What Obamacare Means to You If You Are Retired and Over 65

If you’re an American citizen, permanent resident and have paid Medicare taxes for 10 or more years, or have a spouse who has, then you’re covered by Medicare, the federal health insurance program for people 65 and older.

Is the exchange for me? No. Once you turn 65 it's goodbye private insurance and hello Medicare. 

What else do I need to know? If you're retired, but not yet 65, you can shop on the exchange to make sure you're insured until you’re eligible for Medicare. Depending on your income, you may qualify for Medicaid or a tax credit to help pay for coverage. 

The tax credit you get when you shop on the exchange is based on how much you make and is used to help pay for your insurance. You can use the credit as a deduction from your monthly insurance costs or as an annual deduction at tax time. Expect to pay between 2 percent (minimum) and 9.5 percent (maximum) of your income for insurance if your earnings fall into any of the below ranges. 

  • $11,490 - $45,960 for a single person
  • $15,510 - $62,040 for a family of two
  • $19,530 - $78,120 for a family of three
  • $23,550 - $94,200 for a family of four

If you have any kids under 26, you can keep them on your private insurance until you turn 65. Once you enroll in Medicare, your kids aren't eligible for coverage regardless of their age.

What if I don’t buy coverage? You’ll pay a tax penalty of either 1 percent of your income or $95 per adult and $47.50 per child for the year, whichever is higher. In 2016, the penalty increases to 2.5 percent of income or $695, whichever is higher. Plus, anyone without health insurance will have to pay the full cost of medical care should they need it. You won’t have to pay a penalty for not having insurance if you fall into one of these categories.

  • You qualify for Medicaid but your state didn't expand the program

  • Your state’s health exchange doesn't have a plan you can afford (costs less than 8 percent of earnings)

  • You spent less than three months without coverage

  • You’re a member of a recognized religious group with objections to insurance and government programs, including Social Security and Medicare

    For more on who is exempt visit Healthcare.gov.

Now, use our tool to figure out how much a new health insurance plan will cost plus learn about important dates and coverage in your state.

Go back to the Completely Painless Guide to What Obamacare Really Means for You

Sources: The Kaiser Family Foundation, the U.S. Small Business Administration, Centers for Medicare and Medicaid Services, the U.S. Internal Revenue Service, the Health Insurance Marketplace, U.S. Census Bureau and the UC Berkeley Labor Center.

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