As you approach age 65, Medicare eligibility brings important decisions about your health coverage. A common question we hear is:
“I already have an individual health insurance plan — can I keep it after enrolling in Medicare?”
The short answer is yes, you can, but in most situations, it’s not a wise choice. Here’s why keeping your individual insurance while enrolling in Medicare could cost you more — and may even lead to penalties.
1. You May Face Medicare Penalties
Most individual health insurance plans — including those purchased through the ACA Marketplace — are not considered “creditable coverage” under Medicare rules.
For example: if you delay enrolling in Medicare Part D (prescription drug coverage) because you believe your individual plan is enough, you could face a lifelong late enrollment penalty. This penalty is added to your monthly Part D premium and increases the longer you go without creditable drug coverage.
So, even if you sign up for Medicare Part A and B, keeping your individual plan without Part D could leave you with higher costs down the road.
2. Marketplace Plans Lose Subsidies at 65
If your current individual plan is through the Health Insurance Marketplace and you’re receiving premium tax credits (subsidies), those benefits end once you become eligible for Medicare — even if you don’t sign up for Medicare right away.
That means after turning 65, your Marketplace plan will likely become much more expensive, making Medicare the more cost-effective option.
3. Double Premiums, Less Value
Keeping individual health insurance after enrolling in Medicare usually means paying two premiums — one for Medicare (Part B and possibly Part D or Medicare Advantage) and another for your private plan.
In most cases, Medicare offers broader coverage, better provider networks, and lower overall costs compared to individual insurance. Many people also choose to add a Medigap plan or Medicare Advantage for extra benefits — often still saving money compared to keeping an individual plan.
4. When Does Keeping Individual Insurance Make Sense?
In rare situations, delaying Medicare enrollment may make sense if you’re covered by an employer-sponsored group plan (not an individual plan). If your employer has 20 or more employees, that coverage is typically considered “creditable,” and you may not need to enroll in Medicare right away.
However, if your coverage is through an individual plan, even if it seems comprehensive, it does not protect you from Medicare penalties and will almost always cost you more. The only time keeping an individual plan makes sense is if you are not eligible for Medicare at 65.
The Bottom Line
Yes, you technically can keep both your individual health plan and Medicare. But for most people, it’s not the best financial or coverage decision.
To avoid penalties, reduce costs, and ensure seamless care, it’s almost always smarter to fully transition to Medicare when you become eligible.
Need Help Making the Switch?
We specialize in guiding individuals through the Medicare transition — from evaluating whether to drop an existing plan to choosing the right Medicare coverage for your needs.
Contact us today for a free consultation and avoid the pitfalls of dual coverage.
