If you have Obamacare and you are about to turn 65, this is one of the most important changes to your health coverage. Your Marketplace plan worked well until now, but at 65 almost everyone needs to switch to Medicare. Doing it at the right time keeps you from lifelong penalties and gaps in coverage. Here we explain, using official government sources, what happens to your plan, when to enroll, and how to cancel Obamacare on time.
Why almost everyone moves from the Marketplace to Medicare at 65
A Marketplace plan and Medicare are two separate systems. Once your Medicare begins, you are no longer eligible for the tax credits that lower your Marketplace premium. According to HealthCare.gov, people with Medicare cannot use the premium tax credit, so keeping a Marketplace plan after Medicare starts leaves you paying the full premium with no help.
For most people, Medicare becomes the main coverage at 65. Part A (hospital) is usually free if you or your spouse worked and paid Medicare taxes long enough, and Part B (medical) covers doctor visits and outpatient services.
The Initial Enrollment Period: your 7-month window
Medicare gives you an Initial Enrollment Period (IEP) that lasts 7 months. According to Medicare.gov, it starts 3 months before the month you turn 65, includes your birthday month, and ends 3 months after.
- The 3 months before: if you enroll during this window, your coverage can start on the first day of the month you turn 65.
- Your birthday month and the 3 months after: you can still enroll, but your coverage start date is pushed back, which can leave you with a gap.
Enrolling early, in the first months of your window, is the safest way to connect Medicare and your exit from Obamacare with no interruption.
Marketplace subsidies end when Medicare begins
This is the point that causes the most confusion. The Marketplace tax credit does not carry over or continue once your Medicare Part A begins. HealthCare.gov warns that if you keep getting Marketplace financial help after Medicare starts, you may have to pay back some or all of that subsidy when you file your federal taxes.
That is why it is so important to tell the Marketplace to stop the financial help as soon as your Medicare begins. If your Medicare starts on May 1, for example, you can update your Marketplace application as early as February to coordinate the transition.
Lifelong penalties for enrolling late
Putting off Medicare without a valid reason can cost you money every month, for the rest of your life.
Part B penalty
According to Medicare.gov, if you do not sign up for Part B when you are supposed to and you do not have other valid coverage, a 10% penalty is added to your premium for each 12-month period you could have had it but did not. That penalty lasts for as long as you have Part B.
Part D (drug) penalty
Drug coverage has a penalty too. Medicare.gov explains it is calculated by multiplying 1% of the national base premium by each full month you could have had drug coverage but did not (without other creditable coverage). Like Part B, it is added to your premium for as long as you have the plan.
How to cancel your Obamacare plan on time
The Marketplace plan does not cancel itself. You have to end it so it lines up with the start of your Medicare:
- Confirm the exact date your Medicare begins.
- Log in to your Marketplace account and set your plan to end the day before Medicare starts.
- Ask for the financial help (the tax credit) to stop on that same date.
Lining up these dates keeps you from paying for two plans at once and from having to repay subsidies.
The exception: if you keep working with employer coverage
Not everyone has to switch to Medicare right at 65. If you or your spouse are still working and have employer health coverage that counts as valid, you may be able to delay Part B without a penalty. Medicare.gov explains that once you stop working or lose that coverage, you get an 8-month Special Enrollment Period to sign up for Medicare without a penalty.
Every situation is different, especially if your employer plan is small or you have retiree coverage. Before you decide, it is worth reviewing your specific case.
Need help making the switch without mistakes?
The move from Obamacare to Medicare has deadlines and rules that change with your situation. A mistake with the dates can cost you a lifelong penalty or a gap with no coverage. At the Enrollment Center we guide you through every step, at no cost to you and in your language.
Get free guidance to switch to Medicare at 65 and review your options with an advisor.
Keep learning
- Help Paying for Medicare: Extra Help and the Medicare Savings Programs (MSP)
- Switching from Medicare Advantage to Medigap in 2026
- Medicare Advantage benefit cuts in 2026
Frequently asked questions
Can I keep my Obamacare plan after I turn 65?
You can legally keep a Marketplace plan, but once your Medicare Part A begins you lose the tax credit that lowers your premium. That leaves you paying the full premium, and if you keep getting financial help you may have to repay it at tax time. For almost everyone, switching to Medicare is the better choice.
When exactly should I sign up for Medicare?
During your 7-month Initial Enrollment Period: the 3 months before the month you turn 65, your birthday month, and the 3 months after. Signing up in the first 3 months helps your coverage start the day you turn 65, with no gap.
What happens to Marketplace subsidies when Medicare starts?
They end. People with Medicare are not eligible for the Marketplace premium tax credit. If you do not stop that help on time, HealthCare.gov warns you may have to repay some or all of the subsidy you received while you had both types of coverage.
How much does it cost to enroll in Part B late?
The Part B penalty adds 10% to your premium for each full 12-month period you could have had it but did not enroll. That amount is added to your premium for as long as you have Part B, meaning for life.
I am still working at 65 with employer insurance. Do I still need to enroll?
Maybe not right away. If your employer coverage is valid, you can delay Part B without a penalty. When you stop working or lose that insurance, you get an 8-month Special Enrollment Period. It is worth reviewing your case, since the rules change with the size of the employer.
Who can help me cancel Obamacare and switch to Medicare?
At the Enrollment Center we help you line up the dates, enroll in Medicare, and end your Marketplace plan with no gaps or penalties. The guidance is free. You can request help here.
