Orlando Harmon
Medicare is a federal government health insurance program for people aged 65 or older, or those who have received Social Security Disability Insurance (SSDI) for 24 months, or suffer from End-Stage Renal Disease (ESRD), regardless of age. Medicare can be the primary or secondary payer, depending on the situation. If an individual has 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 covers the remaining balance. Medicare does not automatically become the primary insurance, and there are various factors that determine whether it is the primary or secondary payer.
| Characteristics | Values |
|---|---|
| Medicare as primary payer | Medicare automatically transfers claims information to your FEHB plan once your claim is processed. |
| Medicare pays first for any medical service unrelated to a workers' compensation claim. | |
| Medicare is the primary payer for those eligible for Medicaid. | |
| If you are retired and receiving Part A benefits, Medicare will pay first. | |
| If your company has less than 100 employees and is not part of a multi-employer GHP, Medicare will be primary. | |
| Medicare as secondary payer | Medicare won't pay for items or services that workers' compensation will pay for promptly. |
| Medicare Advantage plans are considered secondary insurance. | |
| Medicare is secondary for federal employees receiving workers' compensation. | |
| Medicare is secondary for those covered under the Federal Black Lung Program. | |
| Medicare is secondary for retired military with TRICARE and FEHB coverage. |
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What You'll Learn
Medicare and Medicaid
Medicare is the federal government health insurance program that provides health care coverage if you are 65 or older, are under 65 and receive Social Security Disability Insurance (SSDI) for 24 months, begin receiving SSDI due to ALS/Lou Gehrig's Disease, or have End-Stage Renal Disease (ESRD) regardless of age.
Medicare can be the primary or secondary insurer depending on the other insurance coverage a person has. If a person has Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, then sends the remaining balance to the "secondary payer". If the "secondary payer" does not cover the remaining balance, the person may be responsible for the remaining costs. Medicare may make a conditional payment to pay the bill and then recover any payments the primary payer should have made.
Medicare as the primary payer:
- If a person is dual-eligible for Medicare and Medicaid, Medicare is the primary payer. Medicaid will not pay until Medicare pays first.
- If a person is an annuitant with FEHB, Medicare, and Medicaid coverage, Medicare pays first, then FEHB, and then Medicaid.
- If a person is an active federal employee or re-employed annuitant eligible for FEHB, and either they or their covered spouse has Medicare, Medicare is the primary payer.
- If a person is under 65, entitled to Medicare based on disability, and covered under FEHB, Medicare is the primary payer.
- If a person is a retired military member with TRICARE and Medicare coverage and gets FEHB coverage as the spouse of a federal employee, Medicare is the primary payer.
- If a person is on active duty and has Medicare, TRICARE pays first for Medicare-covered services or items, and Medicare pays second.
- If a person is enrolled in Original Medicare, Medicare may make a conditional payment for medical or drug claims before knowing that the claims are related to their workers' compensation settlement. Medicare must then be repaid from the Workers' Compensation Medicare Set-aside Arrangement.
Medicare as the secondary payer:
- If a person is covered under a group health plan or retiree coverage, Medicare may be the secondary payer.
- If a person is covered under the Federal Black Lung Program, Medicare will pay second.
- If a person is a federal employee receiving workers' compensation and is determined unable to return to duty, Medicare is the secondary payer.
- If a person has Medicare and receives workers' compensation for a job-related injury or illness, Medicare will pay second. However, Medicare will pay first for any medical service unrelated to the workers' compensation claim.
- If a person is enrolled in a Medicare Advantage or Medicare drug plan, Medicare will pay second.
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Medicare and private insurance
Medicare is a federal government health insurance program that provides health care coverage for people aged 65 or older, or those under 65 who meet certain criteria. It can work alongside other insurance policies, including private insurance, and in some cases, Medicare can be the primary payer.
When an individual has Medicare and another form of insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, and the "secondary payer" covers any remaining costs that the primary insurance didn't cover. If there are still costs outstanding after the secondary payer has paid, the individual may be responsible for covering the remaining balance.
Medicare may act as the primary payer in several scenarios. For example, if an individual is under 65, entitled to Medicare based on disability, and covered under FEHB, Medicare will be the primary payer. If an individual is a federal employee receiving workers' compensation and is deemed unable to return to duty, Medicare will be the secondary payer, only paying for costs not covered by the workers' compensation policy.
The coordination of benefits between Medicare and other insurance policies can be complex, and it is important to understand how they interact to ensure proper coverage. For instance, if an individual has Medicare and private insurance, and Medicare is the primary payer, the individual's doctor or healthcare provider needs to be informed to ensure bills are sent to the correct payer and avoid delays.
In some cases, Medicare Advantage plans can be used to expand an individual's Medicare coverage beyond Original Medicare, often including extra benefits. However, when there is no coordination of benefits, Medicare and other insurance policies will not work together or complement each other. This can occur when an individual has a Medicare Advantage plan, Medicare and Marketplace insurance, or Veterans (VA) Benefits.
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Medicare and workers' compensation
Medicare beneficiaries who are still in the workforce may need to understand how workers' compensation works with their Medicare coverage. Workers' compensation is a state-administered program that pays for healthcare and other claims related to job-related injuries. When dealing with workers' compensation, the workers' compensation insurer is typically the primary payer, and Medicare becomes the secondary payer. This means that Medicare beneficiaries are required to apply for all applicable workers' compensation benefits first.
