Orlando Harmon
Medicare is a federal government health insurance program for people aged 65 or older, or those who meet other specific criteria. When it comes to insurance, there is a distinction between primary and secondary insurance. The primary payer covers costs up to the limits of its coverage, and the secondary payer covers any remaining costs that the primary insurance didn't cover. Medicare can be either primary or secondary insurance, depending on the situation. For example, if you have Medicare and another form of insurance, Medicare may be the primary payer, with the other insurance acting as the secondary payer. However, if you have Medicare and are seeking treatment at a veterans' facility, your VA benefits would be the primary payer, while Medicare would be the secondary payer. Supplemental coverage, such as Medicare Supplement Insurance (Medigap), can also help cover leftover costs for Original Medicare beneficiaries.
| Characteristics | Values |
|---|---|
| Primary payer | Pays up to the limits of its coverage |
| Secondary payer | Pays only if there are costs the primary insurance didn't cover |
| Medicare Advantage | Becomes the primary payer when you enrol in it |
| Medicare Supplement/Medigap | Secondary payer to Medicare; covers leftover costs for Original Medicare beneficiaries |
| Workers' compensation | Medicare won't pay for items or services that workers' compensation will pay for promptly |
| No-fault or liability insurance | Must pay first if the accident or injury is an open ongoing responsibility medical case |
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What You'll Learn
Medicare and other insurance
Medicare is a federal government health insurance program that provides health care coverage 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) regardless of age. When you have Medicare and another type of insurance, Medicare can be either your primary or secondary insurer.
The primary payer pays up to the limits of its coverage, and the secondary payer covers the remaining balance. If the secondary payer doesn't cover the remaining balance, you may be responsible for the remaining costs. If Medicare is your primary payer and your employer is the secondary payer, you'll need to join Medicare Part B before your employer insurance will pay for Part B services.
Medicare Advantage plans, also known as Medicare Part C, are offered by private companies and provide an alternative to Original Medicare. When you enroll in a Medicare Advantage plan, Medicare is no longer your primary source of coverage and becomes secondary. Medicare Supplement plans, also known as Medigap, provide supplemental coverage for leftover costs for Original Medicare beneficiaries. These plans are standardized, and in most states, they are named by letters like Plan G or Plan K. The benefits in each lettered plan are the same, regardless of the insurance company.
It's important to understand how Medicare coordinates with other insurance plans to ensure you have primary coverage. For example, if you have a workers' compensation claim, Medicare cannot pay for items or services that workers' compensation will promptly pay for. However, Medicare may make a conditional payment if the workers' compensation insurance company denies payment for your medical bills, pending their review.
Additionally, if you have VA benefits and Medicare, your VA benefits are your primary and only coverage when you go to a veterans' facility. On the other hand, Medicare becomes your primary and only coverage when you visit a civilian facility. By having both VA benefits and Medicare, you gain access to civilian and non-civilian doctors and hospitals.
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Primary and secondary payers
When you have Medicare and another type of insurance, Medicare is either your primary or secondary insurer. 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.
Medigap policies, or Medicare Supplement Insurance, are extra insurance you can buy from a private company to help pay your share of costs in Original Medicare. These policies are generally standardized across insurance companies, with price being the only difference. You typically need Part A and Part B to buy a Medigap policy, and you may pay a penalty if you don't join a Medicare drug plan when you first get Medicare. Medicare Supplement plans are secondary payers to Medicare. When you have a Medicare Supplement plan, Medicare will receive all claims first, and then bill the remainder to your Medicare Supplement carrier.
If Medicare is the primary payer and your employer is the secondary payer, you’ll need to join Medicare Part B before your employer insurance will pay for Part B services. Medicare Advantage plans, also known as Medicare Part C, are provided by private companies and act as secondary insurance. They expand your Medicare coverage beyond Original Medicare, often with extra benefits. When you enroll in a Medicare Advantage plan, Medicare is no longer your primary source of coverage.
There are separate rules for individuals who are Medicare-eligible due to End-Stage Renal Disease (ESRD). Patients with ESRD may qualify for Medicare coverage regardless of age. Additionally, if you have both Veterans' benefits and Medicare, your VA benefits are your primary and only coverage at veterans' facilities, while Medicare is your primary and only coverage at civilian facilities.
