What Obamacare means for retirees

When the autumn leaves start to fall, it is time for Medicare enrollment. Starting on October 15th, seniors can shop for prescription drug or Medicare Advantage managed-care plans in online exchanges that let them compare features and prices.

Wait a minute, you’re thinking – online health insurance exchanges? Isn’t that the Obamacare insurance market launch on October 1st?

No, these Medicare exchanges are completely different, but they do sound alike – and that is causing confusion for some retirees, who are asking what the Affordable Care Act exchange launch means to them.

Here is the short answer: nothing. If you are already on Medicare, there is no need to use the Obamacare health insurance exchanges; in fact, it is illegal for insurers to sell an exchange policy to anyone on Medicare.

Yet a recent survey by Medicare prescription drug plan provider Express Scripts found that one in five seniors thinks that they can enroll in a medical and prescription drug plan through a health insurance exchange; while 17 percent think health exchanges could replace their Medicare plan altogether.

“There’s a lot of confusion out there about which programs apply to different groups,” says Matthew Eyles, executive vice president of Avalere Health, a healthcare consulting and research firm. “For Medicare-eligible people, nothing is really changing.”

That is not to say the Affordable Care Act is not important to retirees. The law made some important improvements to Medicare, including shrinking the catastrophic-level coverage gap – known as the “donut hole” – and adding a free annual preventative check-up.

And the new insurance exchanges will be important for retirees ineligible for Medicare, either because they are younger than 65 or have not worked at least 10 years (lifetime) in a job that required payroll tax payments.

For these folks, the Affordable Care Act will make it much easier to get coverage, because the law prohibits insurers from turning away applicants with pre-existing conditions. Insurers also can’t put lifetime limits on the dollar value of coverage or rescind coverage if you become ill.

But for anyone already over 65, it is time to keep on keeping on. It is a good idea to use the October 15-December 7 enrollment period to re-shop your current coverage using the Medicare Plan Finder (here), just as you may have done in the past. Learn more at Reuters Money.