- If you’re turning 65 soon, you may have to choose between staying with your private insurance or switching to Medicare. This guide will help you decide which is right for your unique situation.
- Medicare interacts differently with different types of insurance. If you know when Medicare is the “primary” or “secondary” payer, it’ll help you decide whether to stay with private insurance or move to Medicare.
- Some reasons you may want to stay with private insurance include lower costs, coverage that better fits your needs, or coverage for your spouse and children.
If you’re about to turn 65, one of the biggest questions you need to answer is this:
Should you enroll in Medicare? Or should you stay with your private insurance?
Some people mistakenly think they don’t need Medicare because they already have insurance and are shocked when they get penalized for late enrollment!
Others make the mistake of automatically enrolling in Medicare when they turn 65 without comparing the numbers—and end up spending more than if they had stayed on private insurance.
It all depends on your exact situation.
There are so many nuances, that it can pay to check the actual numbers to see which is a better fit for you.
That’s why in this article, we’ll go over how Medicare coordinates with private health insurance, the costs to be aware of, and give you tips to help you decide.
What is Private Insurance?
Private insurance comes in many forms. Generally speaking, it’s any health insurance not provided by the government.
One of the most common types of private insurance is employer group plans.
Group health plans from your employer can vary from company to company. But usually, when you enroll in a group plan, your employer may pay part of your costs.
You could also get private insurance individually through the Healthcare Marketplace. But in this article, we’ll focus on employer group plans specifically.
What is Medicare?
Medicare is a health insurance program provided by the federal government primarily for older Americans. You may also qualify for Medicare if you have ESRD, ALS, or a disability, but most people enroll in Medicare once they turn 65.
According to medicare.gov, there are several parts of Medicare, each covering a different part of your healthcare.
- Medicare Part A – covers your hospital costs. Together, Medicare Part A and Medicare Part B form Original Medicare, which is provided by the federal government.
- Medicare Part B – covers your medical costs (for instance, the costs associated with a doctor’s appointment). This includes most outpatient items and services that are deemed medically necessary.
- Medicare Part D – covers prescription drugs. Medicare Part D drug plans are provided by insurance companies working with Medicare.
- Medicare Part C – Medicare Part C, also called Medicare Advantage, is optional insurance provided by insurance companies working with Medicare. Part C plans must include everything in Medicare Part A and B and usually have a Medicare Part D drug plan built into them (as well as dental, vision, and hearing coverage — and sometimes even perks like gym memberships).
You can also enroll in a Medicare Supplement (Medigap) Plan. These plans are also provided by insurance companies. Unlike Medicare Advantage Plans, Medicare Supplement (Medigap) Plans are typically limited to helping you pay for the “gaps” in Original Medicare. You can get a breakdown of the differences here:
How Medicare Works With Insurance Companies (Payers)
In order to fully understand which route is right for you between Medicare and private insurance, it helps to understand how Medicare works with other insurance:
Whenever you have Medicare and another insurance plan, one will have the “primary” responsibility of paying, and one will have the “secondary” responsibility of paying.
The primary payer will pay first, and then the bill will be passed to your secondary payer. Sometimes, there can even be three payers.
With certain types of insurance, Medicare will be the primary payer. With other types, your insurance company will be the primary payer. You can find a full list of how Medicare interacts with different insurance companies on Medicare.gov.
This can make a massive difference in how much of the bill is passed to you at the end of the day, so it pays to understand this.
Typically, if you get your health insurance from your job, and you work at a company with less than 20 employees, Medicare will become the primary payer when you turn 65.
But if you work at a company with 20 or more employees and you get health insurance through your job, your job’s insurance typically stays as the primary payer and Medicare is secondary — which means you typically can choose whether you’d like to stay on your work insurance or switch to Medicare.
This video will give you more details:
Should You Enroll in Medicare if You Have Private Insurance?
Usually, if Medicare becomes the primary payer when you’re eligible, you should enroll in Medicare.
However, if your private insurance is the primary payer over Medicare, you may be able to delay enrollment without worrying about late enrollment penalties later on.
Here’s why:
- First, if Medicare becomes the primary payer, but you don’t enroll in Medicare, you may be left without insurance coverage and high out-of-pocket risk. According to AARP, if your employer requires you to enroll in Medicare, Medicare automatically becomes your primary coverage while your employer plan provides secondary coverage. Medicare will pay first, and the group plan pays only for services it covers but Medicare doesn’t.
