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Do You Need Health Insurance If You Have Medicare?

Do You Need Private Insurance If You Have Medicare?

You may not necessarily need private insurance if you have Medicare; however, additional coverage comes with some extra advantages. Maintaining Medicare with another type of insurance requires a process called coordination of benefits. Individuals and employees may hold the following types of insurance alongside their Medicare policy: 

  • Private Insurance: Seniors may consider private insurance if they are still working and receiving group health insurance benefits through their employer.
  • Medicaid: Some Medicaid beneficiaries enjoy dual eligibility for both Medicare and state-specific Medicaid services.
  • COBRA: If you have recently left or lost a job, COBRA offers a temporary extension of group benefits that may stay in effect alongside Medicare.
  • TRICARE: Funded by the U.S. Department of Defense, TRICARE serves active and retired military service members and their families.
  • Medicare Part D and Medigap: Both Medicare Part D and Medigap are Medicare programs, but must be purchased separately through a private insurer.

Read on to learn more about how Medicare works in conjunction with private insurance.

What Is Coordination of Benefits (COB)?

Coordination of benefits is the process by which insurers determine who pays healthcare expenses first when you have multiple policies. Coordination of benefits typically involves a primary payer and a secondary payer. In some cases, there is a tertiary payer to cover any remaining expenses. 

Remember, you must pay separate monthly premiums for each plan. 

People commonly require coordination of benefits if they have group coverage through their employer or their spouse’s employer, and also enroll in Medicare. Other examples include coordinating Medicare benefits with TRICARE, COBRA, Veterans Affairs (VA) benefits, or retiree group coverage. Medicare does not coordinate coverage with for services provided out of network.

Situations Where You May Have Multiple Payers

While some people prefer keeping multiple insurance policies to cover medical expenses, dual coverage does not provide double the benefits. Read on to learn how insurers carry out the coordination of benefits in situations where multiple payers are involved.

Private Insurance

You may still have private insurance through your employer, or you may be covered by your spouse’s private employee insurance. If you are also eligible for Medicare while you have private insurance, these two insurers must coordinate benefits to determine who pays first. 

Some employers may require you to enroll in Medicare once you become eligible at age 65.

  • If your employer has less than 20 employees… Medicare pays first, followed by your group plan.
  • If your employer has 20 or more employees… Your private insurance pays first, and Medicare pays second.

The secondary payer only covers the remaining expenses, and in some cases, this is not exhaustive. 

You may have continuation coverage through COBRA if you lose your employer-sponsored insurance. For Medicare-eligible individuals, COBRA is secondary to Medicare in paying medical expenses. 


You may qualify for Medicaid, or federal- and state-sponsored healthcare services, if you meet certain income eligibility requirements in your state. If you are also 65 or older or have a qualifying disability, you may enjoy dual-eligibility status for both Medicare and Medicaid benefits.

The coordination of benefits dictates that Medicare pays first and Medicaid pays secondarily; however, Medicaid includes expanded benefits not typically included with Original Medicare, such as home health and nursing home care. Medicaid also covers Part B premiums and Medicare deductibles, copays, and coinsurance, and provides extra help with prescription drug costs. 


TRICARE provides healthcare to active-duty and retired U.S. military service members. You may require coordination of benefits for TRICARE if you are enrolled in Medicare and are 65 or older, have a disability or qualifying condition such as end-stage renal disease, or are a dependent of an active-duty TRICARE member.   

Determining the coordination of benefits for TRICARE and Medicare depends on your military status. 

  • If you (or whoever claims you as a dependent) are on active duty… TRICARE pays first, covering expenses including Medicare deductibles and premiums. 
  • If you are not on active duty… Medicare pays first, and TRICARE acts as the secondary payer.

Part D and Medigap

Part D and Medigap operate as semi-private coverage plans, each working in tandem with Original Medicare. Part D covers prescription drugs, and Medigap offers supplemental coverage for out-of-pocket expenses associated with Medicare, such as premiums, copays, and coinsurance. Both Part D and Medigap must be purchased separately from private insurers.

You may pay a late enrollment penalty if you do not sign up for Part D during your initial Medicare eligibility period. While delaying Medigap does not impose a late fee, you may pay higher rates and be subject to medical underwriting unless you enroll when you first turn 65. Part D and Medigap benefits act as extensions of Medicare as opposed to separate payers. 

