Turning 65: Insurance Change Event

Turning 65 is a significant milestone, and it can also be a qualifying event for health insurance purposes. This means that turning 65 allows you to make changes to your health insurance plan outside of the usual annual open enrollment period. In the United States, those aged 65 and over qualify for Medicare, which serves as the primary source of health insurance for this age group. Original Medicare, comprising Parts A and B, is offered by the federal government, while Medicare Advantage (Part C) is provided by private insurers. When individuals turn 65, they have an initial enrollment period of six months to sign up for Medicare, starting three months before their birthday and ending three months after.

Original Medicare vs Medicare Advantage

Turning 65 is a qualifying life event that gives you the opportunity to choose a Medicare plan. Medicare is a federal program that serves as the primary source of health insurance for those aged 65 and older.

Now, when it comes to choosing between Original Medicare and Medicare Advantage, there are several factors to consider. Here's a detailed comparison to help you understand each option:

Original Medicare

Original Medicare is the federal government's health insurance program for individuals aged 65 and above, younger people with disabilities, or those of any age with end-stage renal disease (ESRD). It consists of two parts:

• Part A (Hospital Insurance): Covers inpatient hospital stays, care in skilled nursing facilities, hospice care, and some home healthcare services.
• Part B (Medical Insurance): Covers certain doctors' services, outpatient care, medical supplies, and preventive services.

Original Medicare generally doesn't cover long-term care, routine dental, vision, and hearing services. If you want extra coverage for these services and even prescription drugs, you might consider Medicare Advantage.

With Original Medicare, you can choose any doctor or specialist who accepts Medicare without needing referrals. According to the Kaiser Family Foundation, the majority of doctors accept Medicare, so you likely won't need to change providers.

Medicare Advantage

Medicare Advantage, also known as Part C, is an alternative to Original Medicare offered by private health insurance companies. It combines Part A and Part B and often includes Part D (prescription drug coverage) as well. Some key features of Medicare Advantage include:

• Expanded Coverage: Medicare Advantage plans often include prescription drug coverage and additional benefits such as routine dental, vision, and hearing care.
• Provider Network: Most Medicare Advantage plans have a provider network, which means you'll need to use doctors and facilities within that network. If you go out of network, your costs may be higher.
• Out-of-Pocket Costs: These plans have a yearly limit on out-of-pocket expenses. Once you reach this limit, you won't have to pay anything more for covered services for the rest of the plan year.
• Premiums: Many Medicare Advantage plans offer affordable or $0 monthly premiums. However, you still need to pay the monthly Part B premium, along with any additional MA plan premium.
• Referrals: In most cases, you'll need a referral from your primary care physician to see a specialist.

Comparison Summary:

Original Medicare offers more flexibility in choosing healthcare providers and isn't restricted by geographical networks. However, it doesn't have a cap on annual out-of-pocket expenses. On the other hand, Medicare Advantage plans often provide additional benefits, have lower out-of-pocket costs, and include prescription drug coverage. The trade-off is that you need to stay within the plan's provider network and may need referrals for specialists.

Losing employer-sponsored health insurance

Understand your options

Firstly, it is important to know that losing your job-based health insurance is considered a qualifying life event, which means you have the right to make changes to your health plan outside of the annual open enrollment period. This is known as a Special Enrollment Period (SEP). During this time, you can either enroll in a new health plan or make changes to your existing coverage.

Act quickly

It is essential to act promptly, as you typically have 60 days before or after the qualifying life event to make changes to your health insurance. Some states may offer a more extended window, so be sure to check the specific rules in your state.

Explore alternative coverage options

When it comes to alternative coverage options, here are a few paths you can consider:

• COBRA coverage: This option allows you to retain your existing employer-sponsored health insurance for a limited period, usually 18 months, by paying the full premium cost, including the portion previously covered by your employer. While COBRA can be expensive, it ensures that your coverage remains the same, which may be crucial if you are undergoing treatment or have pre-existing conditions.
• Marketplace plans: Losing your employer-sponsored insurance qualifies you for a Special Enrollment Period to enroll in a Marketplace plan. You can explore your state's Affordable Care Act (ACA) exchange to find new health insurance options. Losing employer-sponsored coverage also makes you eligible for government-sponsored premium subsidies or cost-sharing programs for exchange plan members.
• Medicaid: Depending on your income and the state you live in, you may be eligible for Medicaid, which offers free or low-cost comprehensive benefits. Even if you didn't qualify for Medicaid before, losing your job may change your eligibility status, so it is worth checking.
• Spouse's or parent's health plan: If your spouse has employer-based health insurance, you may be able to enroll in their plan. Additionally, if you are under 26, you can take advantage of the Affordable Care Act and be covered under your parent's insurance plan.
• Short-term health insurance: While short-term health insurance can provide continuous coverage, be cautious of limited benefits and potential denials of coverage for pre-existing conditions.

Gather the necessary documentation

To support your application for a Special Enrollment Period, you may need to provide certain documents. These can include a letter from your employer or insurance company, a COBRA coverage notice, rental or mortgage documents, and other forms specific to your situation.

Consult experts

Navigating health insurance options can be complex, so consider seeking guidance from insurance agents, Medicare or Medicaid representatives, ACA consultants, or financial advisors. They can help you understand your options, make informed decisions, and avoid potential pitfalls.

