Yes. If you have health insurance from the Affordable Care Act (ACA) health insurance marketplace rather than from an employer, you’ll need to sign up for Medicare Part A and Part B when you’re eligible at age 65.
Sign up during your initial enrollment period, which begins three months before the month you turn 65 and ends three months after your birthday month. Otherwise, you’ll have to wait to enroll during the next general enrollment period Jan. 1 to March 31. You may also have to pay a late enrollment penalty.
While you don’t have to drop your ACA health insurance to enroll in Medicare, most people do. For those who qualify for premium-free Medicare Part A, your marketplace insurance premium subsidies end after you’re eligible for Part A at age 65.
If you choose to keep the marketplace coverage, you’ll have to pay full price because you’ll no longer be eligible for subsidies based on your income. If the marketplace doesn’t adjust your premiums right away, you may have to pay back the extra subsidies when you file your federal income tax return.
These premium subsidies, which are tax credits given in advance to help with the cost of ACA marketplace insurance, were expanded significantly in 2021, and the Inflation Reduction Act extended this premium assistance through 2025.
Even though you can keep your marketplace coverage after you enroll in Medicare, you can’t get a new marketplace policy at that point. In fact, it’s against the law for someone who knows you have Medicare to sell you a marketplace health insurance plan.
If you want extra coverage to help pay Medicare’s deductibles and copayments, you have a couple of options. You can buy a Medicare supplement policy, better known as Medigap, or you can choose to get your medical and drug coverage from a private Medicare Advantage plan, which must provide the same coverage as Medicare Part A and Part B but has different deductibles and copayments.
What happens if I have to pay a premium for Part A?
The rules are different for those who aren’t eligible for premium-free Medicare Part A. If you or your spouse worked for at least 40 calendar quarters, the equivalent of 10 years, and had Medicare taxes deducted from your pay, you won’t pay premiums for Part A.
If you or your spouse paid Medicare taxes for 30 to 39 quarters, you’ll have to pay Part A premiums of $278 a month in 2023, an amount often less than the least expensive marketplace premiums without a subsidy. That amount increases to $506 a month if you’ve worked fewer than 30 quarters.