How Do You Know When Medicare is Your Primary or Secondary Insurance?
Many people have some form of additional coverage to supplement their Medicare insurance. Common additional coverage options include employer coverage, VA health benefits, and TRICARE. If you’ve delayed Part B enrollment, maintaining employer coverage is particularly common.
If you do have another type of insurance in addition to Medicare, one insurance pays first, and one pays second. These are called primary and secondary payers.
Medicare’s “coordination of benefits” rule determines when Medicare is the primary insurance and when your other health coverage is the secondary insurance. We’ll break down these types of insurance in this blog post.
Key takeaways:
A primary payer pays your medical costs first. Your secondary payer then pays its share of any remaining medical costs.
Medicare may be the primary or secondary insurance. It depends on the situation and what your other health insurance is.
The best way to check if Medicare is your primary or secondary payer for your medical bills is to check the policy details of both types of insurance. You can also contact the Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY: 1-855-797-2627).
What is a primary and secondary payer?
When you have Medicare and another insurance plan, the two types of coverage can work together to pay your medical bills. One insurance is the “primary payer,” and one is the “secondary payer.” The primary insurance pays your medical costs first, and then the rest of the bill is sent to the secondary payer.
Having two types of health coverage can be advantageous when you don’t have to pay two different premiums. For example, if your employer pays for 100% of your premiums, having Medicare can fill gaps in the coverage. For example, Medicare could cover a service or piece of equipment that your employer insurance doesn’t cover. It can also reduce your out-of-pocket costs for covered services.
If you have any questions about when Medicare is the primary or secondary insurance, you can get in touch with your plan provider about your specific situation. You can also get in touch with the Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY: 1-855-797-2627). That said, usually your doctor’s billing department will handle all the details.
When is Medicare primary or secondary?
The coordination of benefits (COB) rules state which insurance is primary and which is secondary. Medicare’s designation as a primary or secondary payer depends on the situation.
Medicare and employer coverage
Medicare is the primary payer if the employer you work for and receive coverage from has fewer than 20 employees. Your employer-linked health insurance pays second.
Medicare is the secondary payer if your company has more than 20 employees. Your employer plan would pay first.
If you continue to work when you turn 65 and you work for a small company with fewer than 20 employees, make sure that you don’t miss your Initial Enrollment Period for Medicare. You won’t qualify for the Part B Special Enrollment Period, and you’ll face late penalties.
Medicare and TRICARE
TRICARE is a healthcare program for current and retired military members and their families.
When you aren’t on active duty: Medicare is the primary payer and TRICARE is the secondary payer.
When you are on active duty: TRICARE is the primary payer and Medicare is the secondary payer.
Medicare and VA benefits
The Department of Veterans Affairs (the VA) provides benefits, including health insurance for veterans. Coordination of benefits rules don’t apply to beneficiaries with Medicare and VA benefits. You can only use VA benefits at a healthcare facility affiliated with the VA. Since non-VA facilities won’t take VA health care, you can use your Medicare benefits to broaden your coverage outside these health centers.
Medicare and COBRA
COBRA (the Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows people to keep their employer health coverage for a limited period of time after their employment ends. With Medicare and COBRA coverage:
Medicare is the primary payer if you’re enrolled in Medicare. COBRA is the secondary payer.
During the coordination period, COBRA is the primary payer if you’re eligible for Medicare due to end-stage renal disease (ESRD). Medicare pays second. This coordination period lasts for up to 30 days after you’re first eligible for Medicare. Once this period ends, Medicare pays first.
If you lose your employer coverage and you’re eligible for Medicare, you can likely enroll using a Special Enrollment Period. Understanding when to enroll in Medicare can ensure that you receive timely care.
Medicare and FEHB
Federal Employees Health Benefits (FEHB) provides health insurance for active and retired federal employees.
Medicare is the primary payer if you’re a retired federal employee. FEHB is the secondary payer in this case.
FEHB is the primary payer if you’re an active employee. Medicare is the secondary payer in this situation.
Medicare and Medicaid
Medicaid provides health insurance for low-income Americans. It’s jointly funded by the federal government and state governments. Each state is charged with operating its own Medicaid program, which means each one has different eligibility criteria and benefits. Once you turn 65, Medicaid coverage is paired with Medicare through Medicare Savings Programs. Depending on which Medicare Savings Program you’re eligible for, Medicaid may pay for:
Your Medicare Part A and Part B premiums
Your share of out-of-pocket costs, including deductibles, coinsurance, and copayments
Drugs, medical devices, and services that Medicare doesn’t cover, including outpatient care and preventive care
If you have Medicare and Medicaid, Medicare pays first. Medicaid pays last—after any other insurance you have.
Medicare and private insurance
The coordination of benefits rules for Medicare and a private health insurer will depend on the provider and plan. Check your policy details to determine who pays first.
Does Medicare know if I have other coverage?
Medicare won’t automatically know if you have other coverage. However, if your other insurance is the primary payer, they’re obligated to inform Medicare. Sometimes, your insurance provider, doctor, or employer will ask about your extra coverage for reporting purposes.
Does Medicare automatically cross over to secondary insurance?
Medicare may automatically send claims to your secondary insurance if the insurer has a coordination of benefits agreement with Medicare. This is common with Medigap plans. If there's no such agreement, or if Medicare doesn't have your correct insurance info, you may need to file a claim manually. To confirm, check with your secondary insurer and review your Medicare Summary Notice.
How Medicare works with other insurance coverage
In most cases, private insurance plans are designed to work alongside Medicare. This means that your insurance offers benefits that Medicare doesn’t. For example, while Medicare will only cover treatment for eye conditions like glaucoma and cataracts, your private insurance might cover routine eye exams to check your vision.
In situations where Medicare is the secondary payer, it also might make conditional payments. This means that Medicare will pay for services or drugs that are covered by your primary payer. Then, your primary payer will pay Medicare back when your claim is processed.
Keep in mind that these rules can change with specific situations. Checking with your Medicare plan or other insurance coverage is the best way to see who’s responsible for coverage.
Bottom line
How another insurance works with Medicare can be confusing. In most cases, your doctor’s billing department will handle all the details, but some people want to know all the details!
Get in touch with a licensed Chapter Medicare Advisor to get answers to your questions about Medicare coverage. Talk to an Advisor at 855-900-2427 or schedule a time today.