Medicare vs. ACA (Formerly Obamacare)

Medicare and the Affordable Care Act are very different things. Obamacare is a law that set guidelines for what private health insurance plans must cover and was meant to make health care coverage more accessible to some Americans. Those plans are available through the Health Insurance Marketplace. Medicare is a federal health program designed mainly for Americans who are 65 or older.

Christian Simmons, writer and researcher for RetireGuide
  • Written by
    Christian Simmons

    Christian Simmons

    Financial Writer

    Christian Simmons is a writer for RetireGuide and a member of the Association for Financial Counseling & Planning Education (AFCPE®). He covers Medicare and important retirement topics. Christian is a former winner of a Florida Society of News Editors journalism contest and has written professionally since 2016.

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  • Edited By
    Lamia Chowdhury
    Lamia Chowdhury, editor for RetireGuide.com

    Lamia Chowdhury

    Financial Editor

    Lamia Chowdhury is a financial content editor for RetireGuide and has over three years of marketing experience in the finance industry. She has written copy for both digital and print pieces ranging from blogs, radio scripts and search ads to billboards, brochures, mailers and more.

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  • Published: April 6, 2022
  • Updated: September 9, 2022
  • 5 min read time
  • This page features 5 Cited Research Articles
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APA Simmons, C. (2022, September 9). Medicare vs. ACA (Formerly Obamacare). RetireGuide.com. Retrieved September 29, 2022, from https://www.retireguide.com/medicare/basics/aca-vs-medicare/

MLA Simmons, Christian. "Medicare vs. ACA (Formerly Obamacare)." RetireGuide.com, 9 Sep 2022, https://www.retireguide.com/medicare/basics/aca-vs-medicare/.

Chicago Simmons, Christian. "Medicare vs. ACA (Formerly Obamacare)." RetireGuide.com. Last modified September 9, 2022. https://www.retireguide.com/medicare/basics/aca-vs-medicare/.

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Are Medicare and the ACA (Obamacare) the Same Thing?

The Affordable Care Act and Medicare are not the same thing. Obamacare is not so much a plan itself, but a law governing what private insurance plans cover and how much they charge. Private health plans are also typically available to all Americans.

Medicare on the other hand is not a law but a health plan that you can enroll in later in life. Original Medicare is available through the federal government, but you are typically only eligible if you have turned 65.

You also usually cannot pair a private plan with Medicare coverage. According to the U.S. Centers for Medicare & Medicaid Services, you cannot be sold a private insurance plan from the Health Insurance Marketplace if you already have Medicare.

Enrolling in a Marketplace plan is an option if you are eligible for Medicare but haven’t enrolled yet. But it’s important to remember that Medicare has late enrollment penalties, so this could cost you if you later decide you want to switch to Medicare.

You also aren’t eligible for help paying premiums on your private plan if you qualify for premium-free Part A. If you are not eligible for premium-free Part A, you can drop Medicare coverage to enroll in a private plan.

When Can You Opt for a Marketplace Health Plan over Medicare?
  • If you are eligible for Medicare but haven’t enrolled yet
  • If you aren’t eligible for premium-free Part A

If you have Medicare and are looking for additional or expanded coverage, there are other options available to you. You can enroll in Medicare Advantage, which is provided by private insurers and often includes additional benefits beyond the scope of Original Medicare.

You can also look into Medigap, which is supplemental insurance and can handle a lot of the costs associated with Medicare.

Main Differences Between Medicare and the ACA (Obamacare)

In the simplest terms, the main difference between understanding Medicare and Obamacare is that Obamacare refers to private health plans available through the Health Insurance Marketplace while Original Medicare is provided through the federal government. The groups each serve are also very different.

Medicare has fairly narrow eligibility requirements. In the vast majority of cases, you have to be 65 or older to qualify and also have to meet certain work requirements to be eligible for premium-free Part A. Plans available through the Health Insurance Marketplace are usually available to all Americans.

When you turn 65, it may make sense in most circumstances to switch to Medicare from a private health plan.

