no. Both plans are considered primary insurance, which means neither is secondary in this situation, says Elaine Wong Eakin, executive director of California Health Advocates, a Medicare advocacy and education group.
Simple enough, right? No way. There’s arguably a more important issue buried in the question and it has to do with these five words: “I still have the policy.”
If you have a Covered California plan, chances are that you also receive tax credits that reduce your monthly insurance premiums. (Nearly 90 percent of people who purchased their plans through Covered California, the state’s health insurance exchange, receive the credits.)
When you turn 65 and enroll in Medicare, you become ineligible for those tax credits, which can amount to hundreds of dollars a month.
“On the day your Medicare coverage begins, your (tax credits) end and your Covered California plan will also be canceled,” says Larry Hicks, a spokesman for Covered California.
But don’t count on Medicare and Covered California to communicate with each other about your policy. And, beware, you will owe money back to the government if you keep taking the credits after your Medicare begins.
Tom Freker, a Fountain Valley insurance agent, discovered that unpleasant fact this year.
He has several clients with subsidized Covered California plans who aged into Medicare. The first received close to $600 per month in tax credits, he says. At the time, he wasn’t sure whether to leave her on her Covered California plan once her Medicare coverage began, so he called her health insurer and Covered California to find out.
“When I called Covered California, they said ‘Your client is going to get hammered if she stays on her plan,’ ” he says.
At the end of this year, Covered California will mail tax forms to all consumers who receive tax credits, similar to the 1099 you get if you earn interest income, Hicks says.
These forms 1095 will detail the amount of tax credits you received and will have to be reported to the IRS when you file your taxes, he says. If the federal government determines that you received more tax credits than you were eligible for, you will owe the government a repayment, Hicks says.
So what does this mean? It means, my friends, that you need to take the initiative and cancel your Covered California plan when your Medicare coverage starts.
“We tell people to call Covered California and their health plans to save them from having to pay anything back,” Wong Eakin says.
She advises you to make these calls before your Medicare coverage becomes effective.
If you’re not sure if this applies to you, there’s free, one-on-one Medicare counseling available through a group called the Health Insurance Counseling and Advocacy Program, or HICAP. Visit the California Health Advocates website at www.cahealthadvocates.org or call (800) 434-0222 to find HICAP offices in your county.
And don’t forget, if you already have Medicare, you do not need to purchase additional coverage to meet the Obamacare insurance requirement. You’re already covered.
However, if your Medicare does not include Part A, which covers hospitalization, you may not meet the Obamacare insurance requirement. Call HICAP to find out what options you have.
Finally, during this open enrollment season, don’t go looking for Medicare plans – whether we’re talking Part D, Medicare Advantage or Medigap – from Covered California.
Covered California specializes in private insurance policies for individuals, families and small businesses. It does not sell plans for government-sponsored health programs like Medicare and Medi-Cal.
Covered California’s open enrollment runs through Feb. 15, 2015.
Questions for Emily: AskEmily@usc.edu
Click here to find previous Ask Emily columns.
The CHCF Center for Health Reporting partners with news organizations to cover California health policy. Located at the USC Annenberg School for Communication and Journalism, it is funded by the nonpartisan California HealthCare Foundation.