What to Know About Medicare vs Marketplace Coverage for Older Adults

Health insurance decisions can get complicated fast as you approach your 60s. If you’re currently covered through a Marketplace plan (also called an ACA plan) and getting closer to Medicare eligibility, you might be wondering what to do next—and when to do it.

Should you keep your Marketplace plan? Should you switch to Medicare the moment you’re eligible? Is there ever a time when it makes sense to have both?

The answers depend on your age, income, current subsidies, and how much flexibility or provider access you want moving forward. Understanding how the two systems work—and when they overlap—can save you money and protect your access to care.

The Key Transition Point: Age 65

Medicare eligibility generally starts at age 65. For most people, this is the natural point to move away from Marketplace coverage. In fact, once you’re eligible for Medicare, you’re no longer eligible for Marketplace premium subsidies, even if you don’t enroll in Medicare right away.

That’s an important distinction. If you choose to delay Medicare enrollment without other qualifying coverage (like through an employer), you could:

• Lose your financial assistance through the Marketplace

• Face late enrollment penalties for Medicare later

• Risk a gap in coverage

So while it’s legal to keep a Marketplace plan past age 65, it’s rarely a smart financial move unless you’re not yet eligible for Medicare or have specific timing issues.

When You Might Keep a Marketplace Plan (Temporarily)

There are a few situations where keeping your Marketplace plan past age 65 can make sense—at least for a short period.

For example:

• You’re not eligible for premium-free Medicare Part A (because you didn’t pay enough into the system through work history)

• You’re under 65 and on disability, waiting for the 24-month Medicare eligibility window to begin

• You turned 65, but your spouse is younger and still needs Marketplace coverage while you switch to Medicare

• You want to delay Medicare because you’re still covered by creditable employer-based insurance

In these cases, you’ll want to be very careful about timing. A misstep could mean extra costs or denied coverage down the road.

What Happens to Marketplace Coverage When You Enroll in Medicare

Once you enroll in Medicare, your Marketplace plan no longer becomes necessary—or cost-effective. You should cancel your ACA coverage once your Medicare begins to avoid paying for redundant coverage you can’t use.

That said, you can’t retroactively cancel Marketplace coverage. You need to coordinate the end of your Marketplace plan to match your Medicare start date to avoid overlapping payments. Most people enroll in Medicare during their Initial Enrollment Period, which starts three months before the month they turn 65 and ends three months after.

It’s wise to cancel your Marketplace plan ahead of time to ensure a clean transition. If you’re covering dependents on your ACA plan, be aware that they can stay on the Marketplace plan, even as you move to Medicare.

Comparing the Cost and Coverage Trade-Offs

Switching from Marketplace to Medicare is more than a paperwork change—it’s a shift in how your healthcare is structured and paid for. Here’s how the two options compare:

Medicare may be more predictable in cost, especially if you choose a Medicare Advantage plan with bundled services. Marketplace plans can offer more flexibility early on—but often become more expensive without subsidies after age 65.

Don’t Assume Medicare Advantage Is the Only Option

When people switch to Medicare, they often default to Medicare Advantage plans because they mimic traditional health insurance structures. But Original Medicare (Parts A and B) combined with a Part D drug plan and a Medigap policy might offer more flexibility, especially if you travel or want broader provider access.

Choosing between Medicare Advantage and Original Medicare is just as important as the Marketplace-to-Medicare transition. Look at:

• Your current providers and whether they accept Medicare or are in specific Advantage networks

• Prescription needs

• Travel or part-time residency in multiple states

• Whether you want the protection of capped out-of-pocket costs (only available in Medicare Advantage)

What to Watch For During the Overlap Period

Some people may qualify for both Medicare and Marketplace coverage temporarily, especially during the transition month. But you can’t use both plans to cover the same service.

Also, if you receive premium subsidies for your Marketplace plan after you’re Medicare-eligible—even if you haven’t enrolled—you may be required to pay back those subsidies at tax time. That’s why it’s so important to notify the Marketplace when you become eligible for Medicare, not just when you enroll.

Plan Ahead: Key Timing Milestones

Here’s a quick look at the timing you should keep in mind:

• Age 64½: Start researching Medicare plans, coverage options, and cost comparisons

• 3 months before 65: You become eligible to enroll in Medicare

• Month of 65th birthday: Medicare coverage can begin if you signed up early

• 3 months after turning 65: End of your Initial Enrollment Period

• Once enrolled: Cancel your Marketplace plan to avoid overlapping coverage and charges

Giving yourself time to understand your options is the best way to avoid costly mistakes.

Where It Leads

Moving from a Marketplace health plan to Medicare isn’t just a paperwork switch—it’s a strategic shift that impacts your costs, access to care, and how your insurance actually works.

The best move is often to plan early, compare the full picture, and time your switch to avoid both gaps in care and duplicate charges. Medicare may simplify some parts of the system, but only if you choose the right type of plan—and exit the Marketplace at the right time.

Getting this right protects your health and your wallet in one of the most important financial stages of your life.