Can I Go Without Medicare and Get Private Health Insurance Instead?

Pamela Cannaday by Pamela Cannaday | Licensed since 2011
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This article was updated on: 07/05/2018

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There are complex rules that govern your health care coverage under Medicare and private insurance, so it’s important to know your rights and responsibilities, as well as applicable laws, before you decide whether to drop Medicare and sign up for private health insurance. Here are some things you should know.

Can I buy private health insurance on the Health Insurance Marketplace instead of signing up for Medicare?

The rules are somewhat different depending on whether you’ve already signed up for Medicare, or you’re eligible for the program but not yet enrolled.

It’s illegal to sell an Individual Marketplace Qualified Health Plan (or an individual market policy outside the Marketplace) to a Medicare beneficiary. If you’re still working or your spouse is working, you may be able to purchase a plan under the Small Business Health Options Program (SHOP) Marketplace.

However, if you are eligible to enroll in Medicare, but not currently signed up for either Original Medicare (Part A and Part B) or a Medicare Advantage plan, you may be able to get private health insurance. There are a few things to consider, however, before you make your decision between Original Medicare (Part A and Part B) and private insurance:

  • If you do not enroll in Medicare during your Initial Enrollment Period* when you first become eligible, you may have to pay a late-enrollment penalty with your monthly premiums when and if you eventually do sign up for Medicare.
  • After your Initial Enrollment Period expires, in most cases you will only be able to enroll in Medicare during the General Enrollment Period each year (January 1 through March 31) and your coverage won’t start until July 1st of that year, which means you might go without health insurance coverage for several months.

Also, be aware that many people are enrolled into Original Medicare automatically when they become eligible, so if you need to decide what you want to do before you qualify for Medicare.

If I currently have Medicare, can I drop it and get private health insurance instead?

In some cases, private health insurance premiums may be cheaper than Medicare, especially if you do not qualify for premium-free Part A. Two very important things to keep in mind:

  • If you pay a premium for Part A, you can drop it (along with your Part B coverage) and enroll inprivate health insurance. However, if you change your mind and want to return to Medicare later, you may pay late-enrollment penalties with your monthly premiums and may have to wait until the Medicare General Enrollment Period (January 1- March 31 each year), which means you may have several months during which you have no health insurance coverage.
  • If you have premium-free Part A and you drop it to buy private health insurance, you must also drop your retirement benefits under Social Security or the Railroad Retirement Board, pay back the benefits you’ve already received, and reimburse Medicare for any costs.

What if I get private health insurance through my or my spouse’s employer?

Do you have employer coverage through your own work or your spouse’s work? Your decision to enroll in Medicare as soon as you are eligible could depend on the size of your or your spouse’s employer. If the employer you’re covered by has fewer than 20 employees, Medicare generally pays first before the other coverage. In this case, you should sign up for Medicare Part A and Part B when you’re first eligible.

If the employer has 20 or more employees, the group health plan generally pays first before other coverage. For businesses with more than 20 employees, you also may be able to delay enrolling in Medicare without a penalty and be covered only by your employer. Employers with 20 or more employees must offer current employees 65 or older the same health benefits under the same conditions that they offer employees under 65. Your employer generally cannot rescind health benefits because you become eligible for Medicare at 65.

Can I have Medicare and private health insurance at the same time?

Original Medicare (Part A and Part B) is usually not your only coverage option with Medicare. If you’re eligible for Original Medicare, you may also be eligible for certain Medicare plan options. These plans might include:

  • Medicare Supplement, which may help cover Original Medicare’s out-of-pocket costs, such as deductibles, coinsurance amounts, and copayments
  • Medicare Advantage, which is another way to get your Original Medicare benefits and may include additional benefits. Some of these plans include prescription drug coverage.
  • A stand-alone Medicare Part D Prescription Drug Plan, which might cover your prescription drugs

While the premiums may be set by the insurance companies, certain rules covering these plans are set my Medicare. Medicare Advantage plans and stand-alone Medicare Part D Prescription Drug Plans are offered by insurance companies that contract with Medicare.

Want to know more about Medicare and private insurance?

I am happy to give you more information and answer your questions. If you prefer, you can schedule a phone call or request an email by clicking on the buttons below. You can also find out about Medicare plan options in your area by clicking the Compare Plans button.

*The Medicare Initial Enrollment Period typically begins three months before the month you become eligible for Medicare, includes that month, and continues for three more months, for a total of seven months.

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