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If you’re wondering about Medicare vs. Obamacare, here’s some information for you. We’ll look at how the Affordable Care Act (ACA) has changed the Medicare program and what steps, if any, you may need to take.
Medicare vs. Obamacare: background
The 2010 Affordable Care Act (“Obamacare”) requires all Americans to have health insurance that meets minimum coverage standards.
Medicare is a government health program for eligible people aged 65 and over or who qualify by disability.
Medicare vs. Obamacare: changes
Obamacare made changes to the Medicare program.
One of the biggest changes to Medicare under Obamacare was the closing of the Medicare Part D coverage gap, or “donut hole.”
The coverage gap is a temporary limit on what your Medicare plan with prescription drug coverage has to pay for covered medications. You may enter the coverage gap after you and your plan spend a certain amount on covered medications. Before Obamacare, your share of prescription costs in the coverage gap was much higher. But as part of the Obamacare changes to Medicare, the Part D coverage gap will finally close in 2020.
Obamacare also expanded Medicare preventive services. Under the law, Medicare added a new yearly “Wellness” visit, in addition to its existing “Welcome to Medicare” visit.
Obamacare also made certain Medicare preventive screenings and vaccines free, with no copayment or coinsurance.
Medicare vs. Obamacare: do I have to make any changes if I have Medicare?
When thinking about Medicare vs. Obamacare, you might wonder if your Medicare benefits count as qualifying health insurance according to the Affordable Care Act. In other words, does Obamacare require you to have other health coverage besides Medicare?
If you’re enrolled in Original Medicare (Part A and Part B) or a Medicare Advantage plan, you’re considered covered under Obamacare. Both of these count as “qualifying health insurance,” which means you don’t need to do anything else to meet the Affordable Care Act requirement to have health coverage. You’re also covered under Obamacare if you’re enrolled in Part A only.
However, if you only have Medicare Part B, you’re not considered covered under the Affordable Care Act. Starting with the 2019 plan year, this penalty is ending.
Medicare vs. Obamacare: can I get Obamacare instead of Medicare?
If you already have Medicare, you usually can’t get an Obamacare plan instead. In fact, it’s against the law for someone to sell you a plan, even if you only have Part A or only Part B.
Here’s something to consider when you’re thinking about Medicare vs. Obamacare, especially if you have to pay a premium for your Part A coverage. (Most people don’t have to pay a monthly premium for Medicare Part A.) If you want Obamacare, you might be able to disenroll from Medicare Part A and Part B and get an Obamacare plan instead. Part B typically comes with a premium unless you qualify for income-based assistance.
But before you decide to choose Obamacare over Medicare, you might want to take a look at this Medicare vs. Obamacare premium comparison chart. An eHealth study looked at average premiums for:
- Various combinations of Medicare coverage
- Obamacare plans for people aged 63-64
(Medicare, of course, is mainly for people 65 and over, although some people qualify through disability.)
Source: Premiums and Out-of-Pocket Costs Before and After Medicare (eHealth, 2018, based on 2017-2018 data)
As you can see, on average, premiums for Medicare plans are much lower than for Obamacare plans.
Medicare vs. Obamacare: can I get Obamacare before I have Medicare?
If you’re not yet eligible for Medicare, you can generally get Obamacare in the meantime. You may be able to enroll in Obamacare for the 2020 plan year during the Obamacare Open Enrollment Period (November 1, 2019 to December 15, 2019). Outside of the Obamacare Open Enrollment Period, you may qualify for a Special Enrollment Period in certain situations, like getting married.
After your Medicare coverage starts, you’ll probably want to end your Obamacare plan so that you’re not paying for extra coverage you don’t need. Make sure to sign up for Medicare when you’re first eligible during your Initial Enrollment Period.
Medicare vs. Obamacare: how would repealing the Affordable Care Act affect Medicare?
Congress voted to repeal and replace the Affordable Care Act. In May 2017, the House passed the American Health Care Act, and in June 2017, the Senate passed the Better Care Reconciliation Act.
Both bills keep most of Obamacare’s changes to Medicare. The closing of the Medicare Part D coverage gap and expansion of preventive services are untouched.
However, both bills repealed the Affordable Care Act’s Medicare payroll tax on high-income earners. This was a tax designed to increase funding for Part A. The Affordable Care Act increased the tax by .9% for taxpayers who make more than $200,000 for individuals or $250,000 for couples. Some reports say taking out this tax could hurt Part A funding in the long run.
Congress hasn’t agreed on a final version of a repeal/replace bill. So it could be some time before we learn how Medicare vs. Obamacare differences will play out.
Hopefully, you now have a better idea of Medicare vs. Obamacare. If you’d like to learn more about Medicare plan options, simply click the Get Quotes button to schedule a phone call or to request a personalized email.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.