When you become eligible for Medicare, there’s a lot to consider. It’s important to understand how this kind of coverage fits in with coverage through Covered California and the steps you’ll need to take to transition to Medicare on time.
Medicare is a federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with permanent kidney failure.
It’s important to note that Covered California doesn’t sell Medicare plans. If you are currently a Covered California enrollee and become eligible for or are enrolled in Medicare, you may need to take immediate action to avoid financial penalties and gaps in health coverage.
You can get free counseling regarding your Medicare eligibility and enrollment options, including whether you qualify for programs to reduce your Medicare costs, by calling the Health Insurance Counseling and Advocacy Program (HICAP) at (800) 434-0222.
Medicare and What It Covers
Medicare shouldn’t be thought of as a single program — it’s made up of several parts that provide coverage for different types of services.
Medicare Part A, also known as hospital insurance, covers inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health services. Medicare Part A is usually free if you or your spouse paid Medicare payroll taxes for approximately ten years while working (this is called “premium-free Part A”). If you don’t qualify for premium-free Part A, you may have the option to pay for hospital insurance, also called “premium Part A”.
Medicare Part B, also known as medical insurance, covers certain doctors’ services, outpatient care, medical supplies and preventive services. Medicare Parts A and B combined is also known as “Original Medicare.”
Medicare Part D, also known as prescription drug coverage, can be added to Original Medicare.
Instead of purchasing Original Medicare, some people choose to buy a Medicare Advantage plan, which is Medicare Part C. Medicare Advantage covers hospital and medical insurance, and usually also covers prescription drugs.
Covered California and Medicare
Transitioning from Covered California to Medicare is an important step. Make sure you take action and keep track of important dates and deadlines to avoid unwanted consequences.
In general, people who are eligible for Medicare — even if they do not enroll in it — aren’t eligible to receive financial help (premium tax credits) to lower the cost of a Covered California health plan.
People who are eligible for Medicare must report their Medicare eligibility to Covered California within 30 days and will usually need to cancel their Covered California. Your Covered California plan won’t be automatically canceled when you become eligible for Medicare, even if you enroll in a Medicare plan with the same insurance company. You must cancel your plan yourself at least 14 days before you want your coverage to end by contacting Covered California.
If you are eligible for Medicare and you keep your Covered California plan, you may face serious consequences. For example:
- You may have to pay back all or some of your premium tax credits to the Internal Revenue Service (IRS).
- Or, there could be a delay in your Medicare coverage start date. If you don’t sign up for Medicare Part B (medical insurance) during your initial enrollment period, you will have to wait for the general open enrollment period (Jan.1 to March 31), and then your coverage wouldn’t begin until July of that year.
- In addition, you may have to pay lifetime penalties for late enrollment in Medicare and your premiums may increase by 10 percent or more.
There is an exception for people eligible for premium Part A. If you must pay for Medicare Part A, you may purchase a Covered California health plan instead of enrolling in Medicare Part A. You might also qualify for financial help to lower your plan costs, depending on your income. However, you may still face a permanent late enrollment penalty for Part B if you don’t sign up during your initial enrollment period. It’s important to carefully think through your options.
Covered California, Medi-Cal, and Disabilities
People with a plan through Covered California who have been determined disabled by the Social Security Administration will be automatically enrolled in Medicare within two years of receiving Social Security Disability Insurance (SSDI) income.
Before You Are Automatically Enrolled in Medicare
You can purchase health coverage through Covered California during your two-year waiting period. Depending on your income and family size, you may qualify for financial help to lower the cost of your Covered California plan, or get low-cost or no-cost Medi-Cal.
As Soon as You Are automatically Enrolled in Medicare
You will no longer qualify for financial help to pay for your Covered California plan after your two-year waiting period ends. You will need to cancel your health plan through Covered California at least 14 days before you want your coverage to end. If you were enrolled in Medi-Cal instead of Covered California, you can ask your local county office if you will continue to qualify for other Medi-Cal programs that can lower your Medicare costs.
What to Do Next When You Become Eligible for Medicare
If you currently have a health plan through Covered California:
- Call the Social Security Administration at (800) 772-1213 and ask if your Medicare Part A (hospital insurance) is free and when your coverage starts.
