When you have Medicare and another health insurance policy, one policy is primary, and the other is secondary. The primary coverage pays first. The secondary coverage may then pay a portion of the balance that remains after the primary coverage has paid. In some instances, depending on the coverage, the secondary plan pays some or all your copays and deductibles. However, that is not always the case, and it is best to know what to expect from your plans to help you manage your healthcare needs more easily.
When Is Medicare the Primary Insurer?
If Medicare is your only health insurance, it will always be considered your primary coverage. In most instances, even when you have additional insurance plans, Medicare remains primary. The following include several situations where Medicare will be primary:
- When You Have End-stage renal disease (ESRD) and Have Been Medicare-eligible 30 Months or Longer: If you have ESRD, the length of your Medicare eligibility determines Medicare’s assignment as primary. If you have been eligible for Original Medicare for at least 30 months, Medicare is your primary coverage.
- When You Have COBRA Insurance and Medicare: If you decide to purchase COBRA insurance after leaving your job and you have Medicare, COBRA insurance will likely be secondary to Medicare. However, there are cases where the COBRA plan has specific rules that decide the primary plan. If you are eligible for COBRA, since the coverage can be quite expensive, it may be best to maintain only Medicare. As soon as you sign up for Medicare, you no longer need to have your COBRA insurance. To avoid late penalties, you may need to apply for Medicare no later than eight months after the start of your COBRA coverage, whether your COBRA insurance remains active beyond eight months or not. For more information visit What to Know About Medicare and COBRA.
- When You Have Group Coverage Through a Company with Fewer Than 20 Employees: Job-based coverage is secondary to Medicare when your employer has fewer than 20 workers. Medicare pays for your health-related services before your group insurance—but only if you enroll in Medicare Part B as soon as you are eligible. Keep in mind that your employer may not pay for your health expenses if you decide not to enroll in Medicare when you are eligible.
- When You Are Under 65, Disabled with Medicare, and Work for an Employer with Fewer Than 100 Employees: If you haven’t reached 65 and have a disability, you may still be working for an employer. The coverage through your employer will most likely be secondary if the company has no more than 100 employees.
- When You Are a Medicaid Beneficiary with Medicare: Medicaid is health insurance for those with low incomes. The program, which is run by the state, may not make you ineligible for Medicare. If you have both Medicaid and Medicare, Medicare can be your primary insurance. Nevertheless, Medicaid may not cover all your leftover expenses. If you have both plans but are finding it difficult to pay for your prescription drugs, you may be eligible for a Medicare Savings Program that can help you pay your Part B and Part D premiums. For more information visit Medicare vs Medicaid: What’s the Difference?
- When You Are a Military Retiree Receiving Care at a Civilian Facility: If you retire from the military, you may become eligible for TRICARE for Life (TFL) when you become eligible to enroll in Medicare. If you receive services at a civilian facility, Medicare will pay as primary, and TFL will be secondary. Also, if you have Tricare for Life, you don’t have to worry about enrolling in Plan D for prescription drug coverage. TFL offers great prescription drug benefits. For even better comprehensive coverage, some beneficiaries who retire from the military, along with their spouses, prefer Medicare Advantage plans. Advantage plans frequently offer extra benefits, such as vision and dental care.
When Will Medicare Pay as Secondary?
Although Medicare is typically the primary insurer, there are times when Medicare becomes secondary. The following include several situations where Medicare will be secondary:
- When You Have Medicare and Employer-based Coverage from a Company With at Least 20 Employees: Whether the job-based coverage is through your employer or through your spouse’s, health insurance from a mid-size or larger employer is primary if the company employs at least 20 workers. The coverage that the employer provides for you must be the same as it is for other employees, regardless of your age. Medicare-eligible beneficiaries sometimes decide to postpone enrolling in Part B when their employer-based group coverage is less expensive. Nonetheless, Medicare typically costs less and offers better benefits when it is the primary insurance.
- When You Have Workers’ Compensation Insurance and Medicare: If you currently have health insurance through Medicare and Workers’ Compensation, any procedures that are associated with your Workers’ Compensation claim are paid by the Workers’ Compensation insurance first. It is important to note that Medicare will pay as primary for services that are not Workers’ Compensation-related.
- When You Are a Part of the Federal Black Lung Program: If you are a part of the Federal Black Lung Program, you are covered under that plan. The program pays as the primary insurer. Medicare is your secondary coverage.
- When You Have Retiree Coverage from a Former Employer: If you have retirement coverage from a previous employer, Medicare is likely secondary. It’s important to note that some retiree plans only pay for healthcare if you enroll in Medicare once you are eligible. To be sure that you understand how your retiree benefits work with your Medicare coverage, be sure to review the details of your retiree plan.
- When You Are Active-duty and Receive Care at a Non-military Facility: If you are an active-duty service member and you receive Medicare-allowed services at a non-military facility, your Tricare insurance pays first. Your Medicare coverage pays as the secondary insurer. It is important to note that Medicare will not pay as secondary or primary for services that are performed by a federal health care provider or a military facility.
- When You Have End-stage renal disease and Group Coverage and Have Not Been Eligible for Medicare Long Enough: If you have end-stage renal disease, have not been eligible for Medicare enrollment for at least 30 months, and are still covered by an employer’s group plan, Medicare will pay as secondary coverage. Your primary coverage will most likely be the group plan from your employer.
What Is “No Coordination of Benefits”?
No coordination of benefits occurs when insurance plans are not designed to work together. Although some programs are beneficial, Medicare does not always coordinate its benefits with them. Examples of this include:
- Medicare Does Not Coordinate with Veterans’ Benefits: Veterans’ benefits and Original Medicare are both primary insurers when you are covered by both plans. Each plan pays as primary in a different circumstance. If you receive care at a military facility, your veterans’ benefits pay as the primary and sole coverage. If you receive benefits from a non-military provider, Medicare is the primary and only coverage.
- Original Medicare Does Not Coordinate with Medicare Advantage: Medicare Advantage takes the place of Original Medicare. Thus, if you have an Advantage plan, Medicare no longer pays your claims.
- Medicare Does Not Coordinate with Marketplace Coverage: Once you enroll in Medicare, you may not be able to participate in a Marketplace plan.