Moving over to Medicare with private health insurance isn't as straightforward as one may think. If you intend to keep your employer coverage after enrolling in Medicare, for example, some rules may vary depending on your employer's plan. This post helps address many of these same complexities to help ensure your transition goes as smoothly as possible.

Determine your enrollment period

The first step? Determining your Medicare enrollment period. If you’ve received Social Security or Railroad Retirement Board benefits for at least four months prior to turning 65, the government will typically automatically enroll you in Medicare Parts A and B (Original Medicare) at age 65—with your Medicare card often arriving in the mail with instructions three months prior to your birthday. All other eligible folks enjoy an initial seven-month window to enroll in Medicare beginning three months before age 65 and ending three months after your birthday month (with coverage starting the first day of this month if you sign up beforehand). Enroll at a later point within the window, meanwhile, and coverage kicks in the first day of the following month. You can apply for Medicare either online or over the phone.

Learn how Medicare works alongside private health insurance

If you're under age 65, plan to extend participation in an employer-based health insurance plan (including COBRA)—even after you enroll in Medicare—given Medicare idiosyncrasies. While the latter generally acts as primary insurance (meaning healthcare bills are first submitted to Medicare with secondary insurance covering any remaining balance), employer plans act as the first payer with Medicare kicking in secondarily if you’re still on an employer group plan that covers 20+ employees or is part of a multi-employer group health plan (generally jointly sponsored by two or more employers). This is true whether you have coverage through your employer’s plan or are covered through your spouse’s. All in all, nailing down your primary plan makes it easier to manage your insurance going forward.

Decide when to enroll in Medicare

Medicare Part A

If you qualify for free Medicare Part A premiums (as most do), there’s little reason to postpone signing up as a lag can create a gap in insurance coverage for inpatient hospital, skilled nursing facility, hospice, and home health care—all covered by Part A (i.e., “hospital insurance”). That said, those who don’t qualify for free premiums or want to continue contributing to a health savings account may consider delaying Part A enrollment (enrolling in any part of Medicare disqualifies HSA contributions). Keep in mind that not buying into Part A when you’re first eligible can increase your monthly premium by 10% and task you with paying the late enrollment penalty for twice the number of years you didn’t sign up but could have (e.g., if you were eligible for two years but didn’t sign up, you’d need to pay the higher premium for four years).

Medicare Part B

Medicare Part B covers medical services and supplies necessary to treat health conditions and includes healthcare provider visits, medical equipment, and ambulance services. All Medicare participants pay a monthly premium for Part B, which isn't mandatory and most people enroll only when they lack “creditable coverage” from another source (e.g., an employer): defined as coverage at least as good as what Medicare provides, with insurers/employers advising if it qualifies as such typically around September every year. Delaying Part B enrollment doesn’t trigger a penalty, provided you enroll within eight months of losing creditable coverage or ceasing work (whichever occurs first), and you’ll want to plan ahead and enroll at least a month before you stop working or employer coverage ends to prevent a gap. Keep in mind that if you lack creditable coverage and don’t enroll in Part B, you may be required to pay a 10% monthly premium for each 12-month period you could have had Part B but didn’t.

Medicare Part C

Medicare Part C (i.e., Medicare Advantage plans) are comprehensive bundled plans that serve as an alternative to Original Medicare (Parts A and B) and are offered by Medicare-approved private companies. Existing enrollment in Parts A and B is required to qualify. Much like private health insurance, these typically function similarly to health maintenance organizations (HMOs) or preferred provider organizations (PPOs)—with the former usually requiring members to use healthcare providers within the plan’s network and service area to keep costs low and the latter allowing them to seek out-of-network care (though this flexibility often comes at a higher cost).

One primary advantage of a Medicare Advantage plan is that it offers additional coverage for services Original Medicare doesn’t cover such as vision, dental, hearing, fitness programs, home health aides, in-home safety device installation, prescription drug coverage, and additional services such as transportation to medical appointments.

If you plan to keep private insurance with Medicare, remember that a Medicare Advantage plan is usually only worth considering if your private insurance is not as comprehensive. Click here to determine if Medicare Advantage is right for you.

