Can A Medicare Beneficiary Obtain Coverage Under ACA Compliant Major Medical Plan?

April 21, 2014

This was a question raised recently within the NAMSAP (National Association of MSA Professionals) listserv.   While it seemed simple and straightforward, it generated so much interest from so many within our organization, I thought it worthy of a blog post to communicate both dialogue and  dilemma .

Setting the Stage

n 2011, a medical liability claim was filed when a first time mom lost her child 19 weeks into pregnancy due to a missed diagnosis of sepsis.  Not only did she lose her child, she also lost both legs below the knees, nine of her ten fingertips and now has only 25% kidney function.  In spite of the horrific outcome resulting from the misdiagnosis, the woman has a marvelous attitude about life.  Having received SSDI benefits for almost 24 months, she will become Medicare eligible in the next six months.

As a result of her pending Medicare beneficiary status, plaintiff attorney requested an MSA allocation.   The MSA was finalized with total future medical and pharmacy costs projected at approximately $1,000,000.  Settlement negotiations remain ongoing.  At this point, however, defense counsel believes that an MSA is not necessary noting that claimant could easily obtain an ACA compliant, standalone major medical policy during an open enrollment period.

If an ACA compliant policy is an appropriate alternative to an MSA to address future medical treatment, then what’s to stop all injured claimants that are Medicare beneficiaries, whether involved in a workers’ compensation liability claim, from doing the same, effectively ignoring the MSP statute’s legal obligation to consider and protect Medicare’s future interests?  The question at hand….

If an injured claimant can obtain ACA coverage at any time, before or after Medicare eligibility, why bother with a MSA? 

Can A Medicare Beneficiary Obtain ACA Coverage?

The short answer, per 45 CFR 148.103, is that ACA policies can only be provided to “eligible individuals”, and a person  who is eligible for Medicare is not eligible for coverage under the ACA.

From the ACA FAQ link, we find the following (

Does Medicare Meet ObamaCare’s requirement that all Americans have health insurance?
If you have Medicare Part A (Hospital Insurance) or Medicare Part C (Medicare Advantage, you’re considered covered and won’t need a Marketplace plan. Having Medicare Part B (Medical Insurance) alone doesn’t meet this requirement.

Can I get a Marketplace Plan in Addition to Medicare?
No. It’s against the law for someone who knows that you have Medicare to sell you a Marketplace plan. This is true even if you have only Part A or only Part B.

If you want the technical version, go to for specific guidance.  And in Medicare’s own words, the relationship between ACA and Medicare is explained

MSP Compliance Within An ACA Environment… Back to the Beginning 

While the answer appears to be simple in this case,  the fact that such a recommendation was made by an attorney should raise a flag to all who live daily in the MSP compliance arena.  With so many unknowns surrounding the ACA, “Will a healthier workforce yield fewer claims and a faster return to work?  Will the ACA create cost shifting from workers’ compensation to group health?   Will the scarcity of primary care physicians impede carriers’ ability to deny questionable claims as quickly as possible?”, miscommunication and confusion are inevitable.  If for no other reason than clarity for ourselves and our clients, this is worthy of our attention.

How do we overlay what we’ve learned in recent months about the ACA with our understanding of the mandates imposed by the MSP statute so that we can educate, advocate and set expectations for our clients?  The first step, I believe, is to go back to the the beginning, and to remind ourselves of the intent of the MSP statute… to protect Medicare from making payments it shouldn’t make, regardless of whether payment represents past, present or future exposure.

The MSP statute mandates that:

  • Payments made ‘conditionally’ by Medicare for treatment for a workers’ compensation, liability, no-fault claim that was reasonably be expected to be paid by an entity other than Medicare be recovered;
  • Medicare’s interests be considered and protected when settling a claim when any portion of the settlement dollars is intended to cover future medical treatment for a current or pending (within 30 months) Medicare beneficiary;
  • All Responsible Reporting Entities (payers) report, through MMSEA Section 111 Mandatory Insurer Reporting, the total settlement amount when a TPOC event (Total Payment Obligation to Claimant) occurs.

These are the pillars of MSP compliance, and represent the filters we should use each time we contemplate settlement  in a case that involves a Medicare beneficiary.  Does the action being proposed adequately protect Medicare’s past, present and future interests?

In this situation, we find ourselves at a disadvantage as we know little from the ACA as to its prospective relationship to the non-group health environment.  What we do know, however, and the looming danger, is that the ACA guarantees no exclusions for pre-existing conditions and no lifetime limit for medical care.  Its boundaries, therefore, are non-existent.

How Will the Government Respond?

With limitless dollars for medical treatment under an ACA plan, a reasonable expectation is that the US government will attempt to recover each and every penny when treatment of an ICD9 code can be linked to a workers’ compensation, liability or no-fault claim.  As such, it seems logical that an MSA is the only way to ensure that Medicare’s past, present and future interests are appropriately protected.

To shift the burden to a health exchange supports neither the recovery of past payments nor the means to provide future protection for those government payments made on behalf of the Medicare beneficiary (Medicare Part  A & B).  To complicate the equation even further, if there is a third party Advantage C plan in the picture, those commercial dollars that partially fund the care are also at risk.  As such, the commercial carriers will seek every available dollar on a case such as this where lifetime exposure exists.

Today’s Conclusion

The introduction of ACA within the framework of MSP compliance is certainly an issue that requires further research, and one I’m pleased to see NAMSAP follow.  At this point, unless something comes to light to dispute the information included above, it would appear that ACA plans and Medicare will exist mutually exclusive of each other.  As such, to comply with the intent of the MSP statute, any settlement pursued for a Medicare beneficiary, regardless of total settlement dollars or the availability of ACA plans, should include an MSA.

ACA policies can only be provided to “eligible individuals”. 45 CFR 148.103 provides that someone who is eligible for Medicare is not eligible for coverage under the ACA.