On March 20, CMS announced a long-awaited upgrade: Healthcare.gov and all approved EDE pathways will now allow members to report their Medicare effective date. Talking with the Marketplace call center is no longer required.
Instead, consumers and agents can use the "Report a Life Change" feature on their chosen platform to report the Medicare start date. However, everyone should be aware of what happens next:
If the person aging into Medicare is listed as a dependent, their Marketplace coverage will end the day before their Medicare coverage begins. The remainder of the contract will continue their coverage, and no one should experience any coverage gaps.
If the person aging into Medicare is the subscriber, the Marketplace will end the entire contract on the day before Medicare coverage begins.
The system will automatically re-enroll the remaining members in the same plan. This change alone does not allow for a Special Enrollment Period, so members must remain in that plan unless they qualify for an SEP for a different reason at the same time.
But, there is an old, hidden danger here.
Since there is a new subscriber, the carrier will create a new contract and issue a new policy on that date. That means a family's cost-sharing accumulators (think deductibles and out-of-pocket maximums) may reset at the insurance company's discretion.
To prevent this, the Marketplace recommends selecting a younger subscriber during the OEP before the older subscriber turns 65. Agents and consumers may ask insurers to carry the accumulators over to the new contract, but there is no guarantee it will happen.
To be clear, this cost-accumulator reset is not a new possibility. It's been around at least as long as the Marketplace has. However, it may take a new spotlight in conversations with your clients and prospects as they navigate their Marketplace options.
When a Marketplace contract has someone nearing Medicare eligibility, agents should be thoughtful about how they write the application. Careful consideration upfront can prevent some seriously uncomfortable decisions down the road.