Orlando Harmon
Medicare is a 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 your age. When you have Medicare and another insurance plan, one insurance is the primary payer and the other is the secondary payer. The primary payer pays your medical costs first, and then the rest of the bill is sent to the secondary payer. Medicare may be the primary or secondary payer depending on the situation and what your other health insurance is.
| Characteristics | Values |
|---|---|
| What is Medicare? | 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) no matter your age. |
| Medicare as primary payer | If you have Medicare and another insurance plan, one insurance pays first, and one pays second. These are called primary and secondary payers. Medicare is the primary payer if you're a retired federal employee. |
| Medicare as secondary payer | If Medicare is the primary payer, it pays your medical costs first, and then the rest of the bill is sent to the secondary payer. If you're on active duty, Medicare is the secondary payer. |
| Medicare's "coordination of benefits" rule | Determines when Medicare is the primary insurance and when your other health coverage is the secondary insurance. |
| Conditional payment | If the insurance company doesn't pay the claim promptly, your provider may bill Medicare. Medicare may make a conditional payment to pay the bill, and then will recover any payments the primary payer should have made later. |
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What You'll Learn
Medicare as primary payer
Medicare is a federal government health insurance program that provides health care coverage for people aged 65 or older, or those who are under 65 and meet certain criteria, such as receiving Social Security Disability Insurance (SSDI) or having End-Stage Renal Disease (ESRD). When an individual has Medicare and another form of health insurance, such as group health insurance, retiree coverage, or Medicaid, 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".
Medicare can act as either the primary or secondary payer, depending on various factors. For instance, if an individual has group employer coverage through a small employer (less than 20 employees), Medicare typically serves as the primary payer, while the group insurance plan is secondary. In this scenario, Medicare pays first for any covered services, and the group insurance plan may cover additional costs. However, if the employer has 20 or more employees, the group insurance plan usually becomes the primary payer, making Medicare the secondary payer.
There are exceptions to these general rules. For instance, in rare cases, if an individual's group health plan is self-insured, Medicare may act as the primary payer, even if the employer has more than 20 employees. Additionally, for individuals under 65 with ESRD, Medicare typically serves as the primary payer, regardless of the size of their employer.
It is important to note that Medicare beneficiaries should inform their healthcare providers about their coverage status. This helps ensure that bills are sent to the correct payer and avoids potential delays in payment.
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Medicare as secondary payer
Whether Medicare is your primary insurance or not depends on which insurance is considered the "primary payer" and which is the "secondary payer". The primary payer has the primary responsibility for paying a claim and will pay up to the limits of its coverage. The secondary payer only pays if there are costs that the primary insurance didn't cover.
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 secondary payer. This is known as the Medicare Secondary Payer (MSP). In this case, Medicare does not have primary payment responsibility, meaning another entity is responsible for paying before Medicare.
There are several situations in which Medicare is the secondary payer. For example, if you are covered by a group health plan through your employer, Medicare may be the secondary payer. If you are enrolled in Original Medicare, Medicare may also make a conditional payment for your medical or drug claims if they do not know that the claims are related to your workers' compensation settlement. In this case, Medicare must be repaid from the Workers' Compensation Medicare Set-Aside Arrangement.
It is important to note that Medicare does not automatically know if you have other coverage. Therefore, you should 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.
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Medicare with other insurance
Medicare can be combined with other insurance plans, including private insurance, employer-sponsored plans, and Tricare military health insurance. This combination is known as "coordination of benefits," where the primary payer covers the costs up to the limits of its coverage, and the secondary payer covers any remaining balance.
When you have both Medicare and another insurance plan, one of them becomes the primary payer and the other the secondary payer. The primary payer is responsible for paying first, and the secondary payer covers any remaining costs that the primary payer doesn't cover. Whether Medicare is your primary or secondary payer depends on various factors, including the type of private insurance you have, your individual situation, and the number of employees your employer has.
For example, if you have Medicare and private insurance through your employer, Medicare may be the primary payer if your company has fewer than 100 employees. On the other hand, if your company has 100 or more employees, your group health plan through your employer may be the primary payer, and Medicare would be the secondary payer.
It's important to note that even with a primary and secondary payer, you may still have out-of-pocket expenses for your healthcare. Additionally, if you have employer-based insurance and Medicare but seek services outside of your insurance network, neither Medicare nor your insurance plan may pay for the care. Therefore, it is crucial to understand the terms of your insurance plans and how they coordinate benefits.
To ensure proper billing and avoid delays, inform your doctor and other healthcare providers about your Medicare and additional insurance coverage. This way, they can send your bills to the correct payer. If you have questions about which insurance is primary or secondary, you can contact the Benefits Coordination & Recovery Center or consult with your healthcare provider.
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Medicare and Medicaid
Medicare is a federal health insurance program for people over 65, younger people with disabilities, and people with End-Stage Renal Disease. It is the primary payer for those who have no other insurance coverage. However, if you have other insurance, such as employer-provided health insurance, Medicare becomes the secondary payer. This means that it will only pay for costs that your primary insurance doesn't cover.
Medicaid, on the other hand, is a joint federal and state program that helps cover medical costs for certain low-income people, families, children, pregnant women, the elderly, and people with disabilities. Each state has its own eligibility requirements, which generally relate to income and resources, and may include being a resident of the state. Medicaid offers benefits not typically covered by Medicare, such as nursing home care and personal care services. If you have both Medicare and Medicaid, Medicare pays first for Medicare-covered services, and Medicaid may cover the remaining costs, including Medicare premiums and deductibles.
If you have Medicare and other health insurance, it is important to inform your doctor and healthcare providers so that they can send your bills to the correct payer and avoid delays. The order of payment is called "coordination of benefits". If your insurance company does not pay the claim promptly, your healthcare provider may bill Medicare, which may make a conditional payment and then recover any payments that the primary payer should have made.
It is worth noting that Medicare Advantage Plans can expand your Medicare coverage beyond Original Medicare, often with extra benefits. Similarly, if you are eligible for both Medicare and Medicaid, you will automatically be enrolled in a Medicare drug plan, but Medicaid may still cover some drugs that Medicare does not.
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Medicare and employer insurance
If you have Medicare and other health insurance (like from an employer group health plan), 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". If the “secondary payer” doesn’t cover the remaining balance, you may be responsible for the rest of the costs.
If you have employer or union coverage and get Medicare drug coverage, you may lose your employer or union health and drug coverage (for you and your dependents). If this happens, you may not be able to get your employer or union coverage back.
If you have Medicare and are still working at 65, you can delay signing up for Part B (Medical Insurance) without penalty. Once you stop working or lose your health insurance, you have an 8-month Special Enrollment Period (SEP) when you can sign up for Medicare without penalty.
If your employer has 20 or more employees, you can delay signing up for Medicare without any late enrollment penalties. If your company has fewer than 20 employees, Medicare is the primary payer. If your employer has 20 or more employees, Medicare is the secondary payer. In this case, your group health plan is the primary payer, and Medicare pays out only after your employer’s plan has paid its portion.
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Frequently asked questions
A primary payer pays your medical costs first.
The secondary payer pays its share of any remaining medical costs.
Medicare is the primary payer if you’re a retired federal employee. It is also the primary payer if you are 65 or older, are under 65 and have received 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) no matter your age.
If you are a federal employee receiving workers' compensation, Medicare is your secondary coverage and doesn’t pay for services covered by workers’ compensation.
