What does the Affordable Care Act mean for retirees?

After much fanfare and controversy, Obamacare’s health insurance exchanges are open for business.

What does the Affordable Care Act mean for retirees? It all depends on your age. If you’re 65 or older and on Medicare, there are no big changes for you to worry about. But the ACA offers important new options for retirees who aren’t old enough–or eligible–for Medicare.

Older adults often have trouble finding affordable individual insurance policies or can’t get coverage at all because of pre-existing conditions. The ACA changes all that. Insurers can’t turn you down for a pre-existing condition, and the law puts a floor under the benefits that policies must provide. Finally, the premiums will be affordable if you qualify for the law’s sliding-scale tax subsidies and credits.

Here’s a look at some of the key questions retirees face this fall as the ACA’s final implementation kicks in.

Q: If I’m retired, do I use the Obamacare exchanges or Medicare?

A: There’s been some confusion about this question among seniors–in part because the ACA insurance exchanges are launching right around the same time that Medicare’s fall enrollment period for prescription-drug and Advantage plans begins (Medicare enrollment runs from Oct. 15 through Dec. 7). The ACA exchange launch is supported by heavy publicity and advertising, and there’s been a great deal of news coverage. Federal officials are worried that the noise is confusing some seniors, who may try to enroll on the exchanges–or fall victim to fraudulent signup campaigns.

For example, a survey released in September found that one in five seniors thinks (mistakenly) that they can enroll in a medical and prescription-drug plan through a health insurance exchange; 17% think health exchanges could replace their Medicare plan altogether.

So here’s a clear message: If you are enrolled in Medicare Part A (hospitalization), you do not need to enroll on the exchanges to meet any of Obamacare’s insurance coverage mandates. What’s more, it may even be illegal for anyone who knows that you already have Medicare to sell you a policy on the exchange.

Medicare prescription-drug and Advantage plans are not available on the Obamacare exchanges. If you already have one of these plans, it’s a good idea to reshop your coverage at least every couple of years, but you should do that just as you have in previous years, using the Medicare Plan Finder.

If you’re retired but are too young for Medicare or don’t meet the program’s eligibility requirements (generally, 10 or more years of employment in positions that withheld FICA taxes), the ACA exchanges provide a new opportunity to get covered.

Q: What do I do if I’m enrolled on an exchange and then qualify for Medicare?

A: If you buy an exchange policy and then qualify for Medicare sometime in 2014, enroll in Medicare (Part A and B) as soon as you qualify. Then you can drop your exchange coverage, but be sure to coordinate the end date with the effective date of your Part B coverage.

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