Jeffrey Wade
It is possible to have both private insurance and Medicare coverage at the same time, which is known as dual coverage. When an individual has dual coverage, a process called coordination of benefits determines which insurance provider pays first. This provider is known as the primary payer and will pay up to the limits of its coverage. The secondary payer then pays for the costs that the primary payer does not cover. Medicare is a federal insurance program for people over 65 and for certain people with disabilities, while private health insurance is provided by private companies.
| Characteristics | Values |
|---|---|
| Can you have both private insurance and Medicare? | Yes |
| What is it called when you have both? | "Dual coverage" |
| Who is the "primary payer"? | The insurance that pays up to the limits of its coverage |
| Who is the "secondary payer"? | The insurance that pays for costs that the primary payer doesn't cover |
| Who decides which insurance is the primary payer? | The type of private insurance and individual situation |
| What if the secondary payer doesn't cover the remaining balance? | You may be responsible for the remaining costs |
| What is "coordination of benefits"? | A process that determines which insurance provider pays first |
| What is a "conditional payment"? | Medicare may make a conditional payment if the insurance company denies payment for medical bills |
| What is Medicare? | A federal insurance program for people over 65 and certain people with disabilities |
| What is private insurance? | Insurance provided by private companies |
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What You'll Learn
Understanding primary and secondary payers
Medicare can work alongside other health insurance plans to cover costs and services. Each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, then sends the rest of the balance to the "secondary payer". The secondary payer then covers the remaining costs, such as copayments or coinsurance.
The primary payer is the insurer that has the primary responsibility for paying a claim. The insurance that pays first is typically Medicare, which covers most of the costs once you're enrolled in benefits. However, this can depend on the type of private insurance you have and your individual situation. In some cases, Medicare may be the secondary payer. For example, if you have a non-tribal group health plan coverage through an employer with 20 or more employees, the non-tribal group health plan pays first, and Medicare pays second. If you have retiree coverage, Medicare pays first, and your retiree coverage pays second. If you have ESRD, your group health plan pays first during a 30-month coordination period, regardless of the company's number of employees.
If the secondary payer doesn't cover the remaining balance, you may be responsible for the rest of the costs. If the insurance company doesn't pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare. Medicare may make a conditional payment to pay the bill, and then later recover any payments the primary payer should've made.
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Medicare and private insurance: Who pays first?
It is possible to have both private insurance and Medicare at the same time. When you have both, a process called "coordination of benefits" determines which insurance provider pays first. This provider is called the "primary payer". Once the payment order is determined, the primary payer pays for any covered services until the coverage limit has been reached. The other provider, the "secondary payer", pays for costs that the primary payer doesn't cover. However, the secondary payer may not cover all the remaining costs, in which case you may be responsible for the remaining balance.
Whether Medicare or your private insurance pays first depends on the specific circumstances and the type of private insurance you have. For example, if you are on active duty, TRICARE pays first for Medicare-covered services, and Medicare pays second. If you are not on active duty, Medicare pays first, and TRICARE may pay second. If you are 65 or older and your employer has 20 or more employees, your group health plan pays first, and Medicare pays second. If your employer has fewer than 20 employees, Medicare pays first.
If your insurance company doesn't pay your claim promptly (usually within 120 days), your doctor or other provider may bill Medicare. Medicare may make a conditional payment to pay the bill and then recover any payments the primary payer should have made later.
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Medicare and private insurance: Enrollment
Medicare is a federal health insurance program for people aged 65 and over, as well as younger people with disabilities. It is possible to have both private insurance and Medicare at the same time. When an individual has both, a process called "coordination of benefits" determines which insurance provider pays first. This provider is called the "primary payer". The primary payer pays for any covered services until the coverage limit has been reached. The other insurance provider, known as the "secondary payer", then pays for costs that the primary payer doesn't cover.
Individuals can enrol in Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) if they meet certain criteria. Most people get Part A for free, but some have to pay a premium for this coverage. To be eligible for premium-free Part A, an individual must be entitled to receive Medicare based on their own earnings or those of a spouse, parent, or child. To receive premium-free Part A, the worker must have a specified number of quarters of coverage (QCs) and file an application for Social Security or Railroad Retirement Board (RRB) benefits. The exact number of QCs required depends on whether the person is filing for Part A based on age, disability, or End-Stage Renal Disease (ESRD).
Individuals who must pay a premium for Part A do not automatically get Medicare when they turn 65. They must file an application to enrol by contacting the Social Security Administration and enrolling in or already having Part B. To keep premium Part A, the person must continue to pay all monthly premiums and stay enrolled in Part B. This means that the person must pay both the premium for Part B and the premium for Part A timely to keep this coverage.
