Q. My parents moved to the United States last year. They have been using a travel health insurance policy, but it will expire soon. They are both 68 years old, but do not qualify for Medicare because they have not lived in the U.S. long enough. Can they get individual health insurance in the exchange?
A: Yes. Since your parents are not eligible for Medicare, they can purchase a private plan in the exchange (marketplace), and can receive cost-sharing reductions and premium subsidies if they are eligible based on income.
Section 1882 (d)(3) of the Social Security Act states that it is unlawful to sell private health insurance to a person who is entitled to Medicare, but that rule is based only on Medicare eligibility, not age. And as your question demonstrates, not everyone who is 65 or older is eligible for Medicare. [For additional information, this FAQ sheet from CMS is helpful in understanding the rules regarding individual market coverage and Medicare.]
Individual-market plans no longer drop enrollees at age 65
Before the Affordable Care Act (Obamacare), age was a limiting factor for eligibility in the individual market, just like pre-existing conditions. Insurers typically only allowed people up to about 64.5 years old to enroll in coverage, and coverage was terminated for members who turned 65. But that is no longer the case. For applicants 65 or older, the exchange may require a Medicare application appeal in order to be certain that Medicare is not an option. Assuming that’s the case, the application will then be processed just as it would for a person under age 65.
The ACA limits premiums for older applicants to three times as much as premiums for younger applicants. So eligible enrollees age 65 and older are charged no more than three times as much as applicants in their 20s. And again, premium subsidies are available, depending on income, for people of any age.
Be aware that most travel insurance policies do not qualify as minimum essential coverage under the ACA. As such, their expiration is not considered a qualifying event that triggers a special open enrollment. So your parents will need to make sure that they enroll in a permanent plan during the annual open enrollment period.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.