In a nutshell: you can have private insurance in addition to Medicare. There are several parts to Medicare coverage. Once you are eligible for Medicare coverage, Medicare will become your primary provider, but you still retain the option to retain supplemental insurance coverage through a private provider.

The Parts

Medicare coverage consists of four different parts: A, B, C and D. Medicare Part A is the original Medicare coverage. Part A covers hospital care, and operates much like a regular insurance plan in which you pay a co-pay with a deductible for a certain amount of coverage for hospital services. Part B covers other medically necessary services and equipment, such as doctor visits, outpatient care and home health care. Part C is when you get your Part A and Part B services covered by a private insurer. Most of the time, Part C plans are cheaper and offer extra benefits and prescription drug benefits. Part D is the prescription drug coverage from Medicare.

Supplemental

Medicare itself does not cover 100 percent of your medical expenses. For example, Medicare only covers a certain number of days stay in a hospital. Once you have used up your allowed days, it will cover nothing for any further days stayed. In order to cover what Medicare doesn't, you can purchase supplemental insurance to cover the gaps, known as Medigap insurance.

Eligibility

In order to be eligible for Medigap, you must have Medicare Part A and B. Each policy covers only one person, so if you and a spouse want Medigap, you must each qualify for and purchase separate policies.

Plans

Medigap plans are determined by state and federal law. Your state may have up to 12 different plans that you can choose from (usually known as Medigap A through L). Medigap plans normally do not cover prescription drugs, which are covered by Medicare Part D.

Supplements

Another way to have both Medicare and private insurance is through Medicare supplement plans. When the time comes for you to enroll in Medicare, you may ask your current insurer if it offers a Medicare supplement plan. These plans add benefits and coverage to your existing Medicare plan.

Source:

The Medicare Consumer Guide

Your Medicare Coverage

Medicare Information

More Information:

Medicare.gov

Centers for Medicare and Medicaid Services