Per CMS, Some Medicare Recipients May be Overinsured
According to a recent article in the Washington Post the Centers for Medicare and Medicaid Services (CMS) is reminding newly eligible Medicare beneficiaries to cancel their Marketplace Coverage before Medicare begins. Failing to do so may cause these beneficiaries to be, ironically, over insured.
But that may be the least of their concerns. Once Medicare kicks in, many of these enrollees will no longer be eligible for the subsidies they’ve been receiving for their Marketplace Coverage. Additionally, they will be responsible for paying back any subsidies they’ve received once Medicare takes affect.
On the other side of the coin, those who stay on their Marketplace plan and fail to enroll during the their initial enrollment period (which runs from 3 months before they turn 65 until 3 months after their 65th birthday) will have to pay a penalty for life; this penalty is 10% of the premium payment for each 12 month period they were late in signing up for Part B Medicare coverage.
Additionally, seniors who are late enrolling may only sign up for Medicare from January-March of each year for coverage that will not begin until the following July. Seniors who have no choice but to hold onto their Marketplace coverage until they are allowed to enroll, they will no longer receive subsidies that made their health care affordable.