Jeffrey Wade
Medicare is a federal government health insurance program that provides healthcare coverage for people over 65 or those who receive Social Security Disability Insurance (SSDI) or have End-Stage Renal Disease (ESRD). Medicare can act as both primary and secondary insurance, depending on the situation. When a person has two insurance plans, the Coordination of Benefits rule decides which one pays first. In most cases, Medicare is the primary payer, but there are instances where it can act as the secondary payer, covering deductibles, copayments, and other out-of-pocket costs that the primary insurance doesn't cover.
| Characteristics | Values |
|---|---|
| Primary payer | The insurance that pays first up to the limits of its coverage |
| Secondary payer | The insurance that pays second and covers any costs the primary payer didn't cover |
| Medicare as primary payer | When an individual has Medicare and another insurance plan, Medicare is usually the primary payer |
| Medicare as secondary payer | When Medicare is the secondary payer, it covers deductibles, co-payments, and other out-of-pocket costs that the primary payer doesn't cover |
| Coordination of benefits | The process used to determine which health insurance plan pays first when covered by multiple insurance plans |
| Workers' compensation | Medicare may make a conditional payment if the workers' compensation insurance company denies payment for medical bills |
| Group health plan | If an individual has a group health plan and Medicare, the group health plan usually pays first, and Medicare is the secondary payer |
| Medicaid | If an individual has both Medicare and Medicaid, Medicare is the primary payer and Medicaid is the secondary payer |
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What You'll Learn
Medicare as a primary payer
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, then sends the remaining balance to the "secondary payer". The secondary payer only pays if there are costs that the primary payer didn't cover. This order of payment is called "coordination of benefits".
Medicare as the primary payer means that it pays first up to the limits of its coverage. If there is a balance that Medicare didn't cover, the secondary payer will pay. However, the secondary payer might not pay all of the uncovered costs. In some cases, you may be responsible for any remaining costs.
If Medicare is the primary payer and your employer is the secondary payer, you may need to join Medicare Part B before your employer insurance will pay. It is important to inform your doctor and other healthcare providers if you have coverage in addition to Medicare. This will help them send your bills to the correct payer and avoid delays.
Medicare doesn't automatically know if you have other coverage. However, your insurers must report to Medicare when they are the primary payer on your medical claims. Your healthcare provider, employer, or insurer may ask questions about your current coverage and report that information to Medicare. You may also be asked about other coverage at the time of enrollment.
If you have questions about who pays your Medicare bills first, you can contact your insurance provider or Medicare's Benefits Coordination & Recovery Center (BCRC).
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Medicare as a secondary payer
Medicare is a federal government health insurance program that provides health care coverage for people over 65 or those who receive Social Security Disability Insurance (SSDI) for 24 months, or begin receiving SSDI due to ALS/Lou Gehrig's Disease, or have End-Stage Renal Disease (ESRD) regardless of age. Medicare beneficiaries do not have to rely solely on Medicare for their healthcare coverage. They can use other insurance plans to access more services and reduce their healthcare spending.
When an individual has two insurance plans, the Coordination of Benefits rule decides which one pays first. The insurance that pays first is called the "primary payer" and it covers healthcare costs up to the limits of its coverage. The "secondary payer" then covers some or all of the remaining costs that the primary payer does not cover. Medicare can be the primary payer or the secondary payer.
Medicare as secondary insurance is often referred to as "Medigap" or a Medicare Supplement Insurance plan. It covers deductibles, co-payments, and other out-of-pocket costs that the primary insurance doesn't cover, reducing the financial burden. This ensures that the individual has comprehensive healthcare coverage without substantial out-of-pocket expenses when using Medicare services.
It is important to note that even with primary and secondary insurance, there may still be some out-of-pocket costs that are not fully covered. Individuals should inform their doctors and healthcare providers if they have coverage in addition to Medicare, to ensure that their bills are sent to the correct payer and avoid delays.
