The Affordable Care Act (ACA, also commonly called Obamacare) and Medicare are two very different concepts.
The ACA is a sweeping series of laws that regulate the US health insurance industry. Medicare is a federal health insurance program for people 65 and older, as well as certain younger people with disabilities or medical conditions. There are several different types of Medicare coverage.
In this guide, we compare and contrast Medicare vs. Obamacare in 2020, so you can better understand these types of health coverage.
What are Medicare, Medicaid and Obamacare?
There are four typical ways that many Americans receive health insurance today:
- A group health plan sponsored by an employer
- Private insurance purchased through the Marketplace (commonly referred to as Obamacare or ACA plans, even though these plans are administered by private carriers, not the government)
- Medicare, which is a federally-funded health insurance program for adults over age 65 and some younger people with certain disabilities and medical conditions
- Medicaid, which is a government health insurance program for people who have limited financial resources
Can you get Obamacare if you are on Medicare?
In most cases, you will typically want to end your Marketplace plan (Obamacare plan) when you first become eligible for Medicare.
Your Medicare eligibility and your Medicare coverage start date depend on your personal situation, so be sure to check with healthcare.gov to determine your eligibility.
What is Medicare?
Medicare provides health insurance to nearly 60 million Americans in 2019.1
Medicare is available to people who are at least 65 years old or younger Americans who have a qualifying disability, such as ALS (Lou Gehrig’s Disease) or End-Stage Renal Disease (ESRD).
Medicare Part A and Part B are commonly referred to as Original Medicare. They are provided by the federal government.
- Part A provides coverage for hospital costs and other inpatient care.
- Part B provides coverage for certain doctor’s office visits, certain outpatient care services and qualified durable medical equipment (DME).
There are other types of Medicare health coverage that are offered by private insurance companies.
- Medicare Part C
Medicare Part C, also called Medicare Advantage, provides all the same coverage as Part A and Part B combined into a single plan. Many Medicare Advantage plans offer additional benefits that may include routine dental and vision care, as well as prescription drug coverage, all of which are not covered by Original Medicare. - Medicare Part D
Medicare Part D plans provide coverage for certain prescription drugs. Original Medicare doesn’t typically cover retail prescription drugs. - Medicare Supplement Insurance
Also known as Medigap, Medicare Supplement Insurance plans provide coverage for certain out-of-pocket costs associated with Part A and Part B. These costs can include Medicare deductibles, coinsurance and/or copayments.
What is Obamacare?
Obamacare is another name for the Patient Protection and Affordable Care Act of 2010, which was signed into law by President Barack Obama.
Obamacare mandated that everyone maintain health insurance coverage, or else they would face a tax penalty. Many people associate Obamacare with the health insurance plans that are sold on the ACA exchange, or Marketplace.
The ACA health insurance exchange opened for business in January of 2014. This marketplace sold plans that qualified as satisfactory coverage according to the new law.
While the ACA remains in place, the tax penalty for not having insurance (called the individual mandate) was repealed in 2019.
More than 11.4 million Americans were enrolled in a health insurance plan obtained through the Obamacare Marketplace in 2019.2
Obamacare (Marketplace) plans vs. Medicare
Here is a look at how Medicare and Obamacare compare and contrast across a number of different categories.
Cost
- Medicare
Most people receive premium-free Medicare Part A. The standard premium for Part B is $144.60 per month in 2020.
There are other 2019 costs you may face with Medicare Part A and Part B, such as deductibles, coinsurance and copayments.
The average Medicare Advantage plan premium in 2018 was $35.55 per month.3
The average Medicare Part D plan premium in 2018 was $52.23 per month.3
The average Medicare Supplement Insurance plan premium in 2018 was $125.93 per month.4
- Obamacare plans
Average monthly 2019 Obamacare premiums range from $326 per month in the state with the lowest premiums (Minnesota) to $865 per month in the state with the highest premiums (Wyoming).6
Coverage
- Medicare
Medicare coverage is outlined above. Medicare does not typically cover services such as cosmetic procedures, alternative therapies and long-term custodial care. - Obamacare plans
Plans purchased through the ACA exchange will provide different benefits according to their coverage level. Obamacare plans are assigned categories of either bronze, silver, gold or platinum, depending on the quality of coverage.
Plans of all levels must cover 10 “essential benefits,” which include things like emergency care, prescription drugs, newborn care and more.
Financial assistance
- Medicare
There are several federal programs that assist Medicare beneficiaries who have lower incomes pay for certain Medicare costs.
Depending on your income level and the amount of financial resources you have, you may qualify for certain Medicare Savings Programs, or you may qualify for Medicaid and Medicare. This is called being Medicare dual-eligible. - Obamacare plans
Some qualified Obamacare marketplace plan members may qualify for federal subsidies to help pay some of their health care costs, such as premiums and deductibles.
Plan selection
- Medicare
Medicare Part A and Part B are available throughout the U.S. and U.S. territories. Many providers accept Medicare assignment, and you can find more information on providers near you who accept Medicare.
Private Medicare plan selection may vary by location. Depending on where you live, there may be different types of Medicare Advantage plans, Medicare Part D plans or Medicare Supplement Insurance plans available.
There may be some areas where certain types of private Medicare plans are not be available at all. - Obamacare plans
Obamacare plan selection varies by state. Some states have more participating insurance companies than others. You can refer to healthcare.gov to learn more about the Marketplace plans that may be available where you live.
Enrollment
- Medicare
When you first become eligible for Medicare, you are typically given a 7-month window in which to sign up for Medicare. This is called your Medicare Initial Enrollment Period.
There are other enrollment periods that allow you to sign up for, leave, switch or change your Medicare plan coverage. These periods include the Annual Enrollment Period which lasts from October 15 to December 7 every year.
Depending on your situation, you may also qualify for a Medicare Special Enrollment Period. - Obamacare plans
There is an open enrollment period every fall during which you can enroll in or change your Obamacare coverage. The Open Enrollment Period lasts from November 1 to December 15.
If you don’t enroll in a plan before December 15, you can’t get coverage for the next year unless you qualify special enrollment period.
Do I need Medicare or an Obamacare (Marketplace) plan?
When it comes to choosing between Medicare or Obamacare, there’s no single right answer.
You can check with healthcare.gov to determine your eligibility and to make sure you don’t let your health insurance coverage lapse.
To learn more about Medicare Advantage plans that may be available in your area, a licensed insurance agent can help you compare plan specifics such as costs, coverage networks and benefits.
Learn about Medicare Advantage plans in your area
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