Do I need to enroll in Medicare if I have ACA marketplace insurance?

AARP

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En español

Published February 16, 2023

Yes. If you have health insurance from the Affordable Care Act (ACA) health insurance marketplace rather than from an employer, you’ll need to sign up for Medicare Part A and Part B when you’re eligible at age 65.

Sign up during your initial enrollment period, which begins three months before the month you turn 65 and ends three months after your birthday month. Otherwise, you’ll have to wait to enroll during the next general enrollment period Jan. 1 to March 31. You may also have to pay a late enrollment penalty.

While you don’t have to drop your ACA health insurance to enroll in Medicare, most people do. For those who qualify for premium-free Medicare Part A, your marketplace insurance premium subsidies end after you’re eligible for Part A at age 65.

If you choose to keep the marketplace coverage, you’ll have to pay full price because you’ll no longer be eligible for subsidies based on your income. If the marketplace doesn’t adjust your premiums right away, you may have to pay back the extra subsidies when you file your federal income tax return.

These premium subsidies, which are tax credits given in advance to help with the cost of ACA marketplace insurance, were expanded significantly in 2021, and the Inflation Reduction Act extended this premium assistance through 2025.

Even though you can keep your marketplace coverage after you enroll in Medicare, you can’t get a new marketplace policy at that point. In fact, it’s against the law for someone who knows you have Medicare to sell you a marketplace health insurance plan.

If you want extra coverage to help pay Medicare’s deductibles and copayments, you have a couple of options. You can buy a Medicare supplement policy, better known as Medigap, or you can choose to get your medical and drug coverage from a private Medicare Advantage plan, which must provide the same coverage as Medicare Part A and Part B but has different deductibles and copayments.

One caveat: You must sign up for Medicare Part A and Part B before you can get a Medigap policy or a Medicare Advantage plan.

What happens if I have to pay a premium for Part A?

The rules are different for those who aren’t eligible for premium-free Medicare Part A. If you or your spouse worked for at least 40 calendar quarters, the equivalent of 10 years, and had Medicare taxes deducted from your pay, you won’t pay premiums for Part A.

If you or your spouse paid Medicare taxes for 30 to 39 quarters, you’ll have to pay Part A premiums of $278 a month in 2023, an amount often less than the least expensive marketplace premiums without a subsidy. That amount increases to $506 a month if you’ve worked fewer than 30 quarters.

People who don’t qualify for premium-free Medicare Part A can opt to keep their ACA marketplace health insurance rather than sign up for Medicare at age 65. You’ll continue to receive subsidies to help pay the premiums, but they end when you enroll in Medicare.

Think carefully before making this decision: If you decide to sign up for Medicare later, you may need to wait until the general enrollment period and have to pay a late enrollment penalty for Part A in addition to a Part B late penalty.

How do I switch from ACA coverage to Medicare?

You need to take a few steps when ending your ACA marketplace health insurance and enrolling in Medicare. First, you need to make sure you have no gap between the end of your marketplace coverage and the beginning of Medicare.

The steps are different for those ending sole coverage vs. family coverage. Visit Healthcare.gov for step-by-step instructions on how to cancel a marketplace health insurance plan. If you live in one of the 17 states and the District of Columbia that run their own ACA health insurance marketplaces, visit your state’s site.

• Ending coverage for everyone on the plan (single or multiple household members).

Log in to your marketplace account at Healthcare.gov and click Start a new application or update an existing one. Then click your name at the top right of the screen and select My applications & coverage.

Select your application under Your existing applications and on the left choose My Plans & Programs. At the bottom, click on the red End (terminate) all coverage button. Select the date you want to end your ACA plan, click the confirmation box, then click Terminate Coverage.

This could take effect as soon as the day you cancel coverage, or you can set the Marketplace coverage end date to a future date, such as the day you know your Medicare coverage starts.

• Ending your coverage but keeping it for others.

When you turn 65 and enroll in Medicare, your younger spouse or other family members will need to remain on a marketplace plan. In this case, contact the marketplace call center to make sure you select your final date for coverage while their insurance continues.

You can also do this online by logging in to your marketplace account; however, you can’t be the household contact for the account. Under Your existing applications click Report a life change. This will open a menu on the left near the bottom of the resulting page. Then choose Report a change in my household’s income, size or other information and follow the prompts.

Specify household members keeping the marketplace coverage and remove each person no longer using it separately under Who Needs Coverage? Continue clicking through the application. When asked about household information, list the members of the tax household, which may include people you just removed from coverage. Update information for your household to determine if those continuing ACA coverage are eligible for subsidies.

Keep in mind

Medicare helps pay for many medical expenses after you turn 65. But it still has some costs, such as Part B premiums — $164.90 a month in 2023, and more for high earners — and deductibles and copayments or coinsurance for Medicare Part A and Part B.

If you have low income and assets, you may qualify for a Medicare Savings Program to help with the premiums and out-of-pocket costs.

Updated February 16, 2023

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