If you have a work-related injury or illness, workers' compensation will pay for any care related to your accident or injury. However, workers' compensation may not cover all the care you need. For example, if you have a pre-existing condition that was worsened by your job, workers' compensation might only pay for part of your care. In such cases, Medicare should cover any Medicare-covered services that workers' compensation does not pay for. If workers' compensation denies coverage for a Medicare-covered service, Medicare will pay for your care on a non-conditional basis, meaning you will not have to reimburse Medicare later.
If the workers' compensation insurer does not pay for your medical bills while your claim is pending or does not make a decision about paying your healthcare bills within 120 days, Medicare may make conditional payments. These conditional payments must be reimbursed from your work injury settlement, award, or other payment. To ensure proper coordination of benefits, it is important to contact the Medicare coordination of benefits contractor at 800-999-1118 and report your claim.
If you choose to settle your workers' compensation claim, it is important to be aware of your responsibility to reimburse Medicare for any conditional payments made on your behalf. This reimbursement is typically facilitated through a Workers' Compensation Medicare Set-Aside Agreement (WCMSA). A WCMSA is a financial agreement that allocates a portion of your workers' compensation settlement to pay for future medical services related to your work injury or illness. It is recommended to seek legal assistance when creating this set-aside agreement account. Before finalizing the settlement, your lawyer should contact the Medicare coordination of benefits contractor to obtain approval for the amount you plan to set aside. Once the WCMSA is established, you or the account manager must keep track of how the funds are used to demonstrate that the money was solely spent on injury-related medical and prescription drug bills.
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Medicare and TRICARE
Medicare is a federal health insurance program for people aged 65 or older, people under 65 with certain disabilities, and people of any age with end-stage renal disease, ALS (Lou Gehrig's disease), or mesothelioma. It is important to understand how Medicare works with other insurance plans, as it can be the primary or secondary payer. 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 rest of the balance to the "secondary payer".
TRICARE is a health care program for military personnel, and it can work in conjunction with Medicare. 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 for Medicare-covered services, and TRICARE may pay second. If you receive services from a military hospital or clinic, or any other federal healthcare provider, TRICARE pays.
It is important to note that if you are eligible for both TRICARE and Medicare Part A, you must also have Medicare Part B to keep your TRICARE coverage. You should sign up for Medicare benefits a few months before turning 65 to avoid a break in coverage. If you are receiving Social Security Disability payments, you will automatically receive Medicare Parts A and B in the 25th month of disability.
Additionally, the TRICARE pharmacy benefit is considered creditable coverage. If you are eligible for Medicare and go 63 continuous days or longer without creditable prescription drug coverage, you may have to pay higher premiums for a Medicare drug plan. You do not need Medicare Part D to keep TRICARE, but if you meet certain income and resource limits, Medicare may provide extra help to pay Part D premiums.
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Medicare and FEHB
Medicare and the Federal Employees Health Benefits (FEHB) program are two insurance plans that can work together to provide healthcare coverage for active or retired federal employees. FEHB covers federal employees, their family members, some former spouses, and former employees. Medicare, on the other hand, is a federally funded insurance plan typically available to individuals aged 65 years and older, although younger people with specific conditions may also qualify.
When an individual has both FEHB and Medicare, they have several options for managing their coverage:
- Keep FEHB and enroll in Medicare Parts A and B: In this case, both programs work together to cover healthcare costs, but the individual will owe premiums for both. Medicare becomes the primary payer, and FEHB acts as the secondary payer. This means that Medicare pays first, up to the limits of its coverage, and then FEHB pays for any remaining costs. This option provides nearly comprehensive coverage and allows for flexibility in provider choice, especially for those who travel or live abroad.
- Keep FEHB and enroll in Medicare Part A only: This option allows individuals to maintain their FEHB coverage while taking advantage of the additional benefits offered by Medicare Part A, which is often premium-free. Enrolling in Part A can help cover deductibles, coinsurance, and other costs beyond those covered by FEHB.
- Suspend FEHB and switch to Medicare Advantage: Retirees who choose this option must first be covered by Medicare Parts A and B to be eligible for Medicare Advantage. This option can be cost-effective, as most Medicare Advantage plans have zero-dollar premiums. However, it is important to note that FEHB coverage cannot be suspended separately from health coverage, so individuals must keep FEHB drug coverage if they wish to maintain their FEHB health coverage.
- Keep FEHB and decline Medicare: Individuals can choose to keep their FEHB coverage as their primary insurance and decline Medicare. However, it is recommended to consider enrolling in Medicare Part A if eligible for premium-free coverage, as it can provide additional benefits.
It is important to carefully navigate the options and make informed decisions based on individual needs to maximize coverage while minimizing costs. Additionally, it is worth noting that retirees have the option to cancel or suspend their FEHB coverage, but cancellation is permanent and irreversible. In contrast, suspension allows for a temporary pause, providing the flexibility to reinstate FEHB coverage during an open season later.
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Frequently asked questions
No, Medicare does not automatically become the primary insurance if you have other insurance. Your insurers must report to Medicare when they are the primary payer on your medical claims. The primary payer pays up to the limits of its coverage, and the secondary payer covers the remaining balance.
Medicare is the primary payer, and Medicaid pays last.
If your company has 100 or more employees, your employer insurance will be the primary payer. If your company has less than 100 employees, Medicare will be the primary payer.
Your workers' compensation policy will pay first if you are injured or become sick on the job. Medicare will pay first for any medical services unrelated to the workers' compensation claim.
