Orlando Harmon
When an individual has more than one health insurance plan, it is important to know which one is the primary insurance holder and which is secondary. This is because the primary payer pays up to the limits of its coverage, after which the secondary payer covers the remaining balance. Medicare is usually the primary payer for individuals aged 65 or older whose employer has less than 20 employees. However, if the employer has more than 20 employees, the employer-based plan is considered the primary insurer.
| Characteristics | Values |
|---|---|
| Definition of primary insurance holder | The primary insurance holder is the insurance company that is responsible for paying the claim first. |
| Medicare as primary payer | Medicare is the primary payer if the patient is 65 or older and their employer has less than 20 employees. |
| Medicare as secondary payer | If the patient's employer has 20 or more employees, their employer-based plan is the primary payer, and Medicare is the secondary payer. |
| Medicare Advantage plans | Medicare Advantage plans expand coverage beyond Original Medicare, and may include extra benefits. |
| TRICARE For Life (TFL) | TFL provides expanded medical coverage to Medicare-eligible uniformed services retirees 65 or older, and their eligible family members and survivors. |
| Workers' compensation | Medicare cannot pay for items or services that workers' compensation will pay for promptly. |
| Conditional payments | If the insurance company doesn't pay the claim promptly, Medicare may make a conditional payment to pay the bill, and then recover any payments the primary payer should have made later. |
| Coordination of benefits | The coordination of benefits is a process that helps ensure that each insurance company pays its own part of the claim without overlap. |
| Multiple insurance plans | When a patient has more than one insurance plan, it is important to know which one is primary and which is secondary to avoid denied claims and billing the patient for something that should have been covered. |
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What You'll Learn
Medicare and dual health insurance plans
In the United States, 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, after which the rest of the balance is sent to the "secondary payer". If the secondary payer doesn't cover the remaining balance, the patient may be responsible for the outstanding costs.
Medicare and Medicaid provide health coverage to 12.5 million individuals enrolled in both programs, known as "dual-eligible individuals". Medicare is the primary source of health insurance coverage for these individuals, and Medicaid, jointly funded by federal and state governments, provides supplemental coverage. Dual-eligible individuals can be covered under a variety of different arrangements, including traditional Medicare, Medicare Advantage plans, and plans specifically designed for this population ("dual-eligible plans").
Medicare Advantage plans have been categorized into dual-eligible plans and non-dual-eligible plans. Dual-eligible plans are defined as private plans or programs that are designed for people who are dually enrolled in Medicare and Medicaid and, to varying degrees, coordinate benefits across the two programs. Dual-eligible individuals are not required to enroll in a dual-eligible plan, although in some states, Medicare-Medicaid plans (MMPs) and Fully Integrated Dual-Eligible (FIDE) SNPs have the option to passively enroll dual-eligible individuals. FIDE SNPs provide Medicare and included Medicaid-covered services through a single managed care organization.
State Medicaid programs cover benefits that Medicare does not, such as long-term services and supports, non-emergency transportation, and a broader set of behavioural health services. Most dual-eligible individuals are eligible for the full range of Medicaid benefits not covered by Medicare and are referred to as "full-benefit" dual-eligible individuals. Medicaid also provides most full-benefit dual-eligible individuals with premium and, in many cases, cost-sharing assistance through the Medicare Savings Program.
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Primary and secondary payers
The primary payer is the insurance that pays first. It pays up to the limits of its coverage. The secondary payer is the insurance that pays second. It only pays if there are costs that the primary insurance didn't cover. Medicare may be the primary or secondary payer, depending on the situation.
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 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. This order of payment is called "coordination of benefits".
Medicare Secondary Payer (MSP) is the term generally used when Medicare does not have primary payment responsibility. When Medicare began in 1966, it was the primary payer for all claims except for those covered by Workers' Compensation, Federal Black Lung benefits, and Veteran’s Administration (VA) benefits. In 1980, Congress passed legislation that made Medicare the secondary payer to certain primary plans to shift costs from Medicare to the appropriate private sources of payment. The MSP provisions apply when Medicare is not the beneficiary’s primary health insurance coverage.
There are a few rules to determine whether Medicare or another insurance plan is the primary payer. A plan for which you are the subscriber or policyholder is automatically primary over one where you are not. If you are covered as a dependent on two plans, such as both parents' plans, the policyholder with the earlier birthdate is the primary payer. If you have group health plan coverage through an employer with 20 or more employees, the group health plan pays first, and Medicare pays second. If you are 65 or older and covered by a group health plan through your current employment, Medicare pays second. If you are self-employed and covered by a group health plan, Medicare pays second. If you are disabled and covered by a group health plan with 100 or more employees, the group health plan pays first, and Medicare pays second. If you have ESRD and are covered by a group health plan, the group health plan pays first, and Medicare pays second during the first 30 months of eligibility for Medicare.
