The CMS says some Medicare beneficiaries are receiving tax credits to purchase insurance through the Affordable Care Act marketplace. The agency is warning them to cancel their exchange coverage immediately and pay back the credit they've received.
The majority of individuals with Medicare coverage are considered to have minimum essential coverage as outlined in the Affordable Care Act and as a result are not eligible for subsidies to pay for a marketplace plan. The exception is the 1% of program enrollees who have only Medicare Part B coverage.
It's unclear how many beneficiaries are receiving the notices (PDF). Acting CMS Administrator Andy Slavitt said in testimony during a congressional hearing Wednesday that it was only a “small number of consumers.”
Consumers can enroll in both marketplace and Medicare coverage, but they have to pay the full premium for marketplace coverage. Of the more than 9 million people who selected a plan on HealthCare.gov during the last enrollment period, just under 100,000 were 65 or older, according to the HHS.
But news of the subsidy mistake comes a month after the CMS announced it was stepping up enforcement action on Medicaid beneficiaries dually enrolled in the marketplace by voiding the enrollee's tax credits if they didn't end their marketplace coverage on their own after being warned. This population was warned twice.
The agency will not follow the same steps for the Medicare enrollees since it's the first time these individuals are being warned. The CMS has been sending emails to marketplace consumers who will turn 65 to remind them of the tax liability they may face if they enrolled in both coverage options. The agency provided instructions on how and when to end a marketplace plan and join Medicare.