Alyssa Lane
Medicare is a federal insurance program for people over 65 and for certain people with disabilities or specific health conditions. Medicare is not the only option for health insurance, and some people may opt for private health insurance instead. Private health insurance is offered by private companies, while Medicare is administered by the federal government. It is possible to have both types of insurance at the same time, which is known as dual coverage. This can provide additional coverage and potentially lower out-of-pocket costs, but it can also be more complex to manage. If you are considering replacing Medicare with private health insurance, it is important to carefully review your coverage options to ensure you are getting the best possible coverage for your needs.
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What You'll Learn
Medicare and private insurance together
Medicare is a public health insurance programme provided by the government. It is possible to have both Medicare and private insurance at the same time. This can occur if you have coverage through an employer, your spouse's employer, or COBRA. If you have both, a process called "coordination of benefits" determines which insurance provider pays first. This provider is called the "primary payer". The primary payer pays for any covered services until the coverage limit is reached. The other provider is called the "secondary payer" and pays for costs that the primary payer does not cover. However, the secondary payer may not cover all the remaining costs, in which case you may be responsible for the remaining balance.
Medicare Supplement Insurance (Medigap) is extra insurance that you can buy from a private company to help pay your share of costs in Original Medicare. Generally, you need Part A (Hospital Insurance) and Part B (Medical Insurance) to buy a Medigap policy. Some Medigap policies offer coverage when you travel outside the US. However, they generally do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. If you are under 65, you may not be able to buy a Medigap policy, or you may have to pay more.
The number of employees in a company can determine whether Medicare or the group health plan pays first. If you are 65 or older and your company has 20 or more employees, your group health plan pays first. If there are fewer than 20 employees, Medicare pays first. If you have a disability or ALS, and your company has 100 or more employees, your group health plan pays first. If there are fewer than 100 employees, Medicare pays first. If you have ESRD, your group health plan pays first during a 30-month coordination period, regardless of the company's number of employees or whether you are retired.
If you have questions about who pays first or if your coverage changes, you can call the Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY: 1-855-797-2627). It is important to tell your doctor and other healthcare providers about any changes in your insurance or coverage when you get care.
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Medicare Supplement Insurance (Medigap)
Medicare is the federal health insurance program for people who are 65 or older, but it can also cover younger people with disabilities or those with specific diseases. There are two main ways to get your Medicare coverage: Original Medicare and Medicare Advantage.
Medicare Supplement Insurance, or Medigap, is extra insurance that you can buy from a private health insurance company to help pay your share of out-of-pocket costs in Original Medicare. Generally, you must have Original Medicare, which includes Part A (Hospital Insurance) and Part B (Medical Insurance), to buy a Medigap policy. Medigap plans are sold by private insurance companies, like Blue Cross and Blue Shield (BCBS), and are designed to assist with out-of-pocket costs (e.g. deductibles, copays, and coinsurance) not covered by Parts A and B. These plans are available across the United States and can vary in terms of premiums and enrolment eligibility.
Medigap policies are standardized, and in most states, they are named by letters, like Plan G or Plan K. The benefits offered in each lettered plan are the same, regardless of the insurance company. The price is the only difference between policies with the same letter sold by different companies. Some Medigap policies offer coverage when you travel outside the US, and some cover emergency foreign travel services. However, generally, Medigap policies do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. If you are under 65, you may not be able to buy a Medigap policy, or you may have to pay more.
Medigap coverage usually has no network limitations and is available anywhere that accepts Medicare. Once enrolled in a plan, it renews annually as long as you pay your premium and the plan is available. All Medigap plans require that you continue to pay your Part B premium and a separate premium for Medigap coverage. It is important to note that if you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to its limit, then sends the remaining balance to the "secondary payer". If the secondary payer does not cover the remaining balance, you may be responsible for the remaining costs.
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Medicare Advantage Plans
If you have Medicare and other health insurance, such as from an employer or union, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage and then sends the rest of the balance to the "secondary payer". If the secondary payer does not cover the remaining balance, you may be responsible for the remaining costs.
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Medicare Part A and Part B
Medicare is federal health insurance for anyone aged 65 and older, as well as some people under 65 with certain disabilities or conditions. Original Medicare includes Part A and Part B.
Medicare Part A (Hospital Insurance) covers inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. Part A is free if you worked and paid Medicare taxes for a minimum of 10 years. You may also be eligible because of your spouse's work. If you are not eligible for premium-free Part A, you will have to pay a premium for this coverage. To be eligible for premium-free Part A, you must be entitled to receive Medicare based on your own earnings or those of a spouse, parent, or child.
Medicare Part B (Medical Insurance) covers outpatient care and is available to the same individuals as Part A. Most people pay a monthly premium for Part B, the amount of which depends on their income level.
Once you have signed up for Part A and Part B, you can choose how you get your health coverage. You can use any doctor or hospital that accepts Medicare, anywhere in the US. You can also shop for and buy supplemental coverage to help pay your out-of-pocket costs. Medicare Advantage is a Medicare-approved plan from a private company that offers an alternative to Original Medicare for your health and drug coverage. These "bundled" plans include Part A, Part B, and usually Part D, which covers prescription drug costs.
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Medicare drug coverage
Medicare is a government-provided health insurance plan for individuals aged 65 and above. It also covers younger people with disabilities or those suffering from End-Stage Renal Disease (permanent kidney failure treated with dialysis or a transplant).
There are two main ways to obtain Medicare drug coverage:
- Medicare Advantage Plan (Part C): This is a comprehensive plan that includes Part A (Hospital Insurance), Part B (Medical Insurance), and Medicare drug coverage (Part D) in a single package. To enrol in a Medicare Advantage Plan, you must already have Part A and Part B. Typically, your drug coverage will be included in this plan. However, if your plan doesn't include Part D, you can join a separate Medicare drug plan without losing your current health coverage.
- Separate Medicare Drug Plan: If you have Original Medicare, you can choose to add drug coverage by enrolling in a separate Medicare drug plan. However, if you are enrolled in most types of Medicare Advantage Plans, you cannot join a separate Medicare drug plan.
It is important to note that Medicare Supplement Insurance (Medigap) does not typically cover prescription drugs. Medigap is an additional insurance purchased from a private company to help pay your share of costs in Original Medicare. While some Medigap policies offer coverage for other services, they generally do not include prescription drug coverage.
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Frequently asked questions
Yes, you can get a Marketplace private health plan instead of Medicare. However, if you already have Medicare, you don't need to do anything as it is not a part of the Health Insurance Marketplace. You can also have both Medicare and private health insurance at the same time, which is known as "dual coverage".
Unlike private health 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 with a similar income. Anyone who qualifies for Medicare can enrol, and there are no exclusions for pre-existing conditions.
If you are paying a premium for Part A (Hospital Insurance), you can drop Part A and Part B (Medical Insurance) and get a Marketplace plan. If you are eligible for Medicare but haven't signed up, you can also get a Marketplace plan.
Yes, you can have both Medicare and private health insurance at the same time, which is known as "dual coverage". This can provide additional coverage and potentially lower out-of-pocket costs, but it can also be more complex to manage your benefits and claims.
