What happens if I have ACA insurance and Medicare?

ACA and Other Insurance
Written By Jerdon Johnston

How does ACA insurance coordinate with Medicare if I’m eligible for both?

If you are eligible for Medicare, you cannot keep your ACA health insurance plan. Once you qualify for Medicare, your ACA insurance will no longer coordinate with or serve as your primary coverage. Instead, Medicare will take over as your primary insurance, and you will need to transition from your ACA plan to Medicare. Here’s how the transition works and what you need to know about how ACA insurance interacts with Medicare.

1. Transitioning From ACA Insurance to Medicare

If you become eligible for Medicare, usually at age 65 or through certain disabilities, you will need to transition to Medicare for your health coverage. The Affordable Care Act (ACA) does not coordinate with Medicare, and here’s why:

  • Medicare is your primary insurance: Once you qualify for Medicare, it becomes your main source of health coverage. ACA plans are designed for individuals who do not qualify for Medicare or other government programs.

  • Loss of ACA subsidies: Once you are eligible for Medicare, you are no longer eligible for the premium tax credits or other subsidies that help reduce the cost of ACA plans. You will need to disenroll from your ACA plan and enroll in Medicare.

2. Steps for Transitioning to Medicare

When you become eligible for Medicare, it’s important to follow these steps to ensure a smooth transition from your ACA plan:

A. Apply for Medicare

  • Automatic enrollment: If you are already receiving Social Security benefits, you will be automatically enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance) when you turn 65 or qualify through disability. You’ll receive a Medicare card in the mail.

  • Manual enrollment: If you are not automatically enrolled, you’ll need to apply for Medicare during your Initial Enrollment Period, which begins three months before you turn 65 and lasts for seven months. You can apply through the Social Security Administration.

B. Cancel Your ACA Plan

Once you have Medicare, you will need to disenroll from your ACA health insurance plan. You can do this through the ACA Marketplace:

  • Notify the Marketplace: Let the Marketplace know you are eligible for Medicare, and you can cancel your ACA plan without penalty.

  • No double coverage: Having both ACA insurance and Medicare is not allowed, and the Marketplace will not provide you with premium subsidies if you are eligible for Medicare.

C. Special Enrollment for Medicare Advantage or Medigap

If you want additional coverage beyond Original Medicare, you can consider enrolling in:

  • Medicare Advantage (Part C): A private insurance plan that provides all the benefits of Medicare Parts A and B, often with additional benefits like vision, dental, and prescription drug coverage.

  • Medicare Supplement (Medigap) plans: These plans help cover out-of-pocket costs like copayments, coinsurance, and deductibles not covered by Original Medicare.

3. If You’re Under 65 With a Disability

If you are under 65 and eligible for Medicare due to a disability, you will need to transition from your ACA plan to Medicare. The rules are similar:

  • Medicare becomes your primary insurance, and your ACA plan will no longer be available once you’re eligible for Medicare.

  • You can explore additional options like Medicare Advantage or Medigap if you need more coverage.

4. What Happens If You Delay Medicare Enrollment?

It’s important not to delay enrolling in Medicare once you are eligible, as this can lead to penalties and loss of coverage. Here’s what happens if you don’t sign up for Medicare on time:

  • Loss of ACA subsidies: You will no longer be eligible for ACA subsidies once you qualify for Medicare, so continuing an ACA plan without enrolling in Medicare means you’ll have to pay full price for the ACA plan.

  • Late enrollment penalties: If you delay enrolling in Medicare Part B, you may face a late enrollment penalty, which could increase your monthly premiums for as long as you have Medicare.

5. Exceptions: Limited Dual Eligibility

In some very specific cases, you may be able to temporarily have both ACA and Medicare coverage during a transition period. However, you will eventually need to disenroll from your ACA plan to avoid coverage conflicts and penalties.

6. How ACA Plans Differ From Medicare

Here are some key differences between ACA insurance and Medicare:

  • Eligibility: ACA plans are available to individuals and families under 65 who do not qualify for other government programs like Medicare or Medicaid. Medicare is for individuals aged 65 and older or those with qualifying disabilities.

  • Coverage: ACA plans cover essential health benefits, which include preventive services, prescription drugs, and maternity care. Medicare covers hospital and medical services under Part A and Part B, with options to add prescription drug coverage (Part D) or additional benefits through Medicare Advantage.

Key Takeaways:

  • Once you become eligible for Medicare, you will need to disenroll from your ACA plan and transition to Medicare, as the two programs do not coordinate.

  • You can enroll in Medicare Advantage or Medigap for additional coverage if you want more than Original Medicare offers.

  • Failing to enroll in Medicare on time can result in the loss of ACA subsidies and potential late enrollment penalties.

For help understanding your options when transitioning from ACA insurance to Medicare, schedule an appointment with a Tsunami Advisor here: Schedule an Appointment.

Jerdon Johnston
Previous

Can I have ACA insurance and Medicaid?
Next

Can I have ACA insurance along with employer-sponsored insurance?