Common Medicare Situations
Turning 65 With Marketplace Insurance: What Happens to Your ACA Coverage?
If you're approaching 65 and currently have health insurance through the ACA Marketplace, you may assume your coverage will simply switch over to Medicare when you become eligible.
It doesn't work quite that way.
Marketplace coverage and Medicare are separate programs. Moving from one to the other involves a few decisions and some timing that you should understand before your Medicare coverage begins.
This is especially important if you're receiving financial help with your Marketplace coverage or if other members of your household will remain on the Marketplace after you move to Medicare.
Does Marketplace coverage automatically turn into Medicare at 65?
No. Your Marketplace health plan does not convert into Medicare.
Medicare eligibility usually begins around age 65, but whether you need to actively sign up for Medicare depends partly on your Social Security situation. Some people are automatically enrolled, while others need to apply.
Your first Medicare enrollment opportunity is generally a seven-month Initial Enrollment Period that begins three months before the month you turn 65, includes your birthday month, and continues for three months afterward.
The important point is that having Marketplace coverage generally does not give you the same reason to delay Medicare that qualifying coverage based on your or your spouse's current employment may provide.
Can I just keep my Marketplace plan instead of enrolling in Medicare?
For most people who qualify for premium-free Medicare Part A, keeping Marketplace coverage instead of enrolling in Medicare can create problems.
Medicare advises people with Marketplace or other individual coverage to generally enroll in Medicare when they are first eligible. Delaying Medicare because you have Marketplace coverage can lead to a delay in Medicare coverage and may result in late enrollment penalties.
There is an exception worth knowing about: people who do not qualify for premium-free Part A can have different choices. That situation deserves an individual review rather than assuming the general rule applies.
What happens to my Marketplace financial help when Medicare starts?
This is one of the most important parts of the transition.
Once you're eligible for premium-free Medicare Part A, you generally can no longer qualify for Marketplace financial assistance such as the premium tax credit. Continuing to receive Marketplace savings after becoming eligible for Medicare can create tax consequences and may mean paying back some or all of that assistance when you file your federal income tax return.
That is why the transition should be planned before Medicare begins rather than handled months afterward.
Will the Marketplace automatically cancel my health plan?
No. This catches many people by surprise.
HealthCare.gov specifically warns that Marketplace coverage does not automatically end when Medicare starts. You need to update your Marketplace application so the coverage ends at the appropriate time.
You also don't want to cancel too early. Ending your Marketplace coverage before your Medicare effective date could leave you with a gap in health insurance.
The goal is a clean handoff: your current coverage ends, and your Medicare coverage begins without an unnecessary gap or overlap.
What if my spouse or children are also on my Marketplace plan?
Turning 65 doesn't mean everyone in your household has to leave the Marketplace.
If you're the person becoming eligible for Medicare but your spouse or other family members still need Marketplace coverage, the Marketplace application can be updated for your change while eligible household members remain enrolled.
This is another reason not to simply cancel the entire policy. The change should reflect who is moving to Medicare and who still needs Marketplace coverage.
When should I start preparing for the transition?
Don't wait for your 65th birthday to begin looking at this.
A good starting point is during the months leading up to Medicare eligibility. First, determine whether Medicare will be automatic for you or whether you need to enroll. Then confirm when your Medicare coverage should begin before making changes to your Marketplace plan.
Once those dates are clear, you can work backward and decide when the Marketplace application needs to be updated.
You also have another decision to make: how you want to receive your Medicare coverage after Parts A and B are in place. That is a separate decision from simply enrolling in Medicare, and you don't need to solve every part of it at once.
What if the Marketplace sends me a notice about turning 65?
If you receive a Marketplace notice as you approach Medicare eligibility, don't ignore it or assume Medicare has already been arranged for you.
Use the notice as a reminder to verify your Medicare enrollment status, your expected Medicare effective date, and what needs to happen with your Marketplace coverage.
The Marketplace and Medicare are separate systems. A notice from one does not necessarily mean every step has been completed with the other.
A simple checklist before you leave Marketplace coverage
Before making changes, make sure you can answer these questions:
- When does my Medicare eligibility begin?
- Will I be automatically enrolled, or do I need to apply?
- What is my actual Medicare effective date?
- When should my Marketplace coverage end?
- Is anyone else in my household staying on the Marketplace plan?
- Am I currently receiving Marketplace financial assistance?
- What Medicare coverage decisions still need to be made after Parts A and B?
You don't need to become a Medicare expert. You just want the dates and pieces coordinated before changing the coverage you already have.
The transition is easier when you plan it before 65
For someone who has used Marketplace insurance for several years, Medicare can feel like an entirely different system because it is.
Golden Milestone Services is an independent insurance agency helping people understand both Medicare and ACA health insurance. That experience can be especially useful when someone is moving from Marketplace coverage into Medicare because the conversation doesn't begin with Medicare alone; it begins with the coverage you already have and how to transition from it.
Help is available in both English and Hmong for individuals and families who are more comfortable discussing healthcare coverage in either language.
If you're approaching 65 with Marketplace insurance, the most important first step is not choosing an insurance company. It's understanding when your current coverage should end, when Medicare should begin, and what decisions need to happen between those two dates.
Common questions
Does my ACA Marketplace plan automatically end when I turn 65?
No. Marketplace coverage does not automatically end when Medicare starts. You generally need to update your Marketplace application so your Marketplace coverage ends at the appropriate time.
Can I keep my Marketplace insurance after I become eligible for Medicare?
You may technically remain enrolled in a Marketplace plan, but most people who become eligible for premium-free Medicare Part A are no longer eligible for Marketplace financial assistance. Marketplace coverage also generally is not a substitute for enrolling in Medicare when you're first eligible.
Does having Marketplace coverage let me delay Medicare Part B?
Marketplace coverage generally does not provide the same Medicare Part B Special Enrollment Period protection as qualifying employer group health coverage based on current employment. Medicare advises people with Marketplace coverage to generally enroll when first eligible.
What happens if my spouse is younger than 65 and is on my Marketplace plan?
Your spouse may be able to remain on Marketplace coverage after you move to Medicare. Update the Marketplace application for the person beginning Medicare rather than assuming the entire household's coverage should be canceled.
When should I cancel Marketplace coverage before Medicare?
First confirm your Medicare effective date. Marketplace coverage should generally be coordinated so it ends when Medicare coverage begins, rather than being canceled before the Medicare start date and creating a coverage gap.
Will the Marketplace enroll me in Medicare when I turn 65?
No. Medicare enrollment is handled separately. Some people receive Medicare automatically based on their Social Security status, while others need to actively enroll through Social Security.