Medicare vs. Private Health Insurance: Which Is Better?
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Medicare is usually better than private health insurance.
Most of the time, if you qualify for Medicare, you can't buy private health insurance through Healthcare.gov or your state marketplace. But, there are some cases where you may need to choose between private health insurance and Medicare.
In these cases, Medicare is most often better because of its cheap prices and quality coverage, but private insurance might make sense if you need to cover a spouse or child. Private insurance may also make sense in other cases, like if you or a spouse plan on working past age 65.
Medicare vs. private insurance
Medicare is typically better than private insurance if you qualify because Medicare offers affordable, high-quality coverage.
Keep in mind that you can't typically buy private health insurance through the health insurance marketplace if you can get Medicare. If you're 65 or older, you can only buy a marketplace plan if you've worked less than 10 years you'll have to pay a monthly rate for Medicare Part A (hospital insurance) because you haven't paid enough in Medicare taxes. In this case, you want to carefully weigh the costs of Medicare versus private insurance before choosing a plan.
There are a few other instances where you may have to choose between Medicare and private health insurance. For example, if you or a spouse are working past the age of 65, you can delay Medicare and keep your workplace coverage. If you're younger than 65 and have Lou Gehrig's disease (ALS) or kidney failure (end-stage renal disease), you can buy marketplace coverage if you haven't already enrolled in Medicare.
You can also buy a short-term health plan regardless of your age. However, these plans typically have poor coverage, and they're not available in every state. Short-term health insurance rarely makes sense and should only be used to fill temporary coverage gaps.
Medicare
Medicare is government health insurance for Americans age 65 and older and for people with qualifying health conditions.
If you enroll in Medicare, you have to pay a $185 Part B monthly rate. You'll pay this if you have Original Medicare or Medicare Advantage. Original Medicare enrollees still have to pay certain other costs when they get medical care. You can cover many of these costs with a Medigap plan, and a Part D plan to pay for your prescription drugs.
A Medicare Advantage plan (Part C) offers bundled coverage through a private company. These plans have to offer Part A (hospital) and Part B (doctor) coverage, plus many plans pay for prescription drugs, vision, dental, gym memberships and other extra benefits. But you have less flexibility when it comes to choosing your doctor, and Medicare Advantage plans deny health insurance claims more frequently than Original Medicare.
Private health insurance
Private health insurance includes workplace coverage and policies you buy on your own.
Health insurance that you get through your employer is known as group health insurance. You can also get private health insurance by buying a policy from Healthcare.gov, your state health exchange or directly from an insurance company.
You can get most kinds of private health insurance regardless of your age or health status. Private health plans tend to cost more and offer greater flexibility than Medicare.
Medicare vs. private health insurance: Rates
Usually, private health insurance costs more than Medicare.
That's partially because you won't be able to get discounts, also called subsidies or premium tax credits, if you're also eligible for Medicare.
Type of plan | Monthly rate |
|---|---|
| Medicare Advantage | $28 |
| Medicare Part D and Medigap Plan G | $224 |
| Private health insurance | $1,458 |
The cost of Medicare depends on how you get coverage. If you buy a Medicare Advantage plan with drug coverage, the average cost is $28 per month. If you have Original Medicare and you buy a separate Part D and Medigap plan G policy, you'll pay a combined average of $224 per month.
Although Original Medicare with a Medigap plan costs more per month than a Medicare Advantage plan, you'll pay less when you go to the hospital. That's because Medigap plan G pays for most of the costs you're responsible for when you get medical care.
You have to pay $185 per month for Medicare Part B whether you have Original Medicare or a Medicare Advantage plan.
Private health insurance costs an average of $1,458 per month for a 65-year-old on a Silver plan. And, you can't get marketplace coverage if you're eligible for Medicare unless you're a part of the 1% of Medicare enrollees who need to pay a monthly rate for Medicare Part A.
It's also important to remember that once you turn 65, you won't qualify for marketplace discounts. That means you'll have to pay full price for private health coverage. Medicare almost always makes better financial sense than marketplace coverage for those ages 65 and up.
Pros and cons of private health insurance and Medicare
Medicare has good coverage and cheap monthly rates, but private health insurance makes more sense if you need to add someone to your policy.
Medicare pros and cons
Private health insurance pros and cons
Pros | Cons |
|---|---|
| Cheap rates | Only covers one person |
| Bundled coverage available | No out-of-pocket max with Original Medicare |
| You can visit 99% of doctors nationwide with Original Medicare | Drug coverage isn't automatic |
Medicare pros and cons
Pros | Cons |
|---|---|
| Cheap rates | Only covers one person |
| Bundled coverage available | No out-of-pocket max with Original Medicare |
| You can visit 99% of doctors nationwide with Original Medicare | Drug coverage isn't automatic |
Private health insurance pros and cons
Pros | Cons |
|---|---|
| Can cover more than one person | Higher rates |
| Has an out-of-pocket maximum to help limit costs | Usually limited to a network of doctors |
| Includes drug coverage | Usually have to buy separate vision and dental coverage |
Can you have private insurance and Medicare?
You can have private health insurance and Medicare at the same time.
You can't typically buy a new marketplace plan if you already have Medicare. However, if you already have an individual plan from Healthcare.gov or a state marketplace when you qualify for Medicare, you can keep both plans, although you'll lose any premium tax credits, you have on the marketplace plan.
These discounts don't cancel automatically, which means you may have to pay back any subsidies you got while you had Medicare at the end of the year. Plus, your marketplace policy may automatically be canceled at the end of the policy year.
It's illegal for someone to knowingly sell you a marketplace plan if you already have Medicare.
Frequently asked questions
Is private insurance better than Medicare?
No, Medicare is usually a better choice than private health insurance if you are age 65 or older. Private health insurance tends to cost more than Medicare and usually offers similar benefits.
What is the difference between health insurance and Medicare?
Medicare is a type of health insurance offered by the government. You can choose from Original Medicare (Parts A and B) and Medicare Advantage (Part C) plans, which are run by private companies.
Can I have Medicare and private insurance??
You can have Medicare and some types of private health insurance at the same time, but you can't buy a new marketplace plan if you already have Medicare. If you have Medicare and coverage through your employer, your workplace's group plan will pay first and Medicare will pay second.
Methodology
Medicare cost data is from Medicare.gov and the Centers for Medicare & Medicaid Services (CMS). Medicare Advantage costs are based on average 2025 rates that include prescription drug coverage. Special needs plans, Part-B-only plans, sanctioned plans, PACE plans, prepayment plans (HCPPs), Medicare savings account (MSA) plans, Medicare-Medicaid plans and employer-sponsored plans were excluded from the analysis. The average cost of Medicare Part D is based on stand-alone prescription drug plans and excludes employer-sponsored and sanctioned plans.
The average cost of health insurance came from public use files (PUFs) on the Centers for Medicare & Medicaid Services (CMS) government website and state-run health exchanges for states that do not use the federal marketplace. The average cost of health insurance is for a 65-year-old with a Silver plan.
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