Turning 65 and Marketplace Plans

A common question we get asked is when I turn 65 and become enrolled in Medicare, can I keep my silver policy when I am enrolled in Medicare? And, if I do, will I automatically lose my premium subsidy? Do I have to cancel the policy or will the insurer do it automatically?

A. You don’t have to give up your marketplace policy when you turn 65, but financially it probably doesn’t make sense to keep it, says Tricia Neuman, director of the program on Medicare policy at the Kaiser Family Foundation (KHN is an editorially independent program of the foundation.)

Once your eligible for Medicare, you will no longer qualify for premium tax credits on the marketplace, making that coverage more expensive. In addition, you may face higher Medicare premiums if you don’t enroll in that coverage once you becomes eligible. “Those who delay could face a lifetime premium penalty for late enrollment,” Neuman says. The penalty could be 10 percent for every year you delay enrolling in Medicare Part B, which covers outpatient services, and 1 percent for every month you delays enrolling in Part D, which covers prescription drugs.

You should cancel your marketplace plan yourself as soon as you move to Medicare. You could be charged for the full monthly amount of coverage if you do not.

This KHN story can be republished for free (details).