Preview to the New to Medicare PDF New to Signing Up for Medicare?
Medicare can be confusing. This free PDF will help guide you through the many enrollment periods, penalties and Medicare's "alphabet soup" of plans.

ACA Marketplace Plans vs. Medicare Benefits

Given the significant differences between plans available under Obamacare and through Medicare, your costs, eligibility and benefits will vary. It’s also important to remember that, since Marketplace plans are private, each specific plan will have its own costs and coverage.

Costs

Medicare’s costs are divided into the two parts of Medicare: Part A and Part B. Most people who are eligible for Medicare qualify for premium-free Part A. If you don’t qualify, then you will pay a monthly premium of $499 You’ll also have to meet the deductible of $1,556.

Beneficiaries will pay a monthly premium of $170.10 for Part B, as well as a deductible of $233. Costs for Medicare may be different if you opt for a Medicare Advantage plan.

While Medicare’s costs are largely the same for all beneficiaries, costs can vary heavily for plans purchased on the Health Insurance Marketplace since each plan is different. Plans are typically divided into tiers, from bronze to platinum. Bronze plans come with the lowest premiums but significantly higher out-of-pocket costs, while higher tier plans have expensive premiums but handle more costs.

Eligibility & Enrollment

To be eligible for Medicare, you typically have to be 65 or older. You have a seven-month window to enroll that starts three months before your 65th birthday and ends three months after.

The Health Insurance Marketplace has much looser eligibility requirements. You typically just need to live in the United States and be a U.S. citizen. However, if you have job-based insurance and your employer appeals financial assistance through the Marketplace, you may not be able to enroll.

Coverage

Under Obamacare, private health plans that are sold in the Health Insurance Marketplace must cover certain key areas. This includes prescription drugs, lab services, hospitalization and emergency services.

Areas Marketplace Plans Must Cover
  • Ambulatory Services
  • Emergency Services
  • Hospitalization
  • Lab Services
  • Mental Health Services
  • Pediatric Services
  • Pregnancy, Maternity and Newborn Care
  • Prescription Drugs
  • Preventive Services
  • Rehabilitative Services

Medicare coverage is divided into Parts A and B. Part A covers inpatient care and hospital stays, while Part B covers outpatient treatments and services. Some notable areas are not covered by Medicare, including prescription drugs, vision and dental.

Coverage of those services can be available through Medicare Advantage plans or Part D prescription drug plans.

Medicare vs. Medicaid vs. Obamacare

While Medicare is health insurance for older Americans and Obamacare guides health insurance for all Americans, Medicaid is specifically for low-income Americans.

Medicaid is a state and federal program that, like Medicare, has specific eligibility requirements. Your income typically must be below a certain level to qualify you for coverage.

If you are eligible for Medicaid, it typically would not make sense to opt for Obamacare or Medicare since those types of plans will cost more and cover many of the same things.

Medicaid also covers areas beyond the scope of the others, such as long-term care.

Last Modified: September 9, 2022

5 Cited Research Articles

  1. U.S. Centers for Medicare & Medicaid Services. (2019, August). Medicare and the Health Insurance Marketplace. Retrieved from https://www.medicare.gov/Pubs/pdf/11694-Medicare-and-Marketplace.pdf
  2. AARP. (2016, September 21). Making the Leap from Obamacare to Medicare. Retrieved from https://www.aarp.org/health/medicare-insurance/info-2016/obamacare-to-medicare-eligibility-pb.html
  3. U.S. Centers for Medicare & Medicaid Services. (n.d.). Are you eligible to use the Marketplace. Retrieved from https://www.healthcare.gov/quick-guide/eligibility/
  4. U.S. Centers for Medicare & Medicaid Services. (n.d.). Essential health benefits. Retrieved from https://www.healthcare.gov/glossary/essential-health-benefits/
  5. U.S. Centers for Medicare & Medicaid Services. (n.d.). Ways to apply for 2022 health insurance. Retrieved from https://www.healthcare.gov/apply-and-enroll/how-to-apply/