Medicare and the Marketplace

Changing from the Marketplace to Medicare

If you have a Marketplace plan, you can keep it until your Medicare coverage starts. Then you can end your Marketplace plan without penalty.

If you like, you can keep your Marketplace plan too. But once your Medicare Part A coverage starts, you’ll no longer be eligible for any premium tax credits or other cost savings you may be getting for your Marketplace plan. So you’ll need to return to the Marketplace to terminate any premium tax credits or other cost savings, and pay full price for the Marketplace plan.

When you become eligible for Medicare

Let’s assume you have a Marketplace plan and are turning 65 sometime this year.

Once you’re eligible for Medicare, you’ll have an initial enrollment period to sign up for Medicare. For most people, the initial enrollment period starts 3 months before their 65th birthday and ends 3 months after their 65th birthday.

In most cases it’s to your advantage to sign up for Medicare when you’re first eligible because:

  • Once your Medicare Part A coverage starts, you won’t be able to keep any premium tax credits or other savings for a Marketplace plan based on your income. You’ll have to pay full price for the Marketplace plan.
  • If you enroll in Medicare after your initial enrollment period ends, your Medicare Part A coverage will begin up to 6 months prior to the month you enroll (but no earlier than the month you turn 65). In addition, you may have to pay a Part B late enrollment penalty for as long as you have Medicare. You can enroll in Medicare Part B (and Part A if you have to pay a premium for it) only during the Medicare general enrollment period (from January 1 to March 31 each year). Coverage doesn’t start until July of that year. This may create a gap in your coverage.

If you want coverage to supplement Medicare, you can get Medicare supplement (Medigap) insurance. It’s against the law for someone who knows that you have Medicare to sell you a Marketplace policy. This is true even if you have only Medicare Part A or only Part B.

If you have a Marketplace plan when you become eligible for Medicare benefits you can keep it, but without premium tax credits or other cost savings.

For prescription drug coverage, you can buy a Medicare Part D drug plan.

You can also learn about other Medicare options, like Medicare Advantage Plans.

Cancelling your Marketplace plan

To end your plan online, follow the instructions that best describe your situation:

  • I’m the only member of my household enrolled on my Marketplace plan. You’ll simply terminate the whole application. Learn how to cancel your Marketplace plan.
  • My spouse and I are both enrolled in the same Marketplace plan, but only my spouse needs to cancel due to getting Medicare. You’ll keep the Marketplace coverage for yourself and end Marketplace coverage only for your spouse. Learn how to remove certain household members from a Marketplace plan.

Be sure not to end your Marketplace plan before your Medicare coverage begins. Otherwise, you may have a gap in coverage.

In most cases, when you end coverage for only some people on your application, coverage ends immediately.

But in some cases, coverage won’t end immediately, including when the people staying on the Marketplace plan qualify for a Special Enrollment Period. For example, if you update your household income after ending coverage for one or more people and the amount of premium tax credits or other cost savings changes, the remaining enrollees may qualify for a Special Enrollment Period. The coverage end date for the person being removed from coverage will align with the coverage effective dates of the Special Enrollment Period. If Marketplace coverage doesn’t end immediately for the person being removed from the plan:

  • Person is removed on or before the 15th of the month: Coverage ends on the last day of the current month.
  • Person is removed after the 15th of the month: Coverage ends on the last day of the next following month.

Questions about changing from a Marketplace plan to Medicare?