Medicare vs ACA Marketplace

Key Differences Between Medicare and ACA Marketplace Plans

Medicare and ACA marketplace plans are both health insurance options, but they serve different groups of people. Understanding which one applies to you matters most when you are approaching age 65 and need to transition from one to the other.

Medicare is a federal health insurance program run by the Centers for Medicare and Medicaid Services (CMS). It covers people 65 and older, plus younger people with qualifying disabilities. About 65 million Americans are enrolled. Medicare has four parts: Part A (hospital), Part B (doctor visits), Part C (Medicare Advantage through private insurers), and Part D (prescriptions). Most people pay no premium for Part A. The standard Part B premium is $202.90 per month in 2026. You can read our full Medicare guide for details on each part.

ACA marketplace plans are private health insurance plans sold through the Health Insurance Marketplace at HealthCare.gov. About 22.8 million Americans enrolled for 2026 coverage. The government provides premium tax credits based on your income to lower monthly costs. Many people pay as little as $50 per month after credits. All marketplace plans cover 10 essential health benefits, including maternity care, mental health services, and prescription drugs. See our full ACA guide for income limits and subsidy details.

The biggest structural difference is how eligibility works. Medicare eligibility is based on age or disability. Your income does not determine whether you can enroll, though higher-income enrollees pay more for Part B. ACA subsidy eligibility is based entirely on income, covering people who earn between 100% and 400% of the federal poverty level ($15,960 to $63,840 for a single person in 2026). Once you qualify for Medicare, you are no longer eligible for ACA premium tax credits, according to HealthCare.gov.

Coverage structure also differs. Medicare splits coverage across four separate parts, and you may need to enroll in multiple plans (Part B plus a Part D drug plan, or a Medicare Advantage plan). ACA marketplace plans bundle everything into a single plan, including prescription drugs. Marketplace plans also cover maternity care and pediatric dental and vision, which Original Medicare does not.

Switching from ACA to Medicare at Age 65

This is the most common source of confusion. When you turn 65, you become eligible for Medicare, and you must act. You cannot keep receiving ACA subsidies once you are eligible for Medicare Part A, even if you have not enrolled yet. Staying on a marketplace plan after becoming Medicare-eligible means paying full price with no tax credits.

Your Medicare Initial Enrollment Period (IEP) is a seven-month window: it starts three months before your 65th birthday month, includes your birthday month, and ends three months after. Sign up during this window to avoid late enrollment penalties. You can enroll at SSA.gov or by calling Social Security at 1-800-772-1213.

Your ACA marketplace coverage does not end automatically when Medicare begins. You must log in to your HealthCare.gov account (or your state exchange) and cancel your marketplace plan. You can report your Medicare start date up to three months in advance. If your Medicare starts on May 1, for example, you can update your application as early as February 1 so your marketplace plan ends on April 30.

Timing is important to avoid a gap in coverage or paying for two plans at once. The best approach: enroll in Medicare during the first three months of your IEP (before your birthday month) so coverage starts on the first day of your birthday month. Then end your marketplace plan on the last day before Medicare kicks in.

If you are unsure about your timeline, use our free screener to check what you qualify for, or contact your state's SHIP program for free Medicare counseling.

Can You Have Both Medicare and an ACA Plan?

Technically, you can buy a marketplace plan while on Medicare, but there is almost no reason to do so. Once you have Medicare Part A or Part C, you cannot receive premium tax credits or cost-sharing reductions on a marketplace plan. You would pay the full, unsubsidized price. It is also against the law for someone who knows you have Medicare to sell you a marketplace plan.

Marketplace coverage does not lower your Medicare out-of-pocket costs. Medicare offers its own cost-saving programs for people with limited income. Medicare Savings Programs can pay your Part B premium and other costs. The Extra Help program lowers Part D prescription drug costs to between $0 and $11.20 per prescription.

If you have low income and are on Medicare, Medicaid may be a better supplement than any marketplace plan. About 12.8 million Americans are "dual eligible" for both Medicare and Medicaid. Check our Medicare vs Medicaid comparison for details on how the two programs work together.

Which Program Is Right for You?

