Aging off an ACA Marketplace plan at 65 is a coverage handoff, not a coverage loss, and the handoff does not happen automatically. Marketplace plans stay active until you cancel them, even after Medicare begins. The tax law behind this is Section 36B of the Internal Revenue Code, which bars the premium tax credit for any month you are eligible for premium-free Medicare Part A. In 2026 the Marketplace subsidy cliff is also back at 400% of the Federal Poverty Level, so many 64-year-olds who relied on enhanced credits already pay more than they did in 2025. A person who keeps a subsidized plan after Medicare eligibility starts will reconcile those credits on Form 8962 and repay them, and starting with tax year 2026 the old repayment caps no longer apply. This page walks through the timing, the paperwork, and the order of operations: confirm your eligibility date, enroll in Medicare during your Initial Enrollment Period, choose your Medicare coverage, then terminate the Marketplace plan so the two coverages meet without a gap or an overlap.
Most people aging off the Marketplace fall into one of four situations. Some already collect Social Security and are auto-enrolled in Parts A and B with a Medicare card mailed about 3 months before the birthday month. Others do not collect benefits yet and must enroll themselves through the Social Security Administration. A third group has a spouse under 65 who stays on the Marketplace and needs a new household application. The fourth group keeps working and has employer coverage from a company with 20 or more employees, which changes the Part B timing rules. Original Medicare in 2026 charges a $202.90 monthly Part B premium and a $283 Part B deductible, and Part A has a $1,736 inpatient deductible per benefit period in 2026. Medicare Part D drug costs are capped at $2,100 out of pocket in 2026, which often beats the drug cost sharing on a Marketplace plan. The steps below cover each situation and flag where your state rules change the answer.
7 Steps to Get Coverage
Common Mistakes That Cost People Thousands
Aging off the Marketplace in 2026 goes wrong in predictable ways:
- Leaving the subsidized Marketplace plan active after Medicare starts. Marketplace plans never end on their own, and the IRS recovers 2026 premium tax credits paid for Medicare-eligible months with no repayment cap.
- Assuming Marketplace coverage lets you delay Part B. Marketplace plans are not job-based coverage, so no 8-month Special Enrollment Period applies and the 10% per 12 months penalty starts counting.
- Canceling the Marketplace plan before Part B is confirmed. A cancellation filed too early leaves a gap in coverage when the Part B start date is the first of the month after you enroll.
- Skipping Part D or Medigap in the first 6 months. A gap of more than 63 days without creditable drug coverage triggers a lifetime Part D penalty, and Medigap insurers can charge more after the guaranteed-issue window.
- Forgetting the spouse or dependents under 65. Removing the Medicare enrollee changes household size and income on the application, so a spouse's 2026 subsidy needs a fresh calculation.
Why Marketplace Coverage Does Not Protect You From the Part B Penalty in 2026
Medicare allows a penalty-free delay of Part B only when you have group health coverage based on current employment, from your own job or your spouse's job, at an employer with 20 or more employees. Marketplace plans, COBRA, retiree coverage, and individual policies do not qualify under medicare.gov rules. That means a 65-year-old on a Marketplace plan who skips Part B during the 7-month Initial Enrollment Period starts accruing the late penalty immediately. The Part B penalty is 10% of the standard premium for each full 12-month period you could have enrolled but did not, and it lasts as long as you have Part B. At the 2026 standard premium of $202.90, a 10% penalty adds about $20.29 per month for life. Social Security enrollment through ssa.gov and the General Enrollment Period from January 1 to March 31 are the fallback, but coverage then starts the month after you sign up, which can leave months uninsured.
Premium Tax Credit Repayment After 65: Form 1095-A and Form 8962 in 2026
Marketplace enrollees who stay on a subsidized plan after Medicare eligibility begins must reconcile on Form 8962 using the Form 1095-A the Marketplace sends each January. Premium tax credits for months of premium-free Part A eligibility are disallowed under Section 36B. Before tax year 2026, repayment of excess advance credits was capped at amounts between $375 and $3,250 depending on income. The One Big Beautiful Bill Act removed those caps for tax years beginning after December 31, 2025, so the full excess is owed in 2026. A 65-year-old who received $600 per month in advance credits for 6 Medicare-eligible months would owe $3,600 for tax year 2026. Turning 65 and becoming Medicare-eligible is a qualifying life event that you must report to the Marketplace yourself, because the system does not read Social Security records. The fix is simple: end the Marketplace plan the day before Medicare starts, and check the IRS premium tax credit page at irs.gov for reconciliation rules.
