There has been a lot of recent news about the City of Memphis Retiree Health plan and the cities decision to to eliminate the premium subsidies for many of its retired employees. Because the premiums will be so large, some retirees may be better off switching to individual coverage.
When considering other coverage it will be important to remember that there are rules that dictate when a person a person can enroll and whether a person can be turned down for coverage. There is one set of rules for people who are NOT covered by Medicare and another set of rules for people who ARE covered by Medicare. Let’s start with the rules for people who are NOT covered by Medicare.
Not Covered by Medicare
If you are NOT covered by Medicare AND over 65 you are likely not eligible for Medicare. If this is you, you should NOT be losing your subsidies next year.
If you are under age 65 and not covered by Medicare, you will be eligible to purchase individual health insurance during the next Open Enrollment which begins November 15 and runs through February 15 2015. Depending on your financial situation, you can look at getting health insurance either on the Federal Marketplace or directly from an insurance company. DO NOT drop your coverage now or before the end of the year to enroll in an individual plan. A rate increase does not qualify you for a special enrollment under the Affordable Care Act. If you apply for coverage between November 15 and December 15 your coverage will begin January 1, 2015.
Under the Affordable Care Act or Obamacare, you cannot be turned down due to a pre-existing condition due to your health nor can a claim be denied because it is a pre-existing condition. Insurance carriers may only charge higher premiums to tobacco users. If your household income is very low, you will likely qualify for premium & benefit subsidies if you apply for coverage on the Federal Marketplace.
Covered by Medicare
Most individuals who are covered by Medicare either keep traditional Medicare Parts A & B and then purchase a Medicare supplement policy to limit their risk for services that are covered by Medicare Parts A & B but not paid by Medicare. (i.e. things subject to Medicare deductibles, coinsurance, etc.). Medicare supplement plans were not affected by the Affordable Care Act and are generally guaranteed issue at certain times. Generally when a person turns 65 and/or enrolls in Medicare Part B, he/she will have a 6 month window where he/she can purchase a Medicare supplement plan regardless of his her health. In Tennessee this applies to people who are under 65 and have Medicare due to a disability; however, this is not true in every state.
Once the 6 month window has passed, a person can purchase a Medicare supplement at any time; however, insurance carriers can ask health questions and turn someone down if he/she has too many health problems.
Another choice for a person on Medicare would be to purchase a Medicare Part C or Medicare Advantage Plan. These plans have certain advantages (primarily low premiums); however, they come with a lot of restrictions as well. Medicare Advantage plans can only deny coverage to individuals who have been diagnosed with End Stage Renal Failure. Medicare Advantage plans must provide coverage that is at least as good, on average, as Medicare Parts A & B. All Medicare Advantage plans have an out of pocket maximum for covered medical services and many include prescription drug benefits (not subject to the out of pocket limits). They often provide extra benefits such as coverage for preventive dental services, eye exams, etc.
Medicare Advantage plans typically come in the form of an HMO or PPO plan. Most HMOs restrict access to participating providers only. Some also require consulting a primary care physician to get a referral to see a specialist. PPO plans will permit a person to see a provider who does not participate; however, Medicare Advantage plans are not popular with health care providers and many will not treat a patient who is covered by a Medicare Advantage plan.
Individuals who are covered by Medicare will also need to make sure they have considered the cost of prescription drugs. Stand alone prescription drug plans are available under Medicare Part D. Many Medicare Advantage plans include this coverage as well. All Part D drug plans have the same basic features and cover most categories of drug; however, they don’t all cover the same drugs or have the same copays and deductibles. Medicare Part D plans cover a wide range of drugs and provide very good coverage in the event someone has very expensive drug costs; however, there is no out of pocket maximum included in any Part D drug plan.
Individuals with incomes very close to or below the Federal Poverty Level and covered by Medicare may also qualify for assistance from Medicaid. In some cases, Medicaid will cover a persons Part B premiums as well as any cost sharing under Medicare Parts A & B..
All City retirees will need to carefully consider all of these factors before dropping any coverage with the City.