Paul Sanchez
Medicare covers a large share of your healthcare bills, but it does not cover everything. In this case, having secondary insurance can help cover the costs that Medicare does not. Secondary insurance covers services that your primary insurance plan may not, and you may choose to have more than one type of secondary insurance. This type of insurance is called supplemental insurance, and it is advisable for those with Medicare to help cover out-of-pocket costs and gaps in coverage. Medicare Supplement Insurance, or Medigap, is an optional add-on that can fill gaps in Medicare Part A and Part B.
| Characteristics | Values |
|---|---|
| Medicare and other insurance | If you have Medicare and other health insurance, each type of coverage is called a "payer". |
| Primary payer | The "primary payer" pays up to the limits of its coverage, then sends the rest of the balance to the "secondary payer". |
| Secondary payer | The "secondary payer" only pays if there are costs the primary payer didn't cover. |
| Who pays first? | If you have questions about who pays first, call the Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY: 1-855-797-2627). |
| Medicare and no-fault or liability insurance | If your provider knows you have a no-fault or liability insurance claim, they must try to get paid by the insurance company before billing Medicare. |
| Medicare and workers' compensation | Medicare generally won't pay for an injury or illness covered by workers' compensation. However, Medicare may make a conditional payment if the workers' compensation insurance company denies payment for your medical bills. |
| Medicare and TRICARE | If you're on active duty and have Medicare, TRICARE pays first for Medicare-covered services or items, and Medicare pays second. If you aren't on active duty, Medicare pays first, and TRICARE may pay second. |
| Medicare and VA benefits | You may be able to get drug coverage through the VA program. You may also join a Medicare drug plan, but you can't use both types of coverage for the same drug at the same time. |
| Medicare and Marketplace coverage | If you're paying a premium for Part A, you can drop Part A and Part B and get a Marketplace plan instead. Marketplace coverage doesn't lower your Medicare out-of-pocket costs and isn't used in place of Part B. |
| Medicare and Medigap | Medigap is extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. Generally, you need Part A and Part B to buy a Medigap policy. |
| Medicare and Medicare Advantage | Medicare Advantage is one of the two main ways to get your Medicare coverage. Most Medicare Advantage Plans include Part D coverage. |
| Medicare Secondary Payer rules | These rules apply when Medicare is not the beneficiary's primary health insurance coverage. |
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What You'll Learn
Medicare and other insurance: Who pays first?
If you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limit of its coverage and then sends the remaining balance to the "secondary payer".
Medicare is the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. If you have coverage in addition to Medicare, tell your doctor and other healthcare providers. This will help them send your bills to the correct payer and avoid delays.
- If you are aged 65 or older and have an employer retirement plan.
- If you are entitled to Medicare and were in an accident or other situation where no-fault or liability insurance is involved.
- If you are entitled to Medicare and are covered under workers' compensation because of a job-related illness or injury.
- If you are aged 65 or older and are covered by a Group Health Plan (GHP) through your current employment or your spouse's current employment, and your employer has 20 or more employees.
- If you are on active duty and have Medicare, TRICARE pays first for Medicare-covered services or items.
- If you have coverage from an employer through the SHOP Marketplace.
If you disagree with a coverage or payment decision by Medicare or your Medicare plan, you can learn how to file an appeal. If you have questions about who pays first, or if your coverage changes, you can call the Benefits Coordination & Recovery Center.
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Medicare as the secondary payer
Medicare Secondary Payer (MSP) is the term used when another entity has the responsibility for paying before Medicare. In other words, the "primary payer" pays up to the limits of its coverage, and then the "secondary payer" covers the remaining balance.
When Medicare was introduced in 1966, it was the primary payer for all claims except those covered by Workers' Compensation, Federal Black Lung benefits, and Veteran’s Administration (VA) benefits. In 1980, legislation was passed that made Medicare the secondary payer to certain primary plans, shifting costs to private sources of payment. The MSP provisions have protected the Medicare Trust Funds by ensuring that Medicare does not pay for items and services that certain health insurance or coverage is primarily responsible for paying.
There are various situations in which Medicare and other health insurance or coverage may coexist, and it is important to understand which entity will be the primary or secondary payer. For example, if you are covered by a group health plan through your employer, are 65 or older, and are still working, Medicare may be the secondary payer. If you have a no-fault or liability insurance claim, your provider must first try to get payment from the insurance company before billing Medicare. If your liability or no-fault case does not cover medical expenses, your provider may bill Medicare, which may make a conditional payment, which must be repaid by the primary payer at a later date.
If you are on active duty and have Medicare, TRICARE pays first for Medicare-covered services or items, and Medicare pays second. If you are not on active duty, Medicare pays first, and TRICARE may pay second. If you are covered by a military hospital or clinic, or any other federal health care provider, TRICARE pays, and Medicare usually does not.
It is important to inform your doctor or healthcare provider if you have coverage in addition to Medicare, so that they can send your bills to the correct payer and avoid delays.
