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How Does Medicare Work with Other Insurance?

If you have both Medicare and another insurance policy, you may have to follow certain rules when it comes to which insurance is primary and which is secondary. Medicare will leave it up to you to know these “coordination of benefits” rules and which cases they apply to. When Medicare is the primary payer, this means that the medical expenses incurred will be submitted to Medicare for payment first, up to its coverage limits. In this case, the secondary insurance will only pay if there are costs Medicare did not cover. 

Below, we will highlight the rules and how to know when Medicare is the primary or secondary payer. 

When Medicare is Primary

  • You are age 65 or older and your current employer that provides your additional insurance has fewer than 20 employees
    Group health coverage at small companies can often have very costly premiums. Provided that you have already enrolled in both parts of Medicare, it will pay first before your employer insurance. This is a common occurrence, but you will want to check with your insurance agent to compare quotes in case Medicare is significantly more cost effective than your small employer’s group policy.

  • You have retiree insurance or COBRA (Consolidated Omnibus Budget Reconciliation) insurance
    If your former employer provides retiree insurance coverage, Medicare will still remain your primary provider. The retiree or COBRA insurance will cover you as a secondary provider. Be sure to check with your secondary policy to determine if you have prescription drug coverage, as this may mean you do not need to enroll in Part D of Medicare.

  • You are on social security disability insurance (SSDI) before reaching age 65 and your current employer that provides your additional insurance has 100 or fewer employees
    In some cases, you may be eligible for Medicare before age 65 due to a disability. If you are already enrolled in SSDI, you will be automatically enrolled in Parts A and B of Medicare as well after 24 months. Medicare will become your primary payer, and you will want to notify your employer of this change. 

 

  • You have Veterans Administration (VA) benefits and receive care from a non-VA facility
    All care provided at a VA hospital is covered under VA insurance. However, should you also be enrolled in Medicare and receive any medical treatment from a traditional non-VA healthcare center, Medicare would be the primary payer.

  • You have End-Stage Renal Disease (ESRD) for more than 30 months
    For the first 30 months of being diagnosed with ESRD, your employer or non-Medicare plan would be the primary payer for all claims. After the 30th month mark, you would be automatically enrolled in Medicare, regardless of your age, and it would become the primary payer. It is important to note that 36 months after receiving a kidney transplant, you will be transitioned out of Medicare and return to your other insurance. If you become eligible again due to age or disability, you will need to re-enroll. 

  • You have Medicaid
    Medicaid, which provides medical expense assistance to people with low incomes, will always be secondary to Medicare. Not all providers who accept Medicare also accept Medicaid, so it is important to ask if they participate in Medicaid. If the provider does not accept Medicare, you may be responsible for the costs that Medicaid does not cover. 

 

When Medicare is Secondary

  • You are age 65 or older and your current employer that provides your additional insurance has 20 or more employees
    If you work for a large organization, it may be more cost-effective to delay Medicare enrollment and continue using your group policy as your primary and only coverage. Be sure to speak with your insurance agent who has experience in Medicare before finalizing this decision. They will be able to walk you through the process and make sure it’s right for you.

 

  • You have filed a Worker’s Compensation claim
    In this case, any medical visits or services relating to the Worker’s Compensation claim would not utilize Medicare as the primary payer. 

 

Even after considering these rules, you may find that Medicare will pay a claim that goes against these rules if your primary insurance provider does not provide payment within 120 days. Even though Medicare was the first to pay the hospital, it would still be considered the secondary payer and contact you later to recover the funds. It is always a good idea to speak with your insurance agent when you become eligible for Medicare due to age or disability, as they can help provide you with detailed insight into your premiums, coverage, and benefits.