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Coordination of Benefits rule
When a person has Medicare and other health insurance, each type of coverage is called a "payer". The "Coordination of Benefits" (COB) rule determines which insurance plan has primary payment responsibility and the extent to which the other plans will contribute. The COB process ensures that the primary payer, whether Medicare or other insurance, pays first. The insurance that pays first (primary payer) pays up to the limits of its coverage. The insurance that pays second (secondary payer) only pays if there are costs the primary insurance didn't cover.
COB applies when you or your dependents have health coverage under Medicare, worker’s compensation, or motor vehicle or homeowner’s insurance. If you have employer or union coverage and get Medicare drug coverage, you may lose your employer or union health and drug coverage for yourself and your dependents. If this happens, you may not be able to get your employer or union coverage back.
In general, under Medicare, working status and group size determine when Medicare is primary. The employer plan is primary for people who are 65 or older, still working for an employer with 20 or more employees, and eligible for Medicare. If the employer has fewer than 20 employees, Medicare is primary. If you retire, are eligible for Medicare, and retain coverage under your employer's plan, Medicare is primary.
The Benefits Coordination & Recovery Center (BCRC) takes actions to identify the health benefits available to a beneficiary and coordinates the payment process to prevent mistaken payment of Medicare benefits. The BCRC does not process claims, nor does it handle any group health plan-related mistaken payment recoveries or claims-specific inquiries. The Medicare Administrative Contractors (MACs), Intermediaries, and Carriers are responsible for processing claims submitted for primary or secondary payment.
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Workers' compensation
When it comes to workers' compensation, Medicare typically acts as the secondary payer. This means that if you have workers' compensation coverage due to a job-related injury or illness, your workers' compensation insurance will be the primary payer, covering the costs of health care items or services related to your claim. Medicare generally will not pay for injuries or illnesses covered by workers' compensation.
However, there may be instances where Medicare can make a conditional payment. If the workers' compensation insurance company denies payment for your medical bills or there is evidence that they will not pay promptly, Medicare may step in and make a conditional payment to ensure that you do not have to use your own money. It is important to note that Medicare will later recover these payments from the primary payer or the Workers' Compensation Medicare Set-aside Arrangement.
In certain situations, Medicare may act as the primary payer before your workers' compensation claim is approved. Once your claim is approved, workers' compensation will reimburse Medicare, and you will also be reimbursed for any copayments or coinsurance you made.
It is important to inform your doctor and other healthcare providers if you have coverage in addition to Medicare. This will help ensure that your bills are sent to the correct payer and avoid any delays in payment.
If you are a federal employee receiving workers' compensation and are determined unable to return to duty, your coverage as a federal employee will be primary, and Medicare will be your secondary coverage.
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Group health plans
Medicare can work with other insurance plans, including group health plans, to cover healthcare costs. When an individual has Medicare and is also covered by a group health plan, one insurance plan is designated as the "primary payer" and the other as the "secondary payer". The primary payer pays up to the limits of its coverage, after which the secondary payer covers the remaining balance, if any. This order of payment is called "coordination of benefits".
The determination of which insurance is the primary payer and which is the secondary payer depends on the type of insurance and the number of employees in the group health plan. If an individual has Medicare and is covered by a group health plan through their current employment or their spouse's current employment, Medicare is the primary payer if the employer has fewer than 20 employees. If the employer has 20 or more employees, the group health plan is the primary payer, and Medicare is the secondary payer.
Medicare as a secondary payer, often referred to as "Medigap" or "Medicare Supplement Insurance plan", fills the gaps left by Original Medicare. It covers deductibles, co-payments, and other out-of-pocket costs that the primary insurance doesn't cover, reducing the financial burden. This ensures comprehensive healthcare coverage without substantial out-of-pocket expenses when using Medicare services.
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Frequently asked questions
The primary payer is the insurer that covers most costs and pays first for your medical bills.
The secondary payer is the insurer that covers some or all of the remaining costs that the primary payer does not cover.
Yes, Medicare can act as a secondary payer in some cases. When Medicare is the secondary payer, the primary payer pays first and passes the remaining amount to Medicare.
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