When you enroll in Medicare alongside other health insurance coverage, you may wonder, is Medicare primary or secondary? This question may seem simple. Yet, once you introduce another form of coverage, it must meet specific requirements to pay primary or secondary to Original Medicare.
Most coverage types are already predetermined to be primary or secondary alongside Medicare. Below, we discuss several coverage types and when they are primary or secondary to Original Medicare. Then, we discuss how to use the benefits with Medicare.
When is Medicare Primary?
Often, when you have multiple forms of insurance coverage, Original Medicare will pay primarily. Typically, your secondary insurance will only pay once your primary coverage pays its portion.
If you have any of the following coverage types, your Original Medicare will be primary, meaning it will pay first:
- Small employer group coverage: If your employer has fewer than 20 employees, your group plan will pay secondary to (after) Original Medicare. Thus, if you do not enroll in Medicare Part B, your employer plan will not cover its portion of your medical bills. It will only pay after Original Medicare pays its share. Additionally, small employer group coverage is not creditable for Medicare Part B. Thus, if you do not enroll in Medicare Part B when you become eligible, you must pay the Medicare Part B late enrollment penalty.
- Medicaid: When you become eligible for Medicaid and Medicare, you are dual-eligible. When you are dual-eligible, Medicare pays primary, and the state-run Medicaid program will pay secondary. Medicaid will not pay its portion until Medicare pays first.
- Retiree coverage: If you retire and continue to receive your employer’s group coverage, you are utilizing retiree coverage. Once you enroll in Original Medicare, your retiree coverage will become secondary as it is not creditable to Original Medicare. However, if you delay Medicare Part B coverage, your retiree plan will not cover your benefits, and you will need to pay the late enrollment penalty. If your retiree plan includes prescription drug benefits, it is often creditable for Medicare Part D, so you may not need to enroll in Medicare Part D coverage.
- COBRA: If you are eligible for Medicare, there may be instances where you are eligible for both Medicare and COBRA coverage. In this case, COBRA will pay secondary unless your group coverage has special rules that allow COBRA to be the primary payer. COBRA coverage is not creditable for Original Medicare after 8 months, so it is important to sign up for Medicare Part B as soon as you are eligible. This way, you avoid the late enrollment penalty. Often, once you become eligible for Original Medicare, it is most cost-effective to drop COBRA coverage and enroll in a Medicare Supplement (Medigap) plan. Medigap can save you hundreds of dollars each month when compared to COBRA.
- Under 65 and disabled with small/medium employer group coverage: If you are under 65, receive Original Medicare due to disability, and receive employer group coverage from a company with less than 100 employees, Original Medicare will be primary. So, you will need to enroll in Medicare Part B to receive coverage.
- TRICARE For Life: When a military retiree or their spouse becomes eligible for Original Medicare, they also qualify for TRICARE For Life. When you have Medicare and TRICARE For Life, Medicare Part A and Part B pay primary, and TRICARE for Life pays secondary. Typically, TRICARE for life includes prescription coverage and works similarly to a Medicare Supplement plan by covering your additional out-of-pocket costs after Original Medicare pays.
- Diagnosed with End-Stage Renal Disease 30 or more months ago: After you have Medicare for 30 months when qualifying due to an End-Stage Renal Disease (ESRD) diagnosis, your employer coverage becomes secondary, so Medicare is then primary.
If you have any of the above types of coverage and have questions about whether Medicare is primary or secondary, contact your local Social Security office for accurate information regarding your coverage.
When is Medicare Secondary?
Having secondary insurance helps cover out-of-pocket costs your primary insurance leaves behind. Medicare is not typically secondary coverage. However, Original Medicare pays secondary in a few instances. These include:
- Medium/large employer group coverage: If your company employs 20 or more people, your group coverage will be primary to Original Medicare. So, once your group coverage pays its portion of benefits, then Original Medicare will pay.
- Workers’ compensation: If you become injured or sick due to your job, you will receive workers’ compensation. In this scenario, Medicare will pay secondary, and workers’ compensation will pay primary.
- Under 65 and disabled with large employer group coverage: If you receive Original Medicare benefits due to a disability under age 65 and have large group insurance with over 100 employees, your group coverage will pay primary, and Medicare will pay secondary.
- TRICARE: If you are on active duty, TRICARE will cover services at a civilian hospital first, then Original Medicare will pay. However, Medicare does not cover services performed at a Veterans’ hospital.
- Diagnosed with End-Stage Renal Disease less than 30 months ago: If you were diagnosed with ESRD less than 30 months ago, Original Medicare will pay secondary, and your employee group plan will pay primary.
- Federal Black Lung Program: Anyone who qualifies for the Federal Black Lung program and Original Medicare will receive primary coverage from the Black Lung program. Thus, Original Medicare will pay secondary.
Coordination of Benefits When Medicare is Primary or Secondary
If you have more than one source of health insurance benefits, you must understand the coordination of those benefits. When you do not coordinate benefits, the plans will not work together.
To coordinate primary and secondary benefits, you will first need to answer the question: Is Medicare primary or secondary? Then, you will need to contact both carriers and explain your situation. Once both carriers understand which plan is primary and secondary, your benefits will coordinate smoothly.
Is Medicare Supplement Primary or Secondary?
When you pair a Medicare Supplement plan with Original Medicare, it will always pay secondary. Medicare Supplement plans pay after your Original Medicare pays its portion of coverage. If Original Medicare does not pay, your Medicare Supplement plan will not pay either.
There is never a circumstance in which your Medicare Supplement plan will be primary to Original Medicare.
Is Medicare Advantage Primary or Secondary?
When you apply for Medicare Part C, you will not receive coverage from Medicare Part A or Part B. Instead, your Original Medicare benefits combine within your Medicare Advantage plan, which you will receive through a private insurance company. Thus, Medicare Advantage becomes your primary insurance.
When you enroll in a Medicare Advantage plan, you will not have secondary coverage.
What is the Medicare Secondary Payer Act?
The Medicare Secondary Payer Act ensures that Medicare dollars are not spent on claims that another insurance may cover. So, if Medicare is secondary, it will not pay unless your primary coverage covers its part of the benefits.
Often, when you visit a doctor or hospital and have two forms of coverage, you will complete a Medicare Secondary Payer Questionnaire. This allows the hospital to understand your coverage and know when to bill Medicare and when to bill your other insurance.
How to Know if Medicare is Primary or Secondary?
If you have Medicare and another type of insurance, you must know if Medicare is primary or secondary. If you are unsure of the answer, do not hesitate to contact Social Security or a licensed Medicare professional for help. Understanding your coverage is essential for making informed healthcare decisions.