Timing of changes to your insurance plan

Timing is a critical aspect when it comes to changes in your insurance plan, especially when triggered by a qualifying life event. Here is a detailed overview of the timing considerations:

Understanding the Special Enrollment Period (SEP)

A qualifying life event, such as turning 65, allows you to take advantage of a Special Enrollment Period (SEP). This is a window of time outside of the regular annual open enrollment period when you can make changes to your insurance plan. The SEP is designed to ensure that significant life changes don't leave you without essential health insurance coverage.

Timing of the SEP

The timing of the SEP can vary, but in most cases, you will have a window of 60 days to make changes to your insurance plan. This window typically starts from the date of the qualifying life event and can be either 60 days before or after the event. Some states may offer a shorter or more extended window, so it is essential to check the specific rules in your state.

Documentation Requirements

To utilize the SEP, you will need to provide documentation of the qualifying life event. This could include birth certificates, adoption records, marriage licenses, divorce papers, death certificates, rental agreements, mortgage documents, letters from employers, or COBRA termination notices. It is crucial to submit this documentation within the specified timeframe, usually within 30 to 60 days, to avoid losing your eligibility for the special enrollment period.

Changes in Coverage

Once you have enrolled in a new plan or made changes to your existing plan during the SEP, the new coverage will typically take effect retroactively from the date of the qualifying life event. For example, if you enrolled in a new plan during the SEP due to the birth of a child, the coverage for the child would be effective from their date of birth.

Medicare Enrollment Timing

When it comes to Medicare enrollment triggered by turning 65, your initial enrollment period begins three months before your 65th birthday and ends three months after your birthday. This timing is important to ensure you have continuous coverage as you transition into Medicare.

Planning Ahead

While some life events, like turning 65, can be anticipated, others may occur unexpectedly. It is beneficial to understand the concept of qualifying life events and how they impact your insurance options. By staying informed, you can be prepared to make timely changes to your insurance plan when necessary, ensuring you have the coverage you need during significant life transitions.

Documentation required for a qualifying life event

A qualifying life event is a life-changing situation that impacts your health insurance. It allows you to change your health plan outside of the annual enrollment period.

The documentation you need to provide depends on the type of qualifying life event you've experienced. Here is a list of common documents that you may need:

• Marriage or Divorce: Marriage certificate, divorce papers, or legal separation papers.
• Having a Baby or Adopting a Child: Official birth certificate, notice of legal adoption, hospital certificate with footprints, hospital discharge papers, newborn's hospital wristband, or crib tag from the hospital.
• Death of a Dependent: Legal certified death certificate for the dependent.
• Loss of Eligibility for Health Benefits: Coverage termination notice from the relevant government agency, HIPPA certificate of credible coverage, or a signed letter on company letterhead confirming coverage termination and the date it ended.
• Gaining Eligibility for Health Benefits: Offer letter or payroll stub from a spouse or domestic partner showing that you are now eligible for benefits.
• Turning 26 and Aging Off a Parent's Plan: Proof of prior qualifying health coverage within the last 60 days.
• Moving to a New Area: Proof of prior qualifying health coverage within the last 60 days, along with a lease or rental agreement, mortgage deed, driver's license or state identification card showing the new address, postal change of address confirmation, official school documentation, a letter from an employer confirming the move, or relevant immigration documents if you've moved to the US from another country.

It is important to note that the required documentation may vary depending on your specific situation and health insurance provider. Always check with your health insurance provider to confirm the exact documents needed for your qualifying life event.

Losing essential health care benefits

Understand Essential Health Benefits

Essential health benefits are a set of services that health insurance plans must cover under the Affordable Care Act. These typically include outpatient services, emergency room care, hospitalisation, maternity and newborn care, mental health services, prescription drugs, rehabilitative services, preventive care, and pediatric vision and dental care. These benefits ensure comprehensive coverage and protect patients from unexpected costs.

Explore Options for Continued Coverage

If you have lost your essential health care benefits, there are several options to consider:

• Special Enrollment Period (SEP): Losing essential health care benefits is considered a qualifying life event, allowing you to enroll in a new health insurance plan or make changes to your existing plan outside the annual open enrollment period. You usually have a window of 60 days before and/or after the qualifying event to make changes.
• Join a Family Member's Policy: If your spouse or parents have a health insurance policy, you may be able to join their plan, especially if you are under 26. This option often involves additional premium costs for your family member but is generally more affordable than other alternatives.
• Medicaid: Depending on your state and income level, you may be eligible for Medicaid, a joint federal and state program that offers comprehensive health insurance to low-income individuals. Check your state's eligibility requirements and income limits to determine if you qualify.
• COBRA Health Coverage: The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue your employer's group insurance plan for a limited time after job loss or other life events. You must elect COBRA coverage within 60 days of losing insurance, and it can be extended for up to 18 months.
• Short-Term Health Insurance: If other options are not available, consider purchasing short-term health insurance directly from a health insurance company or broker. These plans are typically more affordable but may have limitations, such as not covering pre-existing conditions or essential health benefits.

Take Action Promptly

It is important to act quickly when exploring your options for continued coverage. Many of the alternatives presented above have time-limited deadlines, typically ranging from 30 to 60 days from the loss of coverage. Gather the necessary documents, such as proof of job and insurance loss, and contact your insurance provider or relevant government programs to understand your specific options and next steps.

Frequently asked questions