Going From an Affordable Care Act (ACA) to Medicare: What Do I Need to Know?

The Affordable Care Act (ACA), also known as Obamacare for former President Barack Obama, was enacted on March 23, 2010. Its purpose is to help individuals who normally cannot afford individual healthcare coverage.¹ The federal government set up a Health Insurance Marketplace plan which provides health plan shopping and enrollment services through websites, call centers, and in-person help.²

If you have been with an ACA Marketplace plan and you are nearing retirement age, you may be eligible for Medicare health coverage. Let’s review the facts regarding transitioning from ACA to Medicare.

Can I keep my Marketplace plan?

When you reach Medicare eligibility, you may no longer be able stay on your Marketplace plan. You cannot have both the Marketplace plan and Medicare. If you did not work enough to be eligible for premium-free Medicare, then you are allowed to stay on your Marketplace plan, if you desire.  Below are reasons why moving to Medicare makes sense:³

• On the Marketplace plan, at 65, you may pay full premium prices instead of a discounted price.
• If you have Marketplace coverage, you may receive premium tax credits; At age 65, you may lose those if you are eligible for Medicare.⁴
• Your out-of-pocket costs may not be discounted, depending on your household size and income.
• If you have other family members on a Marketplace plan, you can keep them on the plan and only end your coverage.
• Marketplace plans are typically higher in premiums than Medicare premiums.

Converting from Marketplace to Medicare

Most people enroll in Medicare when they become eligible, during the 7-month initial enrollment period. If you miss your initial enrollment period, you may end up waiting longer to enroll and pay a late enrollment penalty fee. This penalty fee increases the longer you wait, and you pay the fee throughout your Medicare coverage.

The initial enrollment is seven months: three months before you turn 65, the month you were born (your birthday month), and three months after you turn 65.⁵

Terminating your ACA Marketplace plan

In the past, before ACA was established, private insurance companies automatically terminated your health insurance when you reached retirement age. With ACA, you are responsible for terminating your Marketplace insurance policy.

If you are terminating coverage for everyone on Marketplace coverage, you should contact the Marketplace Call Center and request the change. The termination can be immediate, or you can set an end date of coverage.⁶

If only one person is ending the Marketplace coverage, call the Marketplace call center and end the coverage for the day you want the to end on this individual.⁷ The Marketplace call center is found on HealthCare.gov.

Once you enroll in Medicare Part A and Part B, be careful you don’t terminate your Marketplace plan until you know when your Medicare coverage starts. You will not be able to re-enroll in the Marketplace plan until the next annual enrollment period.

Enrolling in a Medicare Supplement plan

Medicare Supplement insurance is additional health insurance you may purchase for defraying some of the costs that Original Medicare does not cover. These costs may be coinsurance and hospital costs. During the initial enrollment period, you have a Guaranteed Issue Right to buy a Medicare Supplement policy. This means you cannot be charged more premium or refused an insurance policy due to a pre-existing condition.

Sources:

1. https://www.ehealthinsurance.com/resources/affordable-care-act/history-timeline-affordable-care-act-aca
2. https://www.healthcare.gov/glossary/health-insurance-marketplace-glossary/.
3. https://www.healthcare.gov/medicare/changing-from-marketplace-to-medicare/
4. https://www.irs.gov/affordable-care-act/individuals-and-families/premium-tax-credit-claiming-the-credit-and-reconciling-advance-credit-payments
5. https://www.healthcare.gov/taxes/
6. https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
7. https://www.healthcare.gov/subscribe
8. https://www.healthcare.gov/how-to-cancel-a-marketplace-plan/