If you're covered through the Affordable Care Act when you turn 65, what happens? Does Medicare count as ACA insurance?
Original Medicare and the Affordable Care Act (ACA) are very different. The ACA, also known as Obamacare, is a law that sets guidelines for what private health insurance plans are required to cover. These plans are available through the Health Insurance Marketplace, and the ACA was designed to help make health care coverage more accessible.
In some cases, “ACA insurance” is used to describe plans available on the Marketplace.
On the other hand, Medicare is a federal health program designed for those who are age 65 or older or who have certain disabilities.
Learn more about the differences between Medicare and the ACA, as well as information about the Marketplace, how it and Medicare work, and how to choose one over the other.
Are Medicare and the ACA the same thing?
The ACA isn’t technically a health insurance plan, but instead is a law that governs private health insurance plans and outlines what they must cover and how much they can charge. These plans are typically available to all Americans regardless of age or disability.
Medicare, however, is not a law but instead is a government-sponsored health plan you can enroll in when you’re eligible. Original Medicare is made up of Part A (hospital insurance) and Part B (medical insurance).
Medicare vs. the ACA Marketplace plans
The primary difference between Medicare and the ACA Marketplace is that Medicare is provided through the federal government for specific beneficiaries who qualify, while the ACA refers to private health plans available through the Marketplace to anyone.
Other differences include:
Most people who are eligible for Medicare qualify for premium-free Part A. Or, if you must pay a premium, you’ll owe either $278 or $506 (in 2023) depending on how long you or your spouse worked and paid Medicare taxes. The Part A deductible is $1,600.
Part B has a monthly premium of $164.90 and a $226 deductible. Then, Medicare will typically cover 80% of the costs of services or supplies and you’ll owe the other 20%.
Medicare Advantage (Part C) plans can have different costs, but in general, Medicare’s costs are similar for all beneficiaries.
On the other hand, Marketplace plans can have significantly different costs based on the plan, including premiums, deductibles, and other out-of-pocket costs.
In order to be eligible for Medicare, you must be 65 or older, have a qualifying disability, or have end-stage renal disease (ESRD). Your initial enrollment period starts three months before you turn 65 and ends three months after. Or, you’re automatically enrolled if you’re already receiving Social Security benefits.
Marketplace plans have much less strict eligibility, typically only requiring you to live in the U.S. and be a U.S. citizen.
Because of the ACA, Marketplace plans must cover certain key areas including (but not limited to) ambulatory services, emergency services and hospitalization, lab services, mental health services, preventive services, and prescription drugs.
Alternatively, Medicare Part A covers inpatient care and hospital stays while Part B covers outpatient treatment and services and durable medical equipment (DME). Prescription drugs, vision, dental, and hearing services are not covered by Original Medicare.
Keep in mind that because Marketplace plans are provided by private insurance companies, each plan has different costs and coverage, and you must do your research to ensure the plan offers the benefits you need and fits into your budget.
Can I have Medicare and ACA?
If you have Marketplace coverage, you can keep it until your Medicare coverage begins. However, you cannot have both Medicare and Marketplace coverage. It’s against the law for someone who knows you have Medicare to sell you a Marketplace plan, even if you only have Part A or Part B.
However, if you want coverage to add to Original Medicare, consider a Medicare Supplement Insurance plan (Medigap) or a Medicare Advantage (Part C) plan. These may provide additional benefits or cost savings.
Learn more with our Ultimate Guide to Medigap.
How to change from the Marketplace to Medicare
It’s always a good idea to sign up for Medicare when you’re first eligible (typically at age 65) even if you have coverage through the Marketplace. This will help you avoid a gap in coverage and late enrollment penalties.
Note that once you’re eligible for Part A:
- Your Marketplace plan may automatically not renew your coverage at the end of the year, meaning you’d have a gap in your coverage beginning January 1 of the following year.
- You won’t qualify for help from the Marketplace to pay your premiums or other medical costs, and if you do keep getting help, you may have to pay back all or part of it when you file your federal income taxes.
After signing up for Medicare, you must drop your Marketplace coverage the day before your Medicare coverage starts. This will ensure you don’t have an overlap in coverage. Contact your Marketplace plan directly to do this.
Can I choose Marketplace coverage instead of Medicare?
In most cases, you cannot choose Marketplace coverage if you’re eligible for Medicare. However, there are a few exceptions:
- If you have to pay a Part A premium, you may consider Marketplace coverage instead.
- If you have ESRD and haven’t signed up for Medicare, you can get a Marketplace plan instead. Before doing this, make sure you understand Medicare’s coverage for those with ESRD.
If your employment provided health insurance for your spouse or any dependents who do not yet qualify for Medicare, a Marketplace plan can cover their needs until they're eligible.
Remember, carefully compare Medicare costs and coverage against Marketplace plans. Also remember if you don’t sign up for Medicare when you’re first eligible, you may have to wait to enroll and/or pay late enrollment penalties.
If the main reason you want to stay with your Marketplace plan is its broader coverage for items like prescriptions, dental, and vision, you might want to look at a Medicare Advantage plan. Also known as Medicare Part C, these plans cover everything Original Medicare does, but most offer additional benefits as well.
You can compare Medicare costs and benefits with our Find a Plan tool. Or, call us toll-free at 888-992-0738 and a licensed Medicare agent will answer your questions and help you choose the right type of coverage for your unique needs and budget.