How Medicare works is that it takes precedence as the main coverage when it is the only insurance you have. However, if you have additional insurance, a predetermined coordination of benefits is used to determine which coverage is primary and which is secondary.
The primary coverage, as its name suggests, is given priority in payment, while the secondary coverage pays after that.
Regardless of whether Medicare is primary or secondary, it still provides valuable benefits to seniors. The benefits you receive depend on which coverage is responsible for healthcare expenses first. In the following sections, we will discuss situations where Medicare acts as the primary or secondary coverage, as well as cases where no coordination of benefits exists.
Other types of insurance
There are various types of health insurance plans. If you are becoming eligible for Medicare but already have insurance, it is important to understand how your current plan coordinates with Medicare and whether you can delay enrolling in Medicare.
Job-based insurance: This refers to insurance provided by an employer or union for their current employees. If you are covered by your own job-based insurance or your spouse’s (or sometimes a family member’s) plan, it may work together with Medicare to cover your healthcare expenses. Depending on the employer’s size, job-based insurance can be either primary or secondary to Medicare. It may also offer the option to postpone Medicare enrollment.
Retiree insurance: These are insurance plans offered by employers to former employees who have retired. Retiree insurance always functions as secondary coverage to Medicare.
Federal Employee Health Benefits (FEHB): This insurance is available to current and former government employees and their family members. Whether FEHB acts as primary or secondary coverage depends on whether you are enrolled in Part B of Medicare.
TRICARE: This is insurance provided by the federal government to active duty and retired military personnel and their families. There are multiple TRICARE programs, but TRICARE for Life, which is for retirees, serves as secondary coverage to Medicare.
Veterans Affairs (VA) benefits: These are insurance benefits provided by the federal government to veterans, including pensions, educational stipends, healthcare, and more. VA benefits do not coordinate with Medicare.
Is Medicare Primary or Secondary?
When you have both Medicare and another type of insurance, Medicare will assume either a primary or secondary role in covering your medical expenses.
Primary insurance takes the first responsibility for paying your medical bills. Secondary insurance steps in and pays after the primary insurance has contributed. Typically, secondary insurance covers some or all of the remaining costs left after the primary insurer has paid, such as deductibles, copayments, or coinsurances. For example, if your primary insurance is Original Medicare, your secondary insurance may cover a portion or all of the 20% coinsurance for services covered under Part B. Depending on the coverage and costs of your primary insurer, secondary insurance can be beneficial in reducing your healthcare expenses.
If your primary insurance denies coverage, the secondary insurance may or may not contribute to the cost, depending on the terms of the insurance policy.
If you do not have primary insurance, your secondary insurance might offer minimal or no payment towards your healthcare expenses.
If you are considering delaying enrollment in Part B due to existing insurance coverage, it is crucial to inquire about how your insurance works with Medicare from your benefits manager or human resources department. When Medicare takes on the primary role in relation to your current insurance, enrolling in Part B is advisable to avoid incurring high out-of-pocket costs. This is because when Medicare is primary, your other insurance may not cover any costs until Medicare has made its contribution. In such cases, you would be responsible for paying these costs yourself. Conversely, when Medicare is secondary, your current insurance will cover the majority of the costs for eligible services.
To confirm how Medicare coordinates with your current insurance, you can reach out to the Social Security Administration (SSA) or Medicare.
When Medicare is both primary and secondary
When you have both Medicare and another form of insurance, Medicare assumes the role of either the primary or secondary insurer. Please refer to the provided table to understand how Medicare aligns and coordinates with other insurance plans.
FAQS
1. Is Medicare Primary or Secondary to Medicaid?
Medicaid is a government program administered by the states to provide assistance to low-income individuals. When someone is eligible for both Medicaid and Medicare, they are referred to as dual eligible. In cases of dual eligibility, Medicare is typically the primary payer, while Medicaid will not make any payments until Medicare has contributed.
2. Is Medicare Advantage Primary or Secondary?
When you enroll in a Medicare Advantage plan, which is provided by a commercial insurance company, it replaces traditional Medicare as the primary payer for your medical expenses. This means that Medicare is no longer responsible for covering your claims. Your Medicare Advantage plan becomes your primary and sole form of insurance.
3. Is Marketplace Coverage considered primary or secondary to Medicare?
Medicare and Marketplace coverage are not compatible with each other. If you have been receiving subsidies through the Marketplace, those subsidies will end once you become eligible for Medicare.
If you are not eligible for premium-free Medicare Part A, there is only one exception to this rule. Additionally, once you are enrolled in Medicare, you are not allowed to sign up for a Marketplace plan.
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