Medicare is always primary if it’s your only form of coverage. When you introduce another form of coverage into the picture, there’s predetermined coordination of benefits. The coordination of benefits will determine what form of coverage is primary and what form of coverage is secondary.
The primary coverage will pay first, and the secondary coverage pays second. Below, we’ll go over scenarios when Medicare is primary and when Medicare is secondary.
When is Medicare Primary?
For the most part, when you have more than one form of coverage, Medicare is primary. Some examples include having group coverage through a smaller employer, COBRA, being on inactive duty with TRICARE, or Medicaid. Usually, secondary insurance will only pay if the primary insurance paid its portion first.
Group Coverage Through Small Employer
If your employer has fewer than 20 employees, Medicare will be your primary coverage and the employer coverage will be your secondary coverage. If you do not enroll in Part B, your employer coverage will not pay their portion of your medical claims. This is why it’s very important to enroll in Medicare with you’re first eligible to do so.
In addition, the employer coverage is not creditable. Therefore, you will incur late enrollment penalties if you don’t enroll in Part B when you’re first eligible. This also applies to a spouse on the group plan.
Also, consider how much you’re paying for employer coverage. Most of the time, Medicare costs a lot less in monthly premiums. Compare both options side by side to see if making Medicare your primary coverage will save you money.
There are scenarios when you’ll have Medicare and COBRA at the same time. The majority of the time, Medicare will be primary and COBRA will be secondary. The exception to this is if your group coverage has special rules that determine the primary payer.
It’s not common for COBRA to be the better option for an individual who’s eligible for Medicare. This is because COBRA is more expensive than Medicare. Once you enroll in Medicare, you can drop your COBRA coverage.
Another key fact to know is that COBRA is not creditable coverage. If you’re eligible for Medicare and do not enroll, you’ll incur late enrollment penalties since COBRA is not considered as good as Medicare. You’ll need to enroll in Medicare within the first eight months you have COBRA, even if your COBRA coverage is active longer than eight months.
When your group employer insurance continues to provide you health insurance after you retiree, you’re receiving retiree coverage. In this scenario, Medicare is primary and your retiree converge is secondary. A lot of times retiree coverage will include prescription drug coverage. If this is the case for you, you probably won’t need to enroll in a Part D prescription drug plan.
Under 65 and Disabled with Employer Group Coverage
In the scenario you’re under 65, eligible for Medicare due to a disability, and have group employer coverage through a small or medium-sized employer with fewer than 100 employees. Medicare will be your primary payer, while your employer coverage is secondary.
TRICARE for Life
When military retirees and their spouses are eligible for Medicare, they become eligible for TRICARE for Life. For any care you receive at a non-military facility, Medicare pays first. That’s why you need to enroll in Part A and Part B when you become eligible.
However, TFL includes good drug coverage. therefore you don’t need to enroll in Part D. Some TFL beneficiaries choose to enroll in a Medicare Advantage plan due to the extra benefits they may come with. These extra benefits can include dental and vision coverage. In addition, TFL will help cover some of the out-of-pocket costs that come with Medicare Advantage plans.
End-Stage Renal Disease
Individuals diagnosed with ESRD will keep their current employer coverage as primary for the first 30 months. After 30 months, they’ll automatically switch over to Medicare as their primary coverage. This rule also applies to COBRA & retiree insurance.
If you receive Medicare due to ESRD and have a successful kidney transplant, your Medicare eligibility will end after 36 months. If you’re eligible for Medicare due to age or disability, then you will continue to remain enrolled in Medicare even after the kidney transplant.
Medicaid is a state-run federal assistance program assisting low-income Americans. When you become eligible for Medicare and are also eligible for Medicaid, you’re dual-eligible. When you’re dual eligible for both Medicare and Medicaid, Medicare is your primary payer. Medicaid will not pay until Medicare pays first.
If you’re dual-eligible and need assistance covering the costs of Part B and Part D, you could qualify for a Medicare Savings Program to assist you with these costs. Always make sure your provider accepts both Medicare and Medicare before seeking care.
When is Medicare Secondary?
Secondary insurance helps cover out-of-pocket costs left over after your primary coverage pays their portion. There are a few common scenarios when Medicare is secondary. An example includes having group coverage through a larger employer with more than 20 employees.
Group Coverage Through Larger Employer
Whether you have group insurance through the company you work for or your spouse’s employer, Medicare is your secondary coverage when the employer has more than 20 employees. Some Medicare beneficiaries will choose to delay their Part B enrollment if their group coverage is cheaper. However, most of the time after evaluating their coverage they find that Medicare will cost them less and provide better coverage if they let Medicare be their primary coverage.
Under 65 and Disabled with Larger Employer Group Coverage
If you’re under 65, eligible for Medicare due to a disability, and have group employer coverage through an employer with more than 100 employees, Medicare will be your secondary payer.
TRICARE pays first for Medicare-approved services at a civilian facility if you’re on active duty, Medicare will pay second. Medicare doesn’t cover treatment provided by a military hospital or federal health care provider.
End-Stage Renal Disease
Medicare will be your secondary coverage if you’re diagnosed with ESRD, have group employer coverage, and have been Medicare-eligible for less than 30 months.
Receiving Workers Compensation
Your workers’ compensation will pay first if you’re injured or become sick on the job. Medicare will pay second. For any medical services received that are not related to the workers’ compensation claim, Medicare will pay first.
Federal Black Lung Program
If you’re covered under the Federal Black Lung Program, the program will pay first and Medicare will pay second.
No Coordination of Benefits
When there is no coordination of benefits, the policies will not work together, or complement, one another. Some examples include when you have a Medicare Advantage plan, a Marketplace plan, or veterans benefits. Medicare does not coordinate with these healthcare programs.
Is Medicare Advantage Primary or Secondary?
When you enroll in a Medicare Advantage plan, the carrier pays for your medical care instead of Medicare. Therefore, Medicare is no longer responsible to pay your claims. Your Medicare Advantage plan is your primary, and only, coverage.
Is Marketplace Coverage Primary or Secondary to Medicare?
Marketplace coverage and Medicare do not work together. Once you’re eligible for Medicare, you will lose any subsidies through the Marketplace. The only exception is if you’re not eligible for premium-free Part A. Once you’re enrolled in Medicare, you cannot enroll in a Marketplace plan.
Is Veterans Benefits Primary or Secondary to Medicare?
Medicare and veterans benefits don’t work together; both are primary. When you go to a veterans facility, your veterans’ benefits are your primary and only coverage. When you go to a civilian doctor or hospital, Medicare is your primary and only coverage.
By having both veterans and Medicare benefits, you get access to all civilian and non-civilian doctors and hospitals.
How to Enroll in Secondary Insurance for Medicare
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