Medicare Part D

Medicare Part D, which helps cover the cost of brand-name and generic drugs, requires enrollment in Parts A and/or B. You can obtain Part D via stand-alone coverage or a Medicare Advantage Plan and must go through a private insurance company regulated by Medicare to do so, signing up during a designated enrollment period (e.g., the Initial Enrollment Period, Annual Enrollment Period (October 15–December 7), or Special Enrollment Period based on specific life events). While Part D isn’t relevant for those who have credible prescription coverage through a private plan, it’s important to enroll right away should you lose existing coverage to avoid a gap and avoid the penalty imposed when an enrollment delay extends past 63 consecutive days without coverage—often permanent and varies based on duration.

Medigap policies

Medicare Supplement plans (i.e., Medigap policies) are another option for those enrolled in Medicare Parts A and B. Offered through various insurance companies, these plans cover many out-of-pocket costs Original Medicare doesn’t such as copayments, deductibles, and medical expenses when you travel beyond U.S. borders (in some cases). Those interested should enroll during the initial seven-month enrollment period that begins when you sign up for Parts A and B as waiting may cost you more—or see insurers deny you coverage based on your health status. Specifics vary by state, so do your homework knowing the federal government standardizes these policies; insurance companies can only offer those from a list of standardized plans denoted by a letter (A, B, C, D, F, G, K, L, M, and N, with G and N most popular overall) and offering the exact same benefits no matter where you buy the policy from with the exception of Massachusetts, Minnesota, and Wisconsin (which standardize their plans in a different way).

Other Medicare enrollment considerations

Your income and Medicare surcharges

IRMAA (“income-related monthly adjustment amount”) is the additional amount you may need to pay alongside your premiums as Medicare imposes surcharges on higher-income beneficiaries for Medicare Parts B and D. These are calculated based on tax returns reported from two years prior, meaning your 2026 income determines your IRMAA in 2028, your 2027 income determines your IRMAA in 2029, and so on.

For those unfamiliar with IRMAA, this two-year lag can result in unpleasant surprises when you first enroll in Medicare—especially if your income declines substantially after you retire. IRMAA can also creep up later in life when you begin taking required minimum distributions (RMDs) as the additional amount is reevaluated every year based on your previous two years of income. It’s therefore important to plan for Medicare a few years before you enroll. One approach to mitigating (or even avoiding!) Medicare surcharges is to file an appeal, especially in light of a life-changing event that may qualify for IRMAA reconsideration such as:

· The death of a spouse

· Marriage

· Divorce or annulment

· Reduction of hours worked (or a complete cessation)

· Reduction in or loss of pension income (due to a default, scheduled cessation, etc.)

· Loss of income-producing property beyond beneficiary control (such as a disaster, theft, or similar circumstance)

· Settlement payment wherein you or your spouse receives a settlement from an employer (or former employer) due to said employer’s bankruptcy or reorganization

The quickest and easiest way to file an appeal is via online filing form SSA-44 on the Social Security website, but you can also do so over the phone (800-772-1213) or by contacting your local Social Security office. Note you should appeal only after receiving notice that your premiums for Medicare Parts B and D (prescription drug coverage) include IRMAA.

Medicare doesn’t cover long-term care

Per the U.S. Department of Health and Human Services, there is an almost-70% chance someone celebrating a 65th birthday today will need some type of long-term care (LTC) services in the future—with an estimated 20% requiring care for more than five years. While many people incorrectly assume Medicare covers long-term care, the truth is that it doesn’t except in very limited circumstances. Long-term care is also extremely expensive, with recent Genworth data estimating median annual home health aide costs at $77,792 (and growing!). Even for those who plan on retiring in an affordable locale such as Florida, median costs ring in at $68,640 in the Sunshine State. You do have a few options to ensure your long-term care needs are covered, though, which you can read about here.

In sum: transitioning to Medicare

With Medicare pegged as an extremely complex and dynamic program, it’s no wonder a recent Harris Poll survey reported more than 7 out of 10 future retirees (over age 50) want to better understand it! By reading this post and browsing our Medicare article library, you can take steps to feel more prepared when looking ahead to enrollment.

Have questions about Medicare? Schedule a FREE discovery call with one of our CFP® professionals to get them answered.

FAQs

You can still sign up for Medicare during the General Enrollment Period (January 1–March 31 of every year) with coverage kicking in the month after you do so. Keep in mind, however, you may be charged a late enrollment penalty if you don’t qualify for a SEP (Special Enrollment Period) allowed in light of specific life events (as mentioned earlier).
While enrolling in Medicare isn’t required if you have private insurance, you may indeed want to either way given the potential fees and coverage lapses outlined earlier.

Transitioning to Medicare With (or Without) Private Health Insurance