The Affordable Care Act is separate from both Medicare and Medicaid, though all three are government health programs

The Affordable Care Act (ACA), often called Obamacare, is not Medicare and not Medicaid. It is a different program with different rules, different costs, and different may be able to access. The confusion is understandable — all three are federal health programs — but they work in completely separate ways.

Medicare is for people 65 and older, regardless of income. Medicaid is for people with lower incomes, regardless of age. The ACA is a marketplace where people under 65 can buy health insurance directly, often with financial help based on their income. If you are already on Medicare, the ACA does not explore to you. If you are on Medicaid, you are not shopping on the ACA marketplace.

Key Takeaways

  • The Affordable Care Act created a marketplace where people under 65 can buy health insurance, separate from Medicare (age 65+) and Medicaid (low income).
  • ACA plans come with monthly premiums, deductibles, and copays that vary by plan, unlike Medicare which has its own cost structure.
  • Some people may have access to for both Medicaid and the ACA marketplace at the same income level, but they cannot use both at the same time.
  • If you turn 65, you move from the ACA marketplace to Medicare — you do not stay on an ACA plan.

How the Affordable Care Act marketplace works

The ACA created Healthcare.gov, a website where people under 65 can shop for health insurance plans and see what they might pay each month. You enter your income, household size, and zip code. The site then shows you plans from private insurance companies and tells you how much financial help you might receive to lower your monthly premium.

You pay a monthly premium to the insurance company. You also pay a deductible (the amount you pay out of pocket before insurance kicks in), copays for doctor visits, and coinsurance for hospital stays or procedures. These costs vary widely depending on which plan you choose. Unlike Medicare, which is run by the federal government, ACA plans are sold by private insurers.

The financial help — called subsidies or tax credits — is based on your income. If your income is between 100% and 400% of the federal poverty level, you may receive help paying your monthly premium. The lower your income within that range, the more help you receive. This help is not available on Medicare or Medicaid.

Who qualifies for each program

Medicare is automatic at 65. You do not need to prove low income. You do not need to shop on a marketplace. You enroll during a specific window, and Medicare begins on the first day of the month you turn 65 (or the month after, depending on your birthday). If you are already on Medicare, you cannot use an ACA plan instead.

Medicaid is for people with lower incomes. The income limit varies by state — some states cover people earning up to 138% of the federal poverty level, others use different thresholds. If you are on Medicaid, you do not pay a monthly premium, and your out-of-pocket costs are usually very low or zero. You cannot be on both Medicaid and an ACA plan at the same time.

The ACA marketplace is for people under 65 who do not have health insurance through an employer and do not may have access to for Medicare or Medicaid. You can also use the marketplace if you have an employer plan but want to shop for something different, though you would lose any employer contribution to your premium.

What happens if you are on the ACA and turn 65

When you turn 65, you must enroll in Medicare. Your ACA plan will end. You have a window of time — usually starting three months before your 65th birthday — to sign up for Medicare Part A (hospital insurance) and Part B (doctor and outpatient care). If you delay, you may face a permanent penalty on your Medicare premiums.

Some people worry they will lose coverage during the switch. In practice, your ACA plan typically ends on the last day of the month before your Medicare begins, so there is no gap. However, you need to enroll in Medicare during the correct window to make sure this happens smoothly. If you miss the window, contact Social Security or Medicare directly to enroll as soon as possible.

Can you use the ACA marketplace if you also receive Medicaid

If your income is low enough to may have access to for Medicaid in your state, you cannot use the ACA marketplace at the same time. You must choose one or the other. In most cases, Medicaid is the better choice because it has no monthly premium and very low out-of-pocket costs. However, if your state has not expanded Medicaid and your income is just above the Medicaid limit, you may be able to use the ACA marketplace and receive a subsidy to help pay your premium.

This situation — being caught between Medicaid and the ACA — happens in states that have not expanded Medicaid. If you are in this position, contact your state Medicaid office or call 211 to understand your options. The rules are complex and vary by state.

How to find out which program you might use

Start by visiting Healthcare.gov. Enter your information, and the site will tell you whether you appear to may have access to for Medicaid, an ACA plan with a subsidy, or an ACA plan without a subsidy. You do not have to buy anything — this is just information.

If the site says you may have access to for Medicaid, you will be directed to your state Medicaid office to complete that process. If it says you may have access to for an ACA plan, you can browse plans and see your actual monthly costs before you decide to enroll.

If you are already 65 or older, you will not see ACA plans on Healthcare.gov. Instead, you should be on Medicare. If you are not yet enrolled in Medicare and you are 65 or older, contact Social Security or Medicare directly at 1-800-MEDICARE.

Common reasons people confuse these three programs

All three programs use the word "health insurance" and are run by the federal government, which creates confusion. But they are fundamentally different. Medicare is earned through work history and age. Medicaid is based on income and is run partly by states. The ACA is a marketplace where you shop and pay a monthly premium, with help available based on income.

Another source of confusion: the ACA did expand Medicaid in many states, so some people think the ACA and Medicaid are the same thing. They are not. The ACA created the marketplace and the rules for subsidies. Medicaid is a separate program that existed before the ACA and continues to exist independently.

Frequently Asked Questions

If I am on Medicare, can I also use the ACA marketplace?

No. Once you are on Medicare, you cannot use an ACA plan. Medicare is your health insurance. If you want to change your coverage, you would switch between different Medicare plans (like Original Medicare to a Medicare Advantage plan), not to the ACA marketplace.

Does the ACA replace Medicare or Medicaid?

No. The ACA created a new marketplace for people under 65 who do not have other coverage. It did not replace Medicare or Medicaid. All three programs exist and operate separately. Some people on Medicaid may have benefited from Medicaid expansion under the ACA, but that is different from saying the ACA replaced Medicaid.

What if my income changes and I am on an ACA plan?

You can report the change to Healthcare.gov, and your subsidy will be recalculated. If your income drops enough, you may become may be able to access for Medicaid instead. If your income rises, you may receive less subsidy or none at all. Changes in income are one of the main reasons people switch between programs during the year.

Is the ACA free like Medicaid?

No. ACA plans have a monthly premium, even with a subsidy. Medicaid typically has no monthly premium. However, ACA plans with subsidies can be affordable — some people pay $0 to $50 per month depending on their income and the plan they choose. You would need to check Healthcare.gov to see what your actual cost would be.

Can I use the ACA if I am self-employed?

Yes. Self-employed people often use the ACA marketplace because they do not have an employer plan. You would visit Healthcare.gov, enter your expected income for the year, and shop for plans. You may receive a subsidy based on your income. You would also be able to deduct part of your ACA premium on your taxes.