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Medicare Supplement/Medigap plans
Medicare Supplement Insurance, also known as Medigap, is extra insurance that can be purchased from a private health insurance company to cover out-of-pocket costs in Original Medicare. It is important to note that Medigap is only available to those who already have Original Medicare, specifically Part A (Hospital Insurance) and Part B (Medical Insurance). This means that Medicare is the "primary payer", covering costs up to the limits of its coverage, and Medigap acts as the "secondary payer", covering any remaining costs.
There is a six-month "Medigap Open Enrollment" period, which begins in the first month that an individual has Medicare Part B and is 65 or older. During this time, individuals can enrol in any Medigap policy, and insurance companies cannot deny coverage due to pre-existing health conditions. After this period, purchasing a Medigap policy may be more difficult or expensive. It is also important to note that Medigap policies are standardized, meaning that policies with the same letter offer the same basic benefits, regardless of the insurance company or location. However, in some states, there may be additional Medigap policies available, such as Medicare SELECT.
Medigap policies are designed to work in coordination with other types of insurance or coverage that an individual may have. This includes group health coverage, retiree coverage, or Medicaid. In cases where an individual has multiple types of insurance, it is important to determine the order of payment, or "coordination of benefits". The primary payer pays up to the limits of its coverage, and the secondary payer covers any remaining costs. If the secondary payer does not cover the full remaining balance, the individual may be responsible for any remaining costs.
In certain situations, Medicare may make a conditional payment if the primary payer does not pay a claim promptly. For example, if an individual has a liability or no-fault insurance claim, the provider must first try to receive payment from the insurance company before billing Medicare. Medicare will then recover any payments that the primary payer should have made. It is important to note that Medicare cannot pay for items or services that workers' compensation will promptly pay for, or if there is an open Workers' Compensation Medicare Set-Aside Arrangement (WCMSA). However, Medicare may make conditional payments in specific cases, such as when workers' compensation denies payment for medical bills, pending review of the claim.
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Medicare Advantage
Most Medicare Advantage Plans include drug coverage (Part D). There are several types of Medicare Advantage Plans, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Special Needs Plans (SNPs), Medicare Medical Savings Accounts (MSAs), and Private Fee-for-Service Plans (PFFS).
Before enrolling in a Medicare Advantage Plan, it is important to consult your employer, union, or benefits administrator, as joining one might cause you to lose your current coverage, including that of your spouse and dependents. Additionally, certain plans may only be available in specific counties, and companies can decide to join or leave Medicare each year.
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Workers' compensation
It is important to note that Medicare cannot pay for items or services that workers' compensation will pay for promptly. Additionally, there may be instances where there is an open Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) or an ongoing responsibility for medicals case, in which case Medicare may not be able to make a conditional payment. A WCMSA is a financial agreement that sets aside a portion of a workers' compensation settlement to pay for future medical services related to the injury, illness, or disease. This account can be used to repay Medicare for any conditional payments made.
To ensure proper coordination of benefits, it is recommended to call the Medicare coordination of benefits contractor when filing a claim with your workers' compensation insurer. Before settling a workers' compensation claim, it is important to consult a lawyer to set up a WCMSA and determine the amount to be set aside. The lawyer should also typically contact the Medicare coordination of benefits contractor to obtain approval for the amount. Once the WCMSA is established, all funds in the account must be used for medical bills related to the injury, illness, or disease before Medicare will pay for any treatment related to the same condition.
In cases where workers' compensation does not make a decision about paying your healthcare bills within 120 days, Medicare may make a conditional payment. This means that Medicare will temporarily pay for services related to your injury or illness, with the understanding that they will be reimbursed once the workers' compensation claim is settled or a final decision is reached. It is important to note that if workers' compensation denies coverage for a Medicare-covered service, Medicare should pay for your care on a non-conditional basis, and you will not have to repay Medicare at a later date.
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Frequently asked questions
Primary insurance is the insurance that pays first. The primary payer pays up to the limits of its coverage.
Secondary insurance is any insurance that pays second. The secondary payer only pays if there are costs the primary insurance didn't cover.
Medicare is the primary and only coverage when you go to a civilian facility. Medicare is also the primary payer if you have no other insurance.
Medicare is secondary insurance when you have other insurance coverage, such as from a group health plan, retiree coverage, or Medicaid. Medicare Advantage plans are also considered secondary insurance.
Medicare Supplemental Insurance, also known as Medigap, is extra insurance that helps pay your share of costs in Original Medicare. Medigap policies are standardized and offered by private companies.
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