Can You Purchase Marketplace Coverage While On Medicare?

It is against the law for an agent to knowingly sell a Medicare beneficiary a Marketplace plan. This rule applies to all forms of Medicare, regardless of whether you have Original Medicare or a Medicare Advantage Plan. You may purchase Medigap if you need supplemental coverage.

The Marketplace was designed to offer coverage to individuals and families on a need basis. Since Medicare-eligible individuals can meet their healthcare needs by enrolling in a variety of Medicare programs separate from the Marketplace, they do not qualify for ACA plans. Similarly, you cannot enroll in discounted Marketplace plans if you have active employer-funded benefits. 

When Should You Drop Private Coverage For Medicare?

There are situations in which you may choose to drop private coverage and move solely to Medicare. 

You Are Turning 65 

You may choose to drop your private coverage for Medicare as you approach your initial Medicare eligibility period at age 65, or you may be required to. If you currently have group coverage through your employer, you may be forced to enroll in Medicare when you turn 65, even if you are happy with your plan, since Medicare often pays first under coordination of benefits. When you eventually retire or if you lose your job, delaying Medicare enrollment can also lead to penalties later on. 

Your Private Insurance Is Too Expensive

Medicare tends to cost less than private insurance, even for employees who might enjoy low group rates. With Medicare, you can enroll in a Medigap plan to help pay the monthly premiums, copays, coinsurance, and deductibles associated with your healthcare services. In contrast, private insurers do not offer this option. 

You Prefer the Broad Access of the Nationwide Medicare Network

Private insurance plans often encompass a more limited network of providers and specialists than a widely accepted Medicare plan. You may have a variety of advanced healthcare needs specific to seniors that a one-size-fits-all plan cannot meet through a private insurer. 

When to Keep Your Private Coverage

There are also times when you may deem it best to keep private insurance.

You Have Dependents

Keeping your private insurance is necessary if your plan also covers your dependents since Medicare only provides individual benefits. You might consider keeping your private plan if you or your spouse are enrolled in a group plan through your employer that covers your family, for example, and delaying Medicare. Remember: the coordination of benefits still depends on the size of your employer. 

You Work For a Large Corporation

Companies that employ 20+ workers tend to offer affordable group rates and pay first, before Medicare, when it comes to dual enrollment. Since Medicare would act as the secondary payer of your medical claims if you work for a large employer, you may not see an immediate need to enroll in Medicare right away; however, you should enroll anyway to avoid costly penalties later on. 

You Want to Keep Seeing Your In-Network Provider

You may be happy with your existing coverage and unwilling to switch to a new provider on the Medicare network. While no employer-sponsored coverage can be guaranteed indefinitely, if you have no plans to retire and do not mind paying late penalties for delayed enrollment, you may consider putting off enrolling in Medicare until you need alternative coverage or, better yet, enroll during your initial eligibility period as a backup plan. 

Putting It All Together

You may keep your private insurance plan and also enroll in Medicare. Many people turn 65 or become eligible for Medicare while receiving employer-sponsored benefits or COBRA, TRICARE services, or Medicaid. You may also purchase a Part D plan or Medigap to supplement your Original Medicare benefits and hold private insurance at the same time.

Private insurance and Medicare plans must coordinate benefits to determine a multiple-payer system. For group plans, larger employers pay first, and Medicare second, while smaller employers pay expenses secondarily, only after Medicare reaches its limit. The Coordination of Benefits process operates similarly for COBRA and TRICARE services. Medicare typically pays first in the case of dual eligibility for both Medicare and Medicaid programs. 


You do not pay a penalty for having both Medicare and private insurance; however, you may owe a penalty for delaying enrolling in Medicare, even if you currently have other insurance. If you do not sign up for Medicare during the initial enrollment period immediately after turning 65, you must wait until annual enrollment or qualify for a special enrollment period.   

You may go back to using only your private insurance plan without Medicare if, for example, your employer offers you group benefits after you enroll in Medicare. In most cases, however, using Medicare is the safest and most cost-effective option to keep your coverage, especially if you do not have any other insurance. Experts also advise keeping Medicare until other coverage is activated.

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You’re just a few steps away from seeing your Medicare Advantage plan options.

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