Q: We would like our 80-year-old grandmother to come to the USA and live with us so we can take care of her. How do we get health insurance for her?
A: Prior to 2014, there were few options available for someone in your grandmother’s position. Individual health insurance generally wasn’t available to people over age 64, and Medicare and Medicaid have five-year waiting periods for legal immigrants. (A few states have relaxed guidelines when it comes to Medicaid. See below.)
Seniors were able to purchase travel insurance, but it generally doesn’t cover pre-existing conditions, and new coverage must be purchased periodically when the existing one expires, since they’re sold to cover a limited time frame.
But thanks to the ACA, seniors who aren’t eligible for Medicare—including immigrants—can purchase guaranteed-issue private health insurance in the exchanges, and can receive premium tax credits to offset the cost if their income doesn’t exceed 400 percent of the poverty level and they don’t qualify for certain other government- or employer-sponsored coverage.
The option to purchase coverage in the exchange with a premium subsidy continues even after the person has been in the U.S. for five years and becomes eligible to purchase Medicare coverage (see questions A.6 and A.8 on this guidance from CMS). People who are eligible for premium-free Medicare Part A (because they have worked in the U.S. for at least 10 years) are NOT eligible to receive premium subsidies in the exchange. But that restriction doesn’t apply to people who would have to pay for Medicare Part A.
Medicare for immigrants: A 5-year waiting period before coverage can be purchased
If your grandmother was a U.S. citizen or had been a lawfully-present U.S. resident for more than five years, she could expect coverage from Medicare, as most Americans do at age 65. People who have paid into the system via payroll taxes—their own or a spouse’s—don’t have to pay a premium for Part A. This encompasses the vast majority of Americans, although there’s also an option for people to purchase Medicare Part A (with premiums of up to $437/month in 2019) if the enrollee doesn’t have enough work history to qualify for premium-free Medicare Part A.
But people who have not been in the U.S. for five years are not eligible to enroll in Medicare. Obviously, your grandmother hasn’t been paying Medicare payroll taxes in the U.S., which means she won’t be eligible for premium-free Medicare Part A. But federal regulations stipulate that she needs to have been lawfully admitted for permanent residence and have resided continually in the country for five years before she’s eligible to enroll—even with premiums.
Once she’s been lawfully present in the U.S. for five years, she’ll be eligible to enroll in Medicare if she wants to, but with premiums for Part A (and Part B, which all enrollees pay, regardless of their work history). Assuming she doesn’t establish a work history in the US and ends up having to pay Medicare Part A premiums forever, she would have the option to either enroll in Medicare (paying premiums for Part A and Part B), or maintain her individual market coverage through the exchange. She would still be allowed to receive premium subsidies, as clarified in the chart on Question A.8 in the CMS guidance.
But the details in Question A.9 are important here too: If she opts to keep her individual market coverage even after she has the opportunity to buy into Medicare (ie, once she’s been in the US for five years), she would then be subject to the late enrollment penalties if she ever decides to enroll in Medicare at a later date. And she would also be limited to enrolling only during the general enrollment period (the first quarter of each year), with coverage effective in July.
So for example, if she were to gain a substantial income later in life and no longer qualify for premium subsidies in the exchange, the plan she has in the individual market might end up being more expensive than Medicare. But she would have to wait until the annual general enrollment period to switch, and she would have to pay the late enrollment penalty for Medicare Part A and Part B, based on the amount of time since she was first eligible to enroll (ie, when she had been in the US for five years) to the time that she actually enrolled.
Medicaid for immigrants
A 1996 welfare reform law stipulates that immigrants must have five years of legal U.S. residency to become eligible for federal benefits such as Medicaid. The rules were relaxed somewhat in 2009, under the Children’s Health Insurance Program Reauthorization Act (CHIPRA), to allow states the option to provide federally-funded Medicaid and CHIP benefits to pregnant women and children, even if they have not resided in the U.S. for five years, and well over half the states have opted to do so. But some states have opted to also use state funds to provide coverage to additional recent immigrant populations.
According to HHS data (see figure 4), as of 2011, 15 states allowed the use of state funds to provide Medicaid benefits for qualified immigrants who would otherwise be ineligible because of their immigration status – including the fact that they had resided in the United States for less than five years (note that New Jersey is included in HHS’ list of states that provide state-funded Medicaid coverage to recent immigrants, but New Jersey has changed that rule and no longer does so). But as of 2016, an Urban Institute report indicated that only six states and DC were funding public health benefits for immigrants who had not yet been in the U.S. for five years.
