Medicare is a form of health insurance, but it’s not the same as the health insurance most people get through a job or buy on the marketplace. Medicare is a federal program that provides coverage specifically for people 65 and older and certain younger people with disabilities. Private health insurance, by contrast, is sold by companies and is available to people of all ages, often as an employer benefit. The two overlap in purpose but differ significantly in who qualifies, what’s covered, how much you pay, and how you use them.
How Medicare Differs From Private Insurance
Private health insurance is sold and managed entirely by insurance companies. You typically get it through your employer, who pays a portion of the premium, or you buy it yourself on the federal Healthcare Marketplace. Anyone can enroll regardless of age, and plans come in tiers (bronze, silver, gold, platinum) that let you trade off between monthly premiums and how much the plan covers when you need care. A bronze plan covers about 60% of costs with lower premiums, while a platinum plan covers 90% with higher premiums.
Medicare is run by the federal government and is only available to people who meet specific eligibility criteria. You qualify at age 65, or earlier if you’ve received Social Security disability benefits for 24 months, have permanent kidney failure requiring dialysis or a transplant, or have ALS (Lou Gehrig’s disease). Unlike private insurance, you don’t choose a coverage tier. Original Medicare has one standard benefit package and typically pays 80% of covered services at facilities that accept Medicare-approved rates.
The Parts of Medicare
Medicare is split into distinct parts, each covering a different category of care. This structure has no real equivalent in private insurance, where a single plan usually bundles everything together.
- Part A (Hospital Insurance) covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
- Part B (Medical Insurance) covers doctor visits, outpatient care, preventive services like screenings and vaccines, durable medical equipment such as wheelchairs and walkers, and home health care.
- Part C (Medicare Advantage) is a private insurance alternative to Original Medicare. These plans are sold by insurance companies but approved by Medicare, and they must cover at least everything Parts A and B cover. Most also include prescription drug coverage.
- Part D (Drug Coverage) is a separate plan you can add to Original Medicare to help pay for prescription medications.
Parts A and B together make up “Original Medicare,” which is the government-administered version. If you want prescription drug coverage or extras like dental and vision, you need to add on Part D or supplemental plans.
What Original Medicare Doesn’t Cover
One of the biggest surprises for people transitioning from private insurance to Medicare is how many common services Original Medicare excludes. It does not cover most dental care, including cleanings, fillings, extractions, and dentures. Eye exams for prescription glasses aren’t covered. Neither are hearing aids or the exams to fit them. Long-term care, routine physical exams, cosmetic surgery, and massage therapy are also excluded.
Many private insurance plans include at least some dental, vision, and hearing benefits. If you’re used to that level of coverage, switching to Original Medicare alone will feel like a downgrade in those areas. This is one reason many people either choose a Medicare Advantage plan (which often adds dental, vision, and hearing benefits) or buy supplemental insurance.
Medicare Advantage vs. Original Medicare
Medicare Advantage plans are sold by private insurers, so in some ways they feel more like traditional health insurance. They must cover everything Original Medicare covers, but they often add extras like dental, vision, and hearing care. They also include an annual out-of-pocket maximum, which Original Medicare lacks.
The tradeoff is restrictions. Medicare Advantage plans typically require you to use in-network doctors and get referrals before seeing specialists. Original Medicare lets you see any provider in the country who accepts Medicare, with no referrals needed. If you travel frequently or live in a rural area with limited networks, that flexibility matters.
You can’t have both a Medicare Advantage plan and a Medigap (supplemental) plan at the same time. You choose one path or the other.
Filling the Gaps With Medigap
Medigap plans are supplemental policies sold by private insurers that help cover out-of-pocket costs left over after Original Medicare pays its share. Things like copayments, coinsurance, and deductibles. You pay a separate monthly premium for a Medigap plan on top of your Part B premium, but the result is fewer surprise bills.
Medigap policies are standardized, meaning a Plan G from one company covers the same things as a Plan G from another. They work with any doctor or facility that accepts Medicare, in any state. Each person needs their own policy, so couples buy two. One important protection: Medigap plans are guaranteed renewable, so the insurance company can’t drop you because of health problems as long as you keep paying the premium. However, Medigap does not include prescription drug coverage, so you’d still need a separate Part D plan.
What Medicare Costs in 2025
Most people pay no premium for Part A if they or a spouse paid Medicare taxes for at least 10 years while working. Part B has a standard monthly premium of $185 in 2025, with an annual deductible of $257. Higher-income enrollees pay more.
Private insurance premiums vary widely depending on your employer’s contribution, the plan tier you choose, and your location. There’s no single number to compare, but employer-sponsored plans averaged significantly higher total premiums, though employers typically cover a large share of that cost.
One cost that catches people off guard is the late enrollment penalty. If you don’t sign up for Part B when you’re first eligible and don’t have qualifying coverage through an employer, your premium increases by 10% for every full year you were eligible but didn’t enroll. That penalty sticks for as long as you have Part B, which for most people means the rest of their life.
Can You Have Both Medicare and Private Insurance?
Yes, and many people do. If you’re still working at 65 and have employer coverage, you can delay enrolling in Part B without penalty as long as that employer plan qualifies. Some people keep employer insurance as their primary coverage and use Medicare as secondary, or vice versa, depending on the size of the employer.
After retirement, Medicare becomes the primary insurer for most people. At that point, you’d layer on additional coverage through Medicare Advantage, Medigap, or a Part D drug plan rather than maintaining a separate private plan. The goal is the same as any health insurance: reducing what you pay out of pocket when you need care. Medicare just structures that goal differently than the private plans you may be used to.