Am I Allowed to Have Other Insurance While on Medicare?

Yes – but for the most part seniors who are eligible for Medicare can find comprehensive and competitively priced health insurance within the Medicare framework. The expansions to the Medicare system in recent decades, most notably Medicare Part C (Medicare Advantage), has eliminated the need for many retirees to venture outside the Medicare system to find good coverage for things like eye care or dental insurance.

Some younger retirees, especially if married to a spouse who is still working, may have employer or union coverage. In those cases, you might be eligible for coverage under both Medicare and that separate policy.

Insurance Concurrent to Original Medicare

Original Medicare, or Medicare Part A and Part B, offers a limited scope of coverage for things like:



• Inpatient hospital stays
• Skilled nursing
• Hospice care
• Some types of doctors’ visits
• Outpatient care
• Necessary medical supplies

Although that coverage may appear generous, retirees do still have to cover deductibles and often steep copays, especially if they require medium to long-term care. You can read more about the out-of-pocket expenses on our recent blog detailing the limits of Medicare Part A and Medicare Part B coverage.

The two most popular additional private insurance options are Medigap insurance (Medicare Supplemental Insurance) and Medicare Part C (Medicare Advantage Plans).

Each of these are separate from the Medicare Part A and Medicare Part B insurance that all eligible retirees are automatically entitled to receive.

Medigap coverage comes from private insurance policies specifically designed to offset the high long-term copays for healthcare services like hospital stays and skilled nursing facilities. Some Medigap policies also cover additional health care costs that retirees might incur if they require care while traveling outside the U.S.

Medicare Advantage Plans are private policies that incorporate Medicare Part A, Part B and supplemental healthcare benefits, like vision and dental coverage. Because these plans are designed and sold by private companies, they come with different rules and costs as well as fewer restrictions on many types of care.

Additionally, some Medicare Advantage Plans also include Medicare Part D, or prescription drug coverage. For many retirees, finding the right Medicare Advantage Plan provides all the coverage they need to meet their ongoing healthcare requirements.

Retirees with limited sources or supplemental income in retirement may also be eligible for Medicaid in addition to Medicare Part A and B. In Arizona, these retirees could be able to enroll in Dual Special Needs Plans (D-SNPs) as a more comprehensive alternative to Medicare or Medicaid on their own.  

What Should Retirees Consider When Choosing Health Insurance?

No two seniors have identical healthcare needs, but there are a handful of concerns and variables every retiree or person nearing retirement age should consider when making their health insurance decisions:

• Current healthcare needs
• Likely future healthcare needs
• Short and long-term budget

Modern medicine has granted us significant knowledge about the aging process and the likelihood of certain types of illnesses. People who know they have a family history of diabetes, dementia or cancer should take those risks into account when making insurance decisions.

Evaluating both your current health and anticipated future needs can help guide your coverage decisions and better budget for potential increased costs later in life.

Older Americans considering their Medicare options should also pay close attention to the additional expenses beyond premiums. For many retirees relying on Medicare Part A and B, the highest costs become out-of-pocket maximums, copays and deductibles. Understanding your healthcare coverage options and your unique risks can help you choose the plan that balances current needs and future risks.

Your Decision Today Doesn’t Prevent You From Changing Coverage in the Future

While there are many benefits to planning ahead, it’s important for retirees to recognize the health insurance decisions they make in the leadup to retirement aren’t necessarily permanent. In fact, you should review and update your healthcare plan annually to ensure it continues to meet your needs.

Health insurance is a complex field with many options and considerations. Seeking advice from a trusted financial planner, like Fullerton Financial Planning in Phoenix, can provide you with personalized guidance tailored to your unique needs.

If you’d like to discuss your retirement plan, including your healthcare options, with an experienced professional, don’t hesitate to consult with one of our advisers by calling (623) 974-0300.