If your grandmother has a limited income, don’t rule out Medicaid as an option until you check with your state Medicaid office. But be aware that it’s unlikely that she’ll be eligible for Medicaid benefits, as few states provide Medicaid coverage for elderly recent immigrants.
Immigrants and individual health insurance
This is the area that has changed the most for recent immigrants who are 65 or older. Prior to 2014, obtaining individual health insurance for your grandmother on the private market would have been difficult or impossible, since very few major insurers were interested in selling coverage to people over 65 because of their high health risks.
But the Affordable Care Act has changed that. Health history is no longer used to determine eligibility or premiums in the individual market, and private carriers now offer coverage to people who are 65 or older, as long as they are not enrolled in Medicare. (It’s against the law to sell individual coverage to someone who is enrolled in Medicare or eligible for premium-free Medicare Part A, but recent immigrants are not eligible for Medicare at all.)
The ACA also stipulates that older enrollees cannot be charged more than three times the premiums that younger enrollees pay. Since most individual market enrollees are 64 or younger, this rule typically means that a 64-year-old will pay no more than three times as much as a 21-year-old for the same coverage. But if an 80-year-old enrolls in that plan, her premium will be the same as a 64-year-old.
So for the first five years that your grandmother lives in the United States (during the waiting period for Medicare), she’ll be able to purchase individual health insurance through the exchange in the state where she lives. If her income doesn’t exceed 400 percent of the poverty level, she’ll be eligible for subsidies to lower the cost of the premiums, and if her income is doesn’t exceed 250 percent of the poverty level, she’ll also be eligible for cost-sharing reductions if she buys a silver plan.
For American citizens and immigrants who have been in the U.S. for at least five years, there’s also a lower income threshold in order to be eligible for premium subsidies and cost-sharing reductions in the exchange. The idea is that people below that threshold are eligible for Medicaid instead (although that hasn’t been the case in 16 states where Medicaid expansion has been rejected, leaving a coverage gap). But that lower income threshold doesn’t apply to recent immigrants, as they aren’t generally eligible for Medicaid coverage. So even with income below the poverty level, a recent immigrant who is lawfully present in the U.S. can obtain a plan in the exchange with premium subsidies. As of 2018, a recent immigrant with income below the poverty level would have to pay 2.01 percent of her income (after subsidies) for the second-lowest-cost silver plan in the exchange.
Once your grandmother has been lawfully residing in the U.S. for five years, she’ll be eligible to purchase Medicare. But she’ll also have the option to continue to buy coverage in the exchange instead, and she’ll be able to continue to receive a premium subsidy (and cost-sharing reduction, if applicable) through the exchange if she’s eligible based on her income.
In addition to standard individual health insurance, immigrants will find no shortage of links to special “inbound-immigrant” policies by doing a simple web search such as “immigrant health insurance” or “health insurance options for immigrants.”
These policies provide health insurance for recent immigrants for a limited period of time – usually five years or less. The policies may focus on emergency benefits and may have a maximum benefit of $50,000 or $100,000 or daily limits on expenses such as hospital stays.
Buyers should definitely be on the lookout for exclusions, including not only pre-existing conditions, but a long list of exams and treatments one might otherwise expect under individual coverage.
And it’s important to be aware that travel insurance, limited benefit plans, and short-term insurance are not considered minimum essential coverage under the ACA. Although there is no longer an individual mandate penalty for not having minimum essential coverage, there are still prior coverage rules for several types of special enrollment periods, with a requirement that a person must have had minimum essential coverage in place prior to the qualifying event in order to have a special enrollment period triggered by the qualifying event (you can learn more about the specifics in our guide to special enrollment periods)
In most cases, it’s probably better to purchase comprehensive health insurance through the exchange, especially since such coverage is now available regardless of medical history, covers pre-existing conditions, and can be obtained with subsidies if the enrollee’s income doesn’t exceed 400 percent of the poverty level.
Even if you have health insurance coverage through your employer, you can’t add your grandmother as a dependent. However, some families that own and operate a small business actually hire their older family members as employees so they can offer them health benefits.
This option might make sense if you have your own business, but rest assured that coverage for your grandmother is now available in the individual market, making it much easier than it used to be for elderly recent immigrants to obtain health insurance when they arrive in the U.S.
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.