Obamacare and Medicare

In this article...
  • Learn about the differences between Obamacare vs. Medicare, as well as the relationship between the two types of health insurance. You can’t have Obamacare (the Affordable Care Act, or ACA) and Medicare at the same time, and this guide can help you determine which program is the right fit for you.

Obamacare and Medicare are two very different programs. In this guide, we look at the differences between Obamacare vs. Medicare, including who they cover and how they’re paid for. We also explore the relationship between these programs and the ways Obamacare (the Affordable Care Act, or ACA) has impacted Medicare.

Are Obamacare and Medicare the Same Thing?

Not at all. Obamacare is a nickname for the Affordable Care Act (ACA), which is a series of health care legislation bills that went into effect in 2010, much of which remains in place today. A central part of Obamacare is a “marketplace” of private insurance plans that was created to provide health insurance options for people who lack employer-sponsored plans or other means of health insurance coverage.

Medicare is a federal health insurance program that took effect in 1966 and covers people aged 65 and older and some people under 65 who have a qualifying health condition or disability.

When people discuss Obamacare vs. Medicare, they are generally referring to the private under-65 health insurance plans sold on the marketplace vs. the public health insurance program that covers retirees, older adults and people with qualifying disabilities.

How Are Obamacare and Medicare Different?

There are several differences between Obamacare and Medicare.

Cost

Most people do not pay a premium for Medicare Part A, which is Medicare hospital insurance. The standard premium for Medicare Part B (medical insurance) is $148.50 per month in 2021.

Premiums for private Medicare plans like Medicare Advantage (Medicare Part C) plans and Medicare Part D prescription drug plans can average $20-$30 per month in 2021.

By contrast, the average premium for some Obamacare marketplace plans is more than $400 per month.

Enrollment

More than 61 million people are enrolled in Medicare, compared to around 12 million Americans who are enrolled in Obamacare.

Funding

While Medicare does receive some revenue by charging premiums, the bulk of the program’s funding comes from payroll taxes.

Obamacare works in a very different way: ACA Marketplace plans receive some federal funding, but the bulk of their revenue comes from premiums charged to plan members.

How Are Obamacare and Medicare Similar?

Despite their differences, Obamacare and Medicare are similar in certain ways.

Benefits

Original Medicare (Part A and Part B) has standardized benefits that are set by the federal government through the Centers for Medicare & Medicaid Services (CMS).

Private Medicare health plans such as Medicare Advantage plans have a little more flexibility in their coverage. Medicare Advantage plans cover everything that Part A and Part B cover, but they can also offer benefits such as prescription drug coverage, dental, hearing, vision and other things that Original Medicare doesn’t cover.

Obamacare plans feature coverage that must follow certain state and federal guidelines but can vary from one plan to the next.

Medicare and Obamacare are bound by many of the same federal coverage requirements, however, and they provide largely similar benefits.

Plan selection

Private Medicare plans and Obamacare Marketplace plans are similar in that plan selection can vary quite a bit by location and carrier. Your ZIP code can largely affect the plans that are available for you to enroll.

Government assistance

Both Obamacare and Medicare have assistance programs and subsidies available to help low-income beneficiaries better afford their plan premiums, deductibles, copayments and other costs associated with their coverage.

How Does Obamacare Affect Medicare?

While Obamacare and Medicare are two totally separate programs, there are a few ways in which Obamacare affects Medicare.

First and foremost, Affordable Care Act laws required health insurance companies — and Medicare — to provide coverage for a series of preventive services, screenings, tests and vaccines. Some other ways that Obamacare has influenced Medicare include:

  • Reducing Medicare beneficiaries’ prescription drug costs while in the Medicare Part D coverage gap, or “donut hole”

  • Expanding access to surgery, primary care and mental health services in underserved areas designated as health professional shortage areas (HPSAs)

  • Increasing the use of value-based payment systems where health care providers are reimbursed based on patient outcomes and not based on services rendered

  • Increasing Medicare funding by implementing an additional fee on Medicare Part B and Part D premiums for high income earners

Can You Get Obamacare If You Are on Medicare?

No. In fact, it’s illegal for anyone to sell you an Obamacare Marketplace insurance plan if they know you are enrolled in Medicare. And since you would receive mostly identical coverage on an Obamacare plan as your Medicare insurance, it would only be hurting your own wallet to pay for Obamacare.

Lastly, any premium subsidies you are receiving to help pay for your marketplace plan will be forfeited once you become eligible for premium-free Medicare Part A. However, you may qualify for a Medicare Savings Program or other programs that can help you pay for some of your Medicare costs.

Can You Keep Obamacare After Age 65?

While you cannot enroll in an Obamacare plan once you already have Medicare, you do have the option of choosing marketplace coverage after age 65 if you have delayed your Social Security benefits and haven’t enrolled in Medicare yet. Or if you have enrolled in Medicare but did not qualify for premium-free Part A, you may drop Medicare and enroll in Obamacare.

But once again, it wouldn’t make much financial sense to maintain both an Obamacare plan and Medicare at the same time.

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