Can I go without Medicare and get private health insurance instead?

Last Updated : 08/29/20196 min read

What if you still have private insurance when you become eligible for Medicare? You might be covered under an employer’s plan, for example, or your spouse’s plan.

If you are considering skipping Medicare in favor of private health insurance, here’s what you should know about health insurance alternatives before you decide.

Find affordable Medicare plans in your area

Is Medicare private health insurance?

Medicare is a government insurance program for eligible people age 65 years and older, and those under 65 who are eligible due to disabilities. This program is not private insurance. Although Medicare is considered an entitlement, workers actually pay for their coverage through taxes on wages. In other words, you probably paid for Medicare during your working years even if you choose not to enroll.

Although traditional Medicare (Part A and Part B) is a government program, you can actually get these benefits through private insurance companies contracted with Medicare. We’ll get to that a bit later.

What is the difference between Medicare and private insurance?

Unlike private insurance, the Medicare program is administered by the federal government. Benefits, premiums, and cost-sharing structures are decided at the federal level and are generally the same for everyone of similar income. Anyone who qualifies for Medicare can enroll; there are no exclusions for pre-existing conditions.

Private health insurance, of course, is offered by private insurance companies. Major medical plans may need to comply with the Affordable Care Act of 2010. Still, private insurance companies have some flexibility – for example, when it comes to cost-sharing.

Medicare coverage through private health insurance

Some optional Medicare coverage is available through private health insurance. Medicare-approved private insurance companies contract with Medicare to offer this coverage.

  • Medicare Advantage plans provide your Medicare Part A and Part B benefits through private, Medicare-approved health insurance company. You’re still enrolled in Medicare, but the Medicare Advantage plan administers your benefits. The plan sets its premiums, deductible, and coinsurance/copayment amounts.

Most Medicare Advantage plans include prescription drug coverage, and many have extra benefits, like routine dental care. Read more about Medicare Advantage plan benefits.

You’ll still pay your Medicare Part B premium, as well as the plan premium. Some Medicare Advantage plans have monthly premiums as low as $0.

  • Stand-alone Medicare Part D prescription drug plans provide prescription drug coverage. Medicare Part A and Part B typically don’t cover medications you take at home. Private health insurance plans contract with Medicare to deliver this coverage. You can learn more about Medicare Part D and the out-of-pocket costs to expect.

You might also want to learn about Medicare Supplement insurance. This is optional, supplemental coverage that works alongside your Medicare Part A and Part B coverage. It’s sold by private health insurance companies.

Medicare Supplement insurance companies may cover your Medicare Part A and Part B out-of-pocket costs, like coinsurance, copayments, and deductibles. Here’s more information about Medicare Supplement insurance.

Find affordable Medicare plans in your area

Find Medicare plans in your area

Do I have to sign up for Medicare as soon as I qualify?

Many people are enrolled automatically in Medicare when they become eligible. Some people are not automatically enrolled. You might not have to enroll in Medicare, but you may want to make sure you have coverage through a private health insurance plan.

If you have private insurance through your job, you should enroll in Medicare when you’re first eligible. If your employer has fewer than 20 employees, Medicare is usually the primary insurer. In other words, Medicare generally pays first and your private health insurance may pay what Medicare doesn’t cover.

With larger employers, you might have the option of delaying Medicare in favor of your private insurance.

It’s a good idea to talk to your employer before you turn 65 to see what your health insurance alternatives are. Some employer-based private health insurance plans adjust coverage for Medicare-eligible employees.

What happens if I don’t sign up for Medicare when I’m first eligible?

If you wait to enroll in Medicare Part A and/or Part B, you might pay a late enrollment penalty.

Medicare Part B: The penalty is 10% of the standard Part B premium for each year you could have had Medicare but didn’t enroll. So if you waited two years to sign up for Medicare, you might pay a 20% higher premium than everyone else for as long as you have Medicare.

Medicare Part A: Most people qualify for premium-free Part A, so you likely won’t pay a Part A late enrollment fee if you wait to sign up. However, if you don’t qualify for premium-free Part A and you delay enrollment, you may pay 10% more for your Part A and premium. You pay this penalty for two times the number of years you could have been enrolled in Part A.

Suppose you decide to use private health insurance alternatives and delay signing up for Medicare Part D prescription drug coverage. You might have to pay a Part D late enrollment penalty. If your private health insurance doesn’t meet the Medicare requirements for creditable prescription drug coverage, you might pay a penalty added to your Part D premium when you do enroll in a plan. Prescription drug coverage is optional, but if you delay it you could face the penalty.

Can I choose a private insurance plan on the marketplace instead of Medicare?

It’s against the law for someone to sell private health insurance on the marketplace to you if you have Medicare.

You may be able to buy private health insurance instead of Medicare if you are younger than 65 and qualify for Medicare due to disability or end-stage renal disease (ESRD). In this case, you can choose private health insurance or Medicare. But once you apply for Medicare, you might not be able to buy certain private health insurance alternatives.

You can generally sign up for a Medicare Advantage plan or a stand-alone Medicare Part D prescription drug plan. In some states, you might be able to buy a Medicare Supplement plan before age 65. Medicare Supplement insurance plans don’t work with Medicare Advantage plans.

Would you like to explore Medicare coverage options in your area? It’s easy – just type your zip code in the box on this page to begin comparing plans anytime.

The product and service descriptions, if any, provided on these Medicare.com Web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.

Find affordable Medicare plans in your area

See all About Medicare articles >

Find and compare Medicare plans and save up to $531/year*

Compare Plans Now

Have a question? Talk to a licensed insurance agent.

  • 1-844-847-2659 TTY Users 711
  • Mon - Fri, 8am - 8pm ET