Individuals who receive Social Security disability benefits will automatically begin receiving Medicare Parts A and B after 24 months. If an individual has Lou Gehrig's Disease (ALS), they will receive Medicare Parts A and B immediately when they enrol in Social Security disability benefits.
Individuals can join, switch, or drop a Medicare Advantage Plan (Part C), other Medicare health plan, or Medicare drug plan (Part D) at certain times, called enrollment periods. If an individual joined a Medicare Advantage Plan during their Initial Enrollment Period, they can change to another Medicare Advantage Plan (with or without drug coverage) or go back to Original Medicare (with or without a drug plan) within the first 3 months of having Medicare Part A and Part B.
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Medicare and private insurance: Benefits and claims
It is possible to have both private insurance and Medicare at the same time. When you have both, a process called "coordination of benefits" determines which insurance provider pays first. This provider is called the "primary payer". Once the payment order is determined, the primary payer pays for any covered services until the coverage limit has been reached. The other payer, the "secondary payer", pays for costs that the primary payer doesn't cover. However, the secondary payer may not cover all the remaining costs, in which case you may be responsible for the rest of the bill.
The provider who is the primary payer can depend on the type of private insurance you have and your individual situation. For example, if you are 65 or older, in companies with 20 or more employees, your group health plan pays first. In companies with fewer than 20 employees, Medicare pays first. If you have a disability or ALS, in companies with 100 or more employees, your group health plan pays first. When a company has fewer than 100 employees, Medicare pays first. If you have ESRD, your group health plan pays first during a 30-month coordination period, regardless of the company's number of employees or whether you're retired.
Medicare Supplement Insurance (Medigap) is extra insurance that you can buy from a private company to help pay your share of costs in Original Medicare. Generally, you need Part A and Part B to buy a Medigap policy. Some Medigap policies offer coverage when you travel outside the US. Generally, Medigap policies do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. If you're under 65, you might not be able to buy a Medigap policy, or you may have to pay more.
If you have questions or concerns about what's covered and which provider pays first, you can reach out to several sources, including Medicare, the Social Security Administration (SSA), your State Health Insurance Assistance Program (SHIP), and the United States Department of Labor.
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Medicare and private insurance: Managing costs
Medicare and private insurance can work together, but managing costs across the two can be a complicated process. This is because a process called "coordination of benefits" determines which insurance provider pays first. This provider is called the "primary payer". Once the payment order is determined, the primary payer pays for any covered services until the coverage limit has been reached. The "secondary payer" then pays for costs that the primary payer doesn't cover, but it may not cover all costs.
The provider that is the primary payer depends on the type of private insurance you have and your individual situation. In some cases, Medicare may be the primary payer, while in other cases, it may be the secondary payer. For example, if you have a non-tribal group health plan through an employer with 20 or more employees, the group health plan pays first. However, if your employer has fewer than 20 employees, Medicare pays first.
Medicare premiums only cover one person, whereas private insurers may extend coverage to other family members, such as dependents. The cost of private insurance varies by plan type and coverage level, and some employers provide private insurance as a benefit. People should assess what they need from health insurance to help guide their plan choices.
Private insurance companies in the US spend between 12 and 18% on administration costs, whereas the cost of administering the Medicare program is around 2%. Experts suggest that this is because private insurers take on more responsibility than simply paying claims or occasionally going after fraud. Before a claim is even filed, they check its appropriateness, assess whether it is medically necessary, and whether it can be done in a cheaper way.
According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2% of operating expenditures. Medicare administrative cost figures include the collection of Medicare taxes, fraud and abuse controls, and building costs. Defenders of the insurance industry estimate administrative costs as 17% of revenue. Insurance industry-funded studies exclude private plans' marketing costs and profits from their calculation of administrative costs.
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Frequently asked questions
Yes, you can have both private insurance and Medicare coverage at the same time. This is known as "dual coverage".
The primary payer pays for any covered services until the coverage limit has been reached. The primary payer is usually determined by the type of private insurance you have and your individual situation. You can use Medicare's "Who Pays First" tool to check which one of your health coverages is primary.
If the primary payer doesn't cover all the costs, the secondary payer will pay as the primary payer for any remaining covered services. However, the secondary payer may not pay the full remaining cost, in which case you must pay any remaining billed amount.
The process of coordinating benefits is called "coordination of benefits". This determines which insurance provider pays first.
If you have questions or concerns about what's covered and which provider pays first, you can reach out to Medicare, Social Security Administration (SSA), State Health Insurance Assistance Program (SHIP), or the United States Department of Labor.
