Individual Health Insurance

Some people have individual health insurance when they become eligible for Medicare because:

  • They previously bought a policy and held onto it.
  • They previously had COBRA or CalCOBRA benefits and purchased individual health insurance when their COBRA benefits ended. Note: Companies are required to sell you an individual health insurance policy, regardless of your health, if you used all of your COBRA or CalCOBRA benefits and you are not yet age 65 or eligible for Medicare, and you meet the definition of an eligible individual under Health Insurance Portability and Accountability Act (HIPAA) rules.

Note: Some employers offer a conversion policy when COBRA coverage ends that provides the same or similar health benefits as the Group Health Plan (GHP). If you choose this option, you will not be eligible for the guaranteed issue of an individual health insurance policy under HIPAA. It is important to compare both the benefits and premiums of each option to determine which is best for you.

For more information, see COBRA & CalCOBRA.

Individual Health Insurance & Medicare

You can keep your individual health insurance when you become eligible for Medicare, which may be beneficial if your plan offers:

  • Better coverage for prescription drugs than a Medicare Part D plan
  • Benefits that are not covered by Medicare
  • Benefits that are covered more extensively than Medicare

The insurer cannot cancel your individual policy simply because you become eligible for Medicare, as long as you pay the premiums. However, not all individual insurance policies coordinate with Medicare. Read the Evidence of Coverage or Explanation of Benefits information from your individual plan to determine how, if at all, your plan coordinates with Medicare. If you choose to keep an individual plan that coordinates with Medicare, Medicare will be the primary insurer.

Note: If you delay enrolling in Part D because your individual health insurance has creditable drug coverage, you will not be charged a late enrollment penalty when you later enroll in Part D. However, you must enroll into a Part D plan within 63 days of the end of your current creditable coverage.

Note: If you are eligible for Medicare before age 65 because of a disability, you have another option to supplement your Medicare benefits. Medigap companies are required to sell you a Medigap plan for 6 months after you first sign up for Medicare Part B. However, these plans are not as comprehensive as most individual health insurance plans purchased before age 65, and are not available for people with end-stage renal disease (ESRD). The premium you will pay for a Medigap policy depends on the company, the policy you choose, your age and where you live.

Consult a Health Insurance Counseling and Advocacy (HICAP) counselor to help weigh your options. You can also learn more in Your Rights to Buy a Medigap Policy.