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Medicare and Medicaid
Medicare is a federal health insurance programme primarily for citizens aged 65 and over, though it also covers younger people with disabilities. It consists of several parts, including hospital insurance (Part A) and medical insurance (Part B). Medicare can also include drug plans (Part D) that cover prescription drugs.
Medicaid, on the other hand, is a joint federal and state programme that assists certain low-income individuals, families, children, pregnant women, the elderly, and people with disabilities in covering their medical costs. The eligibility requirements and benefits offered by Medicaid vary by state. Generally, individuals must meet their state's rules regarding income, resources, and residency. Medicaid offers benefits not typically covered by Medicare, such as nursing home care and personal care services.
When an individual has both Medicare and Medicaid, they are considered "dually eligible." In this case, Medicare generally serves as the primary payer, covering Medicare-approved services and prescription drugs. Medicaid then steps in to cover additional costs, such as deductibles, coinsurance, copayments, and other drugs or services that Medicare doesn't cover.
The determination of which insurance is primary and which is secondary is crucial in coordinating benefits. The primary payer pays up to the limits of its coverage, after which the secondary payer covers any remaining balance. This order ensures that individuals receive the necessary coverage for their medical expenses.
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Medicare and employer insurance
Medicare is a health insurance programme for individuals 65 years old and over. Depending on the company's size, individuals can choose to enrol in Medicare immediately or delay enrolment. Medicare is meant to work with employer benefits to cover healthcare needs and help pay for medical expenses.
If you have Medicare and other health insurance, such as a group health plan, retiree coverage, or Medicaid, each type of coverage is called a "payer". The "primary payer" pays up to the limit of its coverage, then sends the rest of the balance to the "secondary payer". If the "secondary payer" doesn't cover the remaining balance, the patient may be responsible for the remaining costs. The order of payment is called "coordination of benefits".
The primary payer is usually the insurance plan where the patient is the subscriber or policyholder. The patient's own insurance is typically primary, and the insurance through their employer is also primary. If the patient is covered as a dependent on two plans, such as both parents' plans, the policyholder with the earlier birth date is the primary payer.
Medicare is the primary payer if the company has fewer than 20 employees. However, Medicare becomes the secondary payer if the employer is part of a group health plan with more than 20 employees. In this case, the group health plan is the primary payer, and Medicare pays out only after the employer's plan has paid its portion.
If the insurance company doesn't pay the claim promptly, the healthcare 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.
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Medicare and TRICARE
Medicare is a federal health insurance program for US citizens aged 65 and older, as well as those under 65 with certain disabilities, and those with end-stage renal disease, ALS (Lou Gehrig's disease), or mesothelioma.
TRICARE is a health care program that serves uniformed service members, retirees, and their families worldwide. It is important to understand how Medicare and TRICARE work together to ensure that you remain eligible for both.
If you are eligible for both TRICARE and Medicare Part A, you must also have Medicare Part B to keep your TRICARE coverage. You should sign up for Medicare Part B when you first become eligible to avoid a late enrollment penalty, which is a higher premium. If you are receiving Social Security disability payments, you will automatically get Medicare Part A and Part B in the 25th month of disability.
If you are under 65, you can enroll in TRICARE Prime or the US Family Health Plan, and your enrollment fees are waived. There is no fee for enrolling in TRICARE For Life, and it is available worldwide. TRICARE For Life is considered Medicare wraparound coverage for TRICARE-eligible beneficiaries who have Medicare Parts A and B. It offers secondary coverage after Medicare in the US and US Territories, and is the primary payer in other overseas locations.
When you have Medicare and TRICARE For Life, you can visit any authorized provider. In the US and US Territories, Medicare will be the primary payer. The provider will file the claim(s) with Medicare, which will pay the portion it is responsible for and then send the claim to the TRICARE For Life claims processor. TRICARE For Life will then pay its portion directly to the provider for the services it covers. Generally, you will have no out-of-pocket costs for services that both Medicare and TRICARE cover.
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Frequently asked questions
Primary insurance is the insurance company that is responsible for paying the claim first. The primary payer pays up to the limits of its coverage, and then the secondary payer covers the remaining balance.
Medicare is typically considered primary if the insured is 65 or older and their employer has fewer than 20 employees. A private insurer is the primary payer if the employer has 20 or more employees.
If you bill the wrong insurance first, the claim can get denied, causing payment delays. The patient might also get charged for something that should have been covered.
