Orlando Harmon
If you already have insurance and are wondering how Medicare works, it's important to know that Medicare is different from private insurance and doesn't offer plans for couples or families. When you have both Medicare and private insurance, one insurance will be the primary payer and the other will be the secondary payer. The primary payer pays up to the limits of its coverage and then sends the remaining balance to the secondary payer. If you have Medicare Part A (Hospital Insurance) or Part C (Medicare Advantage), you won't qualify for savings to lower your costs in a Marketplace plan. However, there are situations where you can choose a Marketplace private health plan instead of Medicare, such as if you're paying a premium for Part A. You can also buy supplemental insurance called Medigap to help pay your share of costs in Original Medicare, but if you're under 65, you might not be able to buy a Medigap policy or you may have to pay more.
| Characteristics | Values |
|---|---|
| Medicare and other insurance | If you have Medicare and other health insurance, each type of coverage is called a "payer." |
| Primary and secondary payers | The "primary payer" pays up to the limits of its coverage, then sends the remaining balance to the "secondary payer." |
| Order of payment | This is called "coordination of benefits." |
| Medicare and Marketplace coverage | Marketplace coverage doesn't lower your Medicare out-of-pocket costs and isn't used in place of Medicare Part B. |
| Medicare and private insurance | Medicare is different from private insurance as it doesn't offer plans for couples or families. |
| Medicare and Medicaid | Medicare Supplement Insurance (Medigap) and Medicaid can help pay your share of costs. |
| Medicare and employer insurance | Employer insurance can also help pay your share of costs. |
| Medicare Part A | Most people get Part A for free, but some have to pay a premium for this coverage. |
| Medicare Part B | You may need to sign up for Medicare Part B if your group health plan or retiree coverage is the secondary payer. |
| Medicare Part D | You can add Medicare drug coverage (Part D) to your plan. |
| Medicare Advantage | You can join a Medicare Advantage Plan to get some extra benefits, like vision, hearing, and dental. |
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What You'll Learn
Primary and secondary payers
If you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" is responsible for paying a claim up to the limits of its coverage. The "secondary payer" pays if there are any remaining costs that the primary insurance didn't cover. This order of payment is called "coordination of benefits".
Medicare remains the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. However, there are certain instances where Medicare is the secondary payer. For example, if an individual is 65 or older and covered by a Group Health Plan (GHP) through their current employment or their spouse's current employment, the GHP pays primary and Medicare pays secondary. If an individual is 65 or older and is self-employed, the same rule applies, provided that the employer has 20 or more employees.
If an individual has End-Stage Renal Disease (ESRD), is covered by a GHP, and is in the first 30 months of eligibility for Medicare, the GHP pays primary and Medicare pays secondary during this 30-month coordination period. The same rule applies if the individual has ESRD and is covered by a Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) plan during their first 30 months of eligibility for Medicare.
In some cases, Medicare may make a conditional payment to pay the bill if the insurance company doesn't pay the claim promptly (usually within 120 days). Medicare will then recover any payments that the primary payer should have made.
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Medicare and Marketplace plans
Medicare is a federal health insurance program for people aged 65 and over, as well as certain younger people with disabilities, and those with End-Stage Renal Disease (ESRD).
If you have Medicare, you do not need additional coverage from the Health Insurance Marketplace. Medicare Part A (Hospital Insurance) and Part C (Medicare Advantage) are sufficient, and you will not qualify for savings to lower your costs with a Marketplace plan.
However, there are a few situations where you can choose a Marketplace plan instead of Medicare. Firstly, if you are paying a premium for Medicare Part A, you can drop Part A and Part B (Medical Insurance) and opt for a Marketplace plan. Secondly, if you are eligible for Medicare but have not signed up due to having to pay a premium for Part A or having a medical condition like ESRD, you can choose a Marketplace plan.