Your situation determines which program you should use. Here are the most common scenarios:

If you are under 65 with no employer coverage: The ACA marketplace is your primary option. Check HealthCare.gov to see plans and subsidies in your area. If your income is below 138% of the federal poverty level ($21,597/year for one person), you may qualify for Medicaid instead, which is free in expansion states.

If you are turning 65 and on an ACA plan: Start your Medicare enrollment during the three months before your birthday month. Sign up at SSA.gov. Cancel your marketplace plan so it ends the day before Medicare starts. Do not wait until after your birthday, as delays can mean penalties and coverage gaps.

If you are 65 or older: Medicare is your coverage. If you have limited income, check whether you qualify for Medicare Savings Programs, Extra Help with drug costs, or Medicaid. Use our free screener to check all programs at once.

If you are under 65 with a disability: You may qualify for Medicare after 24 months of receiving SSDI benefits. During the waiting period, an ACA marketplace plan or Medicaid can provide coverage. You may also qualify for SSI, which provides cash payments and automatic Medicaid in most states.

If your spouse is turning 65 but you are younger: Your spouse should switch to Medicare. You can stay on your ACA marketplace plan. Update your marketplace application to remove your spouse from the household coverage. Your subsidy amount may change based on the new household size and income.

Frequently Asked Questions

Do I have to drop my ACA plan when I turn 65?

You are not legally required to drop it, but you lose all premium tax credits and cost-sharing reductions once you become eligible for Medicare Part A. That means you would pay the full unsubsidized premium, which can be $500 or more per month. For almost everyone, Medicare is the better and cheaper option at age 65.

What if I am still working at 65 and have employer coverage?

If you have health insurance through your employer (or your spouse's employer), you can delay Medicare Part B enrollment without penalty. When the employer coverage ends, you get an eight-month Special Enrollment Period to sign up for Medicare. This situation is different from having an ACA marketplace plan, where you must switch to Medicare at 65 regardless.

Will I have a gap in coverage when switching?

Not if you time it correctly. Enroll in Medicare during the first three months of your Initial Enrollment Period so your Part A and Part B coverage starts on the first of your birthday month. Then end your marketplace plan on the last day of the previous month. If you wait until after your birthday month to enroll, Medicare coverage may not start for one to three months.

Is Medicare cheaper than ACA marketplace plans?

It depends on your income. For people who received large ACA subsidies (low-income households), the out-of-pocket cost of marketplace plans may have been very low. Medicare Part B costs $202.90/month regardless of income for most people, plus Part D premiums and cost-sharing. However, if you qualify for Medicare Savings Programs or Extra Help, your Medicare costs can drop to $0.

Does Medicare cover everything my ACA plan covered?

Not exactly. Original Medicare does not cover dental, routine vision, or hearing aids. It also does not cover maternity care. However, Medicare Advantage (Part C) plans often include dental, vision, and hearing benefits. Medicare also has a $2,100 annual cap on Part D prescription drug costs starting in 2025, which many ACA plans do not match. Our Medicare guide lists what each part covers.

Can I go back to an ACA plan after enrolling in Medicare?

Once you enroll in Medicare, going back to an ACA marketplace plan with subsidies is not an option. You can buy a marketplace plan at full price, but that rarely makes financial sense. If you are under 65 and enrolled in Medicare due to disability, you keep Medicare and cannot get ACA subsidies. The only common exception is if you lose Medicare eligibility entirely, which would trigger a Special Enrollment Period on the marketplace.

What happens to my ACA subsidy if I become Medicare-eligible mid-year?

Your premium tax credit stops for the months you are eligible for Medicare. If you turned 65 in June and became Medicare-eligible, you would need to repay any ACA subsidies you received from June onward when you file your federal tax return. Report your Medicare eligibility to the marketplace as soon as possible to avoid owing money at tax time.

How do I get help with the transition?

Every state has a State Health Insurance Assistance Program (SHIP) that provides free, unbiased Medicare counseling. Trained counselors can help you understand your Medicare options and plan the switch from your ACA plan. Find your state's SHIP program at shiphelp.org. You can also call 1-800-MEDICARE (1-800-633-4227) or use our free eligibility screener to see all programs you qualify for.