Differences Between Medicare and ACA Plans

Health insurance is important for everyone, especially seniors who use more healthcare services and have the highest number of clinic visits and hospitalizations of any age group. But choosing a health insurance plan can feel overwhelming because there are so many options, even for seniors who qualify for Medicare. The U.S. health insurance market changed in 2014 when the Affordable Care Act’s health insurance exchanges went into effect. Suddenly, there were more insurance options available for individuals. So, Differences Between Medicare and ACA Plans

Differences Between Medicare and ACA Plans

The Affordable Care Act (also known as Obamacare and the ACA) and Medicare are not the same thing.

What is Medicare? Medicare is federal health insurance for people 65 or older, some younger people with disabilities, and people with End-Stage Renal Disease (ESRD).

What is the ACA? The ACA is a comprehensive health care reform law enacted in March 2010 with three goals:

1. Make affordable health insurance available to more people through subsidized premium tax credits. (This translated into subsidies for a range of individual private health plans on health insurance marketplaces.)

2. Expand the Medicaid program to cover all adults with income below 138% of the Federal Poverty Line. (Prior, it was mostly only available to those with disabilities, pregnant women, and children.)

3. Support innovative medical care delivery methods designed to lower the costs of healthcare, generally.

Similarities between ACA plans and Medicare

So, what are the similarities between ACA plans and Medicare?

• Both the ACA and Medicare are programs designed to improve access to health insurance plans to specific populations.

• Both Medicare Advantage plans and ACA plans are administered by private health insurance companies such as Kaiser Foundation and Aetna.

• Both ACA plans and Medicare offer financial assistance for low-income Americans.

• Both ACA plans and Medicare Advantage plans are required to cover certain services (though the requirements are different.)

Differences between ACA plans and Medicare

Here are the differences between ACA plans and Medicare:

• The ACA is not a plan itself, but a law governing what private insurance plans cover and how much they charge, while Medicare is not a law but a health plan that you can enroll in when you turn 65, or with qualifying disability or ESRD.

• Original Medicare is health insurance administered through the Department of Health & Human Services (HHS), while ACA plans are private health insurance plans administered by private health insurance companies such as Kaiser Foundation and Aetna.

• Medicare is available to seniors 65 and older, while ACA plans are generally meant for people under the age of 65.

• ACA plans are required to cover 10 essential health benefits, including preventive care, emergency services, hospitalization, prescription drugs, mental health services, and pregnancy care. Plans also must offer dental coverage for children. Original Medicare covers a wide variety of health care services but leaves out some essential services such as dental care, hearing aids, and prescription drugs. (Medicare Advantage plans typically do cover these services.)

Should I sign up for Medicare or a Plan on the ACA Health Insurance Marketplace?

Some seniors wonder if they should sign up for an individual plan on the ACA Health Insurance Marketplace instead of for Medicare but the ACA is not an option for seniors who are already enrolled in Medicare. It is actually illegal for an insurance broker or a health plan to sell you a Marketplace plan if it’s clear that you’re eligible for or are currently covered by Medicare.

When can you choose an ACA Marketplace health plan over Medicare?

There are two times seniors can choose an ACA Marketplace health plan over Medicare:

1. If you are eligible for Medicare but haven’t enrolled yet (be aware that there are late enrollment penalties for failing to enroll in Medicare when you are eligible and do not have creditable group coverage.)

2. If you aren’t eligible for premium-free Part A (seniors who did not pay Medicare taxes for at least 10 years).

If you have Medicare and are looking for additional or expanded coverage, you can switch to a Medicare Advantage plan or add a Medicare supplement plan to Original Medicare. Annual Enrollment Period is open until December 7 so this is a great time to look into your options!

Contact a PBC Agent for Help

Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. We are the only insurance agency in Hawaii contracted with EVERY Medicare Advantage plan, which means we are able to offer unbiased advice; all at no cost to our clients.

At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.