The interconnections among Affordable Care Act, Medicare, and Medical Supplement Insurance

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The Affordable Care Act as envisioned by the Obama administration wants universal healthcare coverage for Americans. The law then requires all citizens to have health insurance. Medicare subscribers are then already considered compliant and need not take to the Health Insurance Marketplace to avail of a policy.

There are some, however, who are enrolled only in Medicare Part B, or Medical Insurance. Generally, ACA or Obamacare doesn’t affect Medical Supplement Insurance or Medigap policies, but the aforementioned scenario presents a requirement problem for the availment of a Medigap policy. For one, a Medigap policy requires a subscription to both Medicare part A (hospital insurance) and Medicare Part B (medical insurance).

And as it is impossible to have Medicare Supplement Insurance without Medicare subscription, having a Medigap policy will always provide minimum essential coverage under Obamacare. Obamacare does not prevent employers and health insurance companies providing group insurance from denying health coverage for subscribers with pre-existing conditions. However, the Open Enrollment period for the availment of Medigap policies guarantees coverage for all subscribers of Medicare, regardless of their health conditions.

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The Affordable Care Act also imposes a late-enrollment penalty for subscribers to only Medicare Part B, and are belatedly subscribing to Medicare Part A.

It is also important to note that Medigap policies are not part of the Health Insurance Marketplace. Part D drug plans of Medicare are also exempt from this. The ACA provides for subsidies for drugs and is expected to drive down out of pocket costs for drugs.

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