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Medicare and employer insurance
Medicare is a health insurance program for individuals aged 65 and over. It consists of Part A (Hospital Insurance) and Part B (Medical Insurance). Original Medicare, as it is known, offers comprehensive hospital and medical coverage, similar to most employer health plans.
If you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limit of its coverage and then sends the remaining balance to the "secondary payer". If there are any costs that the primary payer does not cover, the secondary payer pays out next. Medicare may be the primary or secondary payer, depending on the size of the employer. If your company has fewer than 20 employees, Medicare is the primary payer. If your employer is part of a group health plan with more than 20 employees, Medicare is the secondary payer.
If you are still working past the age of 65, you may be eligible for both Medicare and a group health plan. In this case, Medicare is designed to work with employer benefits to cover your healthcare costs. You can choose to enroll in Medicare immediately or delay enrollment, depending on your company's size. If you have retiree coverage from a previous job, you may need to sign up for both Part A and Part B to maintain coverage.
If you have questions about who pays first or if your coverage changes, you can contact the Benefits Coordination & Recovery Center. It is important to inform your doctor and other healthcare providers about any changes in your insurance or coverage.
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Medicare and VA benefits
If you are enrolled in Medicare Part B, you can get health care outside of the VA system. If you have Medicare and go to a non-VA hospital, Medicare may pay for services that the VA does not cover. Similarly, if the VA authorizes services in a non-VA hospital but does not pay for all the services, Medicare may pay for the services it does cover.
If you are on active duty and have Medicare, TRICARE pays first for Medicare-covered services or items, and Medicare pays second. If you are not on active duty, Medicare pays first, and TRICARE may pay second.
If you have VA benefits, you will need to get care at a VA medical center or another VA location. However, VA benefits may cover your care at a non-VA hospital or other care settings if they are pre-authorized.
You can get prescription drug coverage through the VA program or a Medicare drug plan. However, you cannot use both types of coverage for the same drug simultaneously. If you have Medicare Part D, you can use it to get prescriptions from non-VA doctors and fill your prescriptions at your local pharmacy instead of through the VA mail-order service.
If you have Medicare and other health insurance, each type of coverage is called a "payer." The "primary payer" pays up to the limits of its coverage, and the "secondary payer" pays the remaining balance.
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Medicare Supplement Insurance (Medigap)
Medicare is a health insurance program provided by the federal government. It is available to citizens aged 65 and over, as well as younger people with disabilities or those with specific health conditions. While Medicare provides comprehensive coverage for various healthcare services, it does not cover all medical expenses, and beneficiaries are often responsible for cost-sharing in the form of deductibles, coinsurance, and copayments. This is where Medicare Supplement Insurance, also known as Medigap, comes in.
Medigap is supplemental insurance that helps fill the gaps in Original Medicare coverage (Part A and Part B). It is offered by private insurance companies and helps cover some of the out-of-pocket expenses that Original Medicare doesn't cover. These expenses can include deductibles, coinsurance, and copayments. It's important to note that Medigap policies only work with Original Medicare and cannot be used alongside Medicare Advantage Plans.
Generally, you must have both Part A and Part B to buy a Medigap policy. Medigap policies are standardized, and in most states, they are named by letters, like Plan G or Plan K. The benefits offered by each lettered plan are the same across different insurance companies. The only difference between policies with the same letter sold by different companies is the price. It is recommended to purchase a Medigap policy within six months of enrolling in Part A and Part B to avoid potential issues with eligibility or increased costs.
Medigap policies do not cover everything, and there are certain exclusions. They typically do not cover long-term care, such as care provided in a nursing home, or certain specific services like vision, dental, hearing aids, private-duty nursing, or prescription drugs. However, some Medigap policies offer additional benefits, such as coverage for medical expenses incurred while travelling outside the United States.
It's important to understand how Medicare coordinates with other insurance coverage. When an individual has Medicare and another form of health insurance, each type of coverage is assigned as either the "primary payer" or "secondary payer." The primary payer covers costs up to the limits of its coverage, and then the secondary payer covers any remaining balance for costs not covered by the primary payer. This coordination ensures that individuals with multiple insurance coverages do not face issues with overlapping benefits or confusion over which insurance pays for what.
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Frequently asked questions
No, it is not necessary to have secondary insurance with Medicare. Medicare is the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. However, if you have Medicare and other health insurance, Medicare may be the primary or secondary payer depending on the situation.
The insurance that pays first (primary payer) pays up to the limits of its coverage. The insurance that pays second (secondary payer) covers any remaining costs that the primary insurance didn't cover. The primary payer depends on the situation and the type of insurance. For example, if you are on active duty and have Medicare, TRICARE pays first for Medicare-covered services.
If your provider knows you have a no-fault or liability insurance claim, they must first try to get paid by the insurance company before billing Medicare. If your no-fault or liability insurance does not cover medical expenses, your provider may bill Medicare, which may make a conditional payment.