It is important to note that if you have Medicare and do not end your Marketplace coverage, you may have to pay back some or all of the premium tax credit when filing your federal income taxes. Additionally, if you have Medicare and other health insurance, each type of coverage is considered a "payer". The "primary payer" pays up to its limit, then sends the remaining balance to the "secondary payer". If the secondary payer does not cover the remaining balance, you may be responsible for the outstanding costs.
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Medicare Supplement Insurance (Medigap)
If you already have insurance and are considering Medicare, it's important to understand how these two coverage types interact. Each type of coverage is called a "payer". The “primary payer" pays up to the limits of its coverage and then sends the remaining balance to the "secondary payer". If the secondary payer doesn't cover the remaining balance, you may be responsible for the remaining costs.
Medicare Supplement Insurance, also known as Medigap, is extra insurance that you can purchase from a private health insurance company. It helps cover your share of out-of-pocket costs in Original Medicare (Part A and Part B). Medigap policies are standardised, and in most states, they are named by letters, like Plan G or Plan K. The benefits offered in each lettered plan are the same, regardless of the insurance company. The price is the only difference between policies with the same letter sold by different companies.
Generally, to be eligible to purchase a Medigap policy, you must already have Original Medicare (Part A and Part B). In some cases, if you don't buy a Medigap policy within 6 months of getting Part A and Part B, you may not be able to purchase a Medigap policy, or you may have to pay a higher price. It's important to note that Medigap policies typically do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. However, some Medigap policies offer coverage when you travel outside the US.
If you're under 65, there may be restrictions on purchasing a Medigap policy, and you might have to pay more. Additionally, if you're paying a premium for Part A, you can choose to drop Part A and Part B and enrol in a Marketplace plan instead. It's recommended to consider your specific needs and seek advice from your local State Health Insurance Assistance Program (SHIP) to make an informed decision about your coverage options.
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Medicare Advantage Plans
If you already have insurance and want to understand how Medicare works, it's important to know that you can't be sold a Marketplace policy if you have Medicare. Medicare Advantage Plans, also known as "Part C" or "MA plans", are offered by Medicare-approved private companies that must follow rules set by Medicare. These plans provide Part A (Hospital Insurance) and Part B (Medical Insurance) benefits, and you must have both parts to join a Medicare Advantage Plan.
Before enrolling in a Medicare Advantage Plan, it's crucial to talk to your employer, union, or benefits administrator about their rules, as joining one might cause you to lose your existing coverage, including that of your spouse and dependents. Additionally, Medicare Advantage Plans can disenroll you for various reasons, such as moving outside their service area or losing Medicare eligibility.
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Medicare Part A and Part B
Medicare is federal health insurance for anyone aged 65 and older and some people under 65 with certain disabilities or conditions. If you already have insurance and are eligible for Medicare, you will be automatically enrolled when you turn 65. 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 then sends the rest of the balance to the "secondary payer". If the secondary payer doesn't cover the remaining balance, you may be responsible for the rest of the costs.
Now, Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. If you are paying a premium for Part A, you can drop it and get a Marketplace plan instead. However, if you can't afford the monthly premiums, there are programs to help lower the costs.
Medicare Part B is Medical Insurance. If you have only Part B, you can still get a Marketplace plan to cover you before your Medicare begins. You may need to sign up for Part B before your insurance pays if Medicare is the primary payer.
Original Medicare includes Part A and Part B. You must have both to buy a Medigap policy or join a Medicare Advantage Plan. You can also add Medicare drug coverage (Part D) to either Part A or Part B.
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Frequently asked questions
Medicare is a health insurance program that covers most, but not all, of the costs for approved health care services and supplies. It is different from private insurance and doesn't offer plans for couples or families.
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." If the secondary payer doesn't cover the remaining balance, you may be responsible for the remaining costs.
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.
Yes, there are a few situations where you can choose a Marketplace plan instead of Medicare. For example, if you're paying a premium for Part A, you can drop Part A and Part B and get a Marketplace plan.
