Fewer than 42 of every 100 Americans age 65 and older carried private health insurance in 2025, a share that fell 2.8 percentage points in a single year, according to the Census Bureau’s latest coverage report. Private coverage for that age group, which includes employer retiree plans, Medigap policies and other direct-purchase insurance, dropped to 41.5 percent as both employment-based and direct-purchase coverage declined. Medicare and Medicaid enrollment both rose over the same period, but private coverage did not follow.
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Employer and direct-purchase coverage both slipped
The Census Bureau’s press release attributes the overall 2.8-point decline in private coverage for people 65 and older to two separate drops: a 1.5-percentage-point decrease in employment-based coverage and a 1.4-percentage-point decrease in direct-purchase coverage. Those two categories together account for nearly all of the year-over-year change, with neither one alone explaining most of it.
Private coverage for this age group functions differently than it does for younger adults, since most people 65 and older already qualify for Medicare and use private coverage, when they have it, as a supplement rather than a primary source of insurance. An employer retiree health plan or a Medigap policy purchased directly typically pays for costs Medicare itself does not cover, including deductibles, coinsurance and services outside Medicare’s scope.
Private coverage in this age group mostly takes one of three forms: an employer-sponsored retiree health plan carried over from a former job, a Medigap policy purchased directly to supplement traditional Medicare, or other direct-purchase insurance. Each works differently: an employer retiree plan is tied to a former employer’s benefits decisions, while a Medigap policy is an individual purchase that a retiree renews and pays for independently of any employer.
Census’s press release attributes the decline specifically to lower employment-based and direct-purchase enrollment, without naming a cause for either drop. The release does not say whether fewer employers offered retiree coverage in 2025, whether fewer eligible retirees chose to enroll in coverage that was offered, or whether Medigap premiums played a role in the smaller of the two declines.
By comparison, the Bureau’s presentation put private coverage for the population as a whole, across all ages, closer to employer-sponsored coverage at 53.5 percent, with Medicare covering 20.1 percent and Medicaid 17.1 percent of everyone regardless of age. The 65-and-older group’s coverage mix looks nothing like that national average, since Medicare dominates once a person qualifies for it.
Medicare and Medicaid picked up ground the same year
Medicare coverage for adults 65 and older rose to 94.3 percent in 2025, up 0.6 percentage point, while Medicaid coverage for the same group rose to 18.4 percent, up 0.7 percentage point, according to the Bureau’s presentation. Since Census counts each type of coverage separately rather than as mutually exclusive categories, a person can appear in both the Medicare and the private-coverage figures if they hold a supplemental plan.
That overlap means the declining private-coverage share does not necessarily translate into a coverage gap on its own. The uninsured rate for people 65 and older held at 1.5 percent in 2025, among the lowest of any age group Census tracked, compared with 11.0 percent for adults 19 to 64 and 0.9 percent for people under 19.
A shrinking private share inside a still near-universal system
Losing an employer retiree plan or a direct-purchase policy does not mean losing insurance altogether for someone already enrolled in Medicare, but it can mean carrying more of Medicare’s own out-of-pocket exposure without a supplement to offset it. The same September 15 report found that medical out-of-pocket spending pushed 7.7 million people into poverty nationally in 2025, more than either FICA payroll taxes or the federal income tax pushed in individually, underscoring what a thinner private-coverage layer can cost a household even while remaining insured.
Census’s release does not separate how much of the 1.5-point employment-based decline reflects retirees losing an employer-sponsored plan specifically, as opposed to workers turning 65 without an employer plan to carry into retirement. The two components of the overall decline, 1.5 points from employment-based coverage and 1.4 points from direct-purchase coverage, are close enough in size that neither one explains most of the year’s shift.
The stakes of that decline show up in cost exposure rather than in coverage status. Original Medicare alone does not cap a beneficiary’s annual out-of-pocket spending on Part A and Part B services the way private group health plans typically do, which is the specific gap a Medigap policy or an employer retiree plan is designed to close. A shrinking share of seniors carrying that kind of supplement means a shrinking share protected against Medicare’s own uncapped cost-sharing structure.
What the report does establish clearly is direction: both private-coverage components for this age group moved down in the same year that Medicare and Medicaid enrollment both moved up, a pattern the Bureau states without offering a single explanation that covers every household experiencing it. Whether that shift continues into 2026 will not be clear until Census publishes next year’s coverage report on the same schedule.
Where a private-coverage decline meets an enrollment choice
A 2.8-point drop in private coverage for people 65 and older does not show up as a coverage gap in the topline numbers, since Medicare and Medicaid enrollment rose over the same year, but it does shift more of the supplemental-cost decision onto whichever Medicare plan a household picks.
The 2027 Medicare Open Enrollment Decision Kit combines a cost calculator spreadsheet that compares plans on cost, drugs and doctors with a prescription-by-plan comparison for households weighing options during this year’s enrollment window.
Compare plan costs and drug coverage in The 2027 Medicare Open Enrollment Decision Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