- Then, call Covered California at (800) 300-1506 (TTY: 888-889-4500) and tell us about your Medicare coverage. You can cancel your Covered California plan or discuss your coverage options. (A 14-day notice is required before canceling your Covered California plan. Your Covered California plan cannot be canceled for past months.)
If you don’t currently have a health plan through Covered California:
If you’re currently enrolled in Medicare Part A, or eligible for premium-free Medicare Part A, you can’t enroll in new coverage through Covered California. This is because Medicare Part A is considered minimum essential coverage under the Affordable Care Act. But depending on your income and assets, you may be eligible for additional coverage through Medi-Cal. Once you’re enrolled in Medicare, you can contact your local county office or complete the Covered California application to see if you also qualify for Medi-Cal.
Things to Know
Most people will not be automatically enrolled in Medicare.
Unless you currently receive Social Security benefits, Medicare enrollment is not automatic, and you must actively enroll. The timing of your Medicare enrollment is very important. The initial enrollment period starts three months before the month you turn 65 and it ends three months after the month you turn 65. You should sign up for some Medicare parts before the month you turn 65 to avoid a health coverage gap.
If you miss your initial enrollment period, you may have to wait until the general open-enrollment period in January to sign up, with coverage not starting until July of that year. This could result in a delay of the start date of your Medicare coverage. This could also mean that you’d have to pay a higher Medicare premium for the rest of your life.
The Social Security Administration can tell you if you’re eligible for Medicare, if you have to pay a premium for Part A (hospital insurance), and when your coverage starts.
Call the Social Security Administration at (800) 772-1213. To get an immediate estimate of when you’re eligible for Medicare and your premium amount, use the Medicare Eligibility and Premium Calculator.
Covered California won’t automatically cancel your plan when you enroll in Medicare.
You should call Covered California at (800) 300-1506 (TTY: 888-889-4500) as soon as you know your Medicare eligibility and start date. Covered California requires a 14-day notice before canceling your coverage. Your Covered California coverage can’t be canceled for past months.
To avoid a gap in coverage or tax penalties, call Covered California as soon as you find out about your Medicare eligibility confirmation from the Social Security Administration, but before your Medicare coverage start date.
If you’re eligible for or enrolled in premium-free Medicare Part A (hospital insurance), you can’t apply for new coverage through Covered California.
However, if you must pay for Medicare Part A, you may sign up for coverage through Covered California instead of Medicare Part A.
If you currently have a Covered California plan and become eligible for premium-free Medicare Part A (hospital insurance), you can keep your current Covered California plan, but you will have to pay the full cost.
You must report your Medicare eligibility to Covered California within 30 days of becoming eligible. You will no longer be eligible to receive financial assistance and your monthly premium and out-of-pocket cost may go up by a lot. However, if you have to pay a premium for Part A, you may keep your Covered California plan and receive financial help if eligible, instead of Medicare Part A – but not both.
Family members on your Covered California plan who aren’t eligible for Medicare can stay on the Covered California plan and continue to get financial assistance, if eligible.
However, their eligibility must go through the determination process again, which may change the amount of financial assistance they can receive.
You can keep your dental plan through Covered California when you enroll in Medicare, but you can’t make any changes to it or choose a different dental plan.
If you can’t afford your Medicare costs or premiums, you can see if you qualify for financial assistance programs to help.
Contact your local county office to see if you’re eligible for income-based Medicare Savings Programs that can lower your Medicare costs, including help with paying your premiums.
Medicare also offers Medigap, which is private supplemental insurance that helps pay for some healthcare costs like copayments, coinsurance, and deductibles. You should apply for Medigap within 6 months of enrolling in Medicare Part B (medical insurance). To learn more about the different coverage options under Medicare and how to enroll using the Medicare Plan Finder, call (800) MEDICARE.
For free, personalized counseling on Medicare coverage questions, rights, and health care options, call (800) 434-0222 or visit the Health Insurance Counseling and Advocacy Program (HICAP) website.
For questions about enrolling in Medicare, call the Social Security Administration at (800) 772-1213.
To review and compare Medicare options, visit the Medicare website, or call (800) MEDICARE.
To see if you will qualify for other Medi-Cal programs or programs to help pay your Medicare costs or premiums, contact your local county office.
Additional information about Covered California and Medicare: Medicare Fact Sheet
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