Medicaid and Medicare Savings Programs for Adults 65 and Older in 2026
Medicaid for adults 65 and older uses different rules than the 138% FPL expansion line, because most states apply income and asset tests to seniors. In 2026 a Medicare Savings Program through your state Medicaid agency can pay the $202.90 Part B premium, and Extra Help can lower Part D costs. State program names differ: California's Medi-Cal, Arizona's AHCCCS, Massachusetts's MassHealth, Wisconsin's BadgerCare, and Connecticut's HUSKY Health all run Medicare-linked assistance. Apply year-round at medicaid.gov or your state agency, and use the household table below if a spouse under 65 stays on the Marketplace, since that spouse still faces the 400% FPL subsidy cliff in 2026. The 10 non-expansion states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, Wyoming) apply stricter adult rules, which makes Medicare Savings Programs even more important there. Income and asset limits for a Medicare Savings Program change each year, so confirm the 2026 numbers with your state agency before assuming you do not qualify.
Frequently Asked Questions
What is the Medicare enrollment window when I age off the ACA Marketplace at 65?
Your Initial Enrollment Period is 7 months: the 3 months before your birthday month, the birthday month, and the 3 months after. If you turn 65 on December 10, 2026, your window runs September 1, 2026 through March 31, 2027, and Medicare eligibility starts December 1, 2026. Enroll during the first 3 months to start Part B on the first day of the birthday month with no gap. Your Marketplace plan should end November 30, 2026. Apply at ssa.gov/medicare/sign-up or call 1-800-772-1213, and confirm dates at medicare.gov.
How do I cancel my Marketplace plan when I switch to Medicare?
Log in to your account at healthcare.gov or your state exchange, choose Update my application, and report your Medicare start date, which you can enter up to 3 months before Medicare begins. Select the plan to cancel with an end date of the day before Medicare starts, for example November 30, 2026 for a December 1, 2026 Medicare start. Call 1-800-318-2596 to confirm in writing. Marketplace plans do not end automatically, and unsubsidized or subsidized coverage keeps billing until you act.
What happens if I keep my subsidized Marketplace plan after Medicare starts?
Premium tax credits are not allowed for any month you are eligible for premium-free Part A under Section 36B, so the IRS recovers them when you file Form 8962. For tax year 2026 the repayment caps of $375 to $3,250 no longer apply, and the full excess is owed. For example, $600 per month in advance credits over 6 Medicare-eligible months means a $3,600 repayment. You also risk the Part B late penalty of 10% per 12-month period. The fix is to end the plan before Medicare begins.
Can I delay Part B if I stay on a Marketplace plan or COBRA?
No. Medicare grants the 8-month Special Enrollment Period only for group coverage based on current employment at an employer with 20 or more employees. Marketplace plans and COBRA do not count, so the Part B late penalty of 10% for each full 12 months of delay starts building after your Initial Enrollment Period ends. At the 2026 premium of $202.90 per month, one year of delay adds about $20.29 per month for life. Enroll in Part B during your 7-month window and keep COBRA only as a supplement if useful.
What documents do I need to switch from the Marketplace to Medicare?
Gather proof of age, your Social Security number, and your my Social Security login for ssa.gov, plus your Marketplace account login and plan member ID for the 2026 termination request. Add employer coverage details if you or your spouse still work, a prescription list and doctor names for comparing Medigap, Part D, and Medicare Advantage, and bank details for premium billing. Keep Form 1095-A from the Marketplace for tax filing in early 2027. Most online Medicare applications take about 10 minutes when documents are ready.
What if I miss my Medicare Initial Enrollment Period after aging off the Marketplace?
Medicare then limits you to the General Enrollment Period from January 1 to March 31 each year, with coverage starting the first of the month after you sign up. You would pay the Part B late penalty of 10% for each full 12 months you were eligible but not enrolled, plus possible Part D penalties, and you may spend months uninsured. Marketplace plans may be unsubsidized during that time, because premium-free Part A eligibility ends tax credits. Enroll in the 7-month window to avoid all of these costs in 2026.
What state-specific rules apply when I age off the Marketplace at 65?
Medigap rules and Marketplace portals vary by state. Massachusetts, Minnesota, and Wisconsin standardize Medigap differently from federal Plans A through N. Covered California and MNsure require you to end the plan through the state exchange rather than healthcare.gov. State Medicaid brands such as Medi-Cal, AHCCCS, and MassHealth run Medicare Savings Programs that can pay the $202.90 Part B premium in 2026. Check your state insurance department for Medigap rules and your state Medicaid agency for savings programs.