- Second, if Medicare is the primary payer, but you don’t enroll, you may be subject to the Medicare Part B late enrollment penalty. This is typically an extra 10% added onto your Medicare Part B premium for every year you delay. To learn more about this penalty, read our article on Medicare fees and penalties!
Again, you can visit Medicare.gov to find out whether Medicare will become the primary payer over your insurance company or not. You can also call your insurance plan to inquire.
Finally, if your insurance company pays first, and then Medicare second, you may want to consider delaying enrollment in Medicare because Medicare is not free.
Most people have to pay a premium for Medicare Part B and Medicare Part D prescription drug plans. So, things can get expensive if you have both Medicare and private insurance.
But how do you know which one is a good fit for you?
Let’s take a look at the key differences to help you decide.
Key Differences Between Medicare and Private Insurance for People Aged 65 and Over
Cost
Medicare has five types of costs you need to be aware of:
- Premiums – The amount you have to pay every month to keep your plan
- Deductibles – The amount you have to spend out-of-pocket before your plan starts covering you
- Copays – A cost-sharing method where you pay a fixed amount (ex: $20) for an item or service while your insurance pays the remaining balance
- Coinsurance – A cost-sharing method where you pay a percentage (ex: 20%) for an item or service while your insurance pays the remaining balance
- Maximum Out-of-Pocket (MOOP) – Once your out-of-pocket spending reaches the Maximum out-of-pocket limit of your plan, your insurance should cover the rest of your costs for the year
| Medicare Costs in 2026 (Medicare.gov)* | |||||
| Part A (hospital coverage) | Part B (medical coverage) | Part C (Medicare Advantage Plans) | Part D (prescription drug plans) | Medicare Supplement (Medigap) Plans | |
| Premium | $0 (for most people) | $202.90 (base premium) | Varies by plan ($18.50 average) | Varies by plan | Varies by plan |
| Deductible | $1,736 | $283 | Varies by plan | Varies by plan (Max of $615) | N/A |
| Copays and Coinsurance | Hospital stayDay 1 – 60: $0Day 61 – 90: $434/dayDay 91 – 150: $868/dayDay 150+: You pay 100% | 20% for most items and services | Varies by plan | Varies by plan, drug tier, and coverage stage | Varies by plan |
| MOOP | N/A | N/A | Varies by plan | $2,100 | Varies by plan |
*These are just some of the costs associated with Medicare. Please see Medicare.gov for the full list of costs
Meanwhile, private health insurance typically has the same types of costs (premiums, deductibles, copays, coinsurance, and MOOPs). However, the numbers vary greatly from plan to plan.
That’s why, when choosing between Medicare and private health insurance, you should review all the numbers to see which one is cheaper for you.
Dependents
Medicare covers only you, while private insurance may also cover your spouse and your children.
Medicare, whether you only have Original Medicare, a prescription drug plan, a Medicare Advantage Plan, or a Medicare Supplement (Medigap) Plan, will cover only you. Your spouse and children won’t be covered.
That’s why, if you have private insurance that also covers your spouse and children and want to keep that coverage for your family, you may want to consider staying with the private insurance.
Coverage
Medicare covers most “medically necessary” items and services. However, Original Medicare does not cover most dental, vision, and hearing care. Meanwhile, private insurance may cover these needs, depending on the plan.
Note: if you enroll in a Part C Medicare Advantage Plan, it may include coverage for dental, vision, and hearing care.
Can You Have Medicare And Private Health Insurance? How Does It Work?
While you can have Medicare AND private health insurance through your employer, this is typically not recommended since the coverage is usually not coordinated. You may end up paying for two insurance plans without getting more coverage.
That’s why it’s important to compare your private plan vs. Medicare before you turn 65. Remember to take into account the costs, coverage, and dependents of each side before you make your decision.
Conclusion
If you’re turning 65 and plan to continue working, it’s important to do your research on your private insurance vs. Medicare.
With Medicare’s penalties and “payer” rules, it’s very easy to get caught off guard and pay more than you have to!
We hope this guide points you in the right direction.
If you need more help deciding, you can call or text us at +1 877-360-6565 (TTY: 771), and our team of licensed insurance agents will be more than happy to help!
Or, if you want to learn more about Medicare costs, how and when to enroll, and how to avoid penalties and mistakes, then check out our Medicare workshop below!