How Does Medicare Work with Other Insurance?
If you’re looking into Medicare enrollment. it’s important to know how Medicare coordinates with other coverage(s), including group health insurance, Medicaid, disability, and other coverage. Each type of coverage is referred to as a “payer.” When there is more than one payer, the “coordination of benefits” rule determines who pays first. 1
The plan that pays first is called the “primary payer,” and the plan that pays second is the “secondary payer.” Primary insurers pay first, and secondary insurers generally pay some or all of the unpaid portion of covered health care expenses after the primary insurer has paid. Let’s look at who pays in different scenarios.
1: You’re 65 or older and have group health coverage through your own or your spouse’s employer. In this situation, you are entitled to Medicare; should you decide to enroll in Medicare, which plan pays first depends on the number of employees at your company.
- If your employer has 20 or more employees, the group plan pays first and Medicare pays second.
- If your employer has fewer than 20 employees, Medicare pays first and the group plan pays second.
Many seniors choose to enroll in Part A even if they have group insurance, because there is no associated premium (for most people). Part B, on the other hand, has a monthly premium. so there are some additional things to consider, including whether your group plan or Medicare pays first, and whether you are happy with your group plan. Read more here about enrolling in Medicare if you have health insurance through your own or your spouse’s employer.
2: You’re 65 or older and you have an employer group health plan through your former employer after you retire. In this case you’re entitled to Medicare, and, if you decide to enroll, Medicare pays first and your retiree coverage pays second.
3: You’re over 65
or disabled and you’re covered by COBRA. In this situation you’re entitled to Medicare, and, if you decide to enroll, Medicare pays first and COBRA pays second.
4: You’re a veteran and have veteran’s benefits. In this situation you’re entitled to Medicare and Veteran’s benefits. Medicare pays for Medicare-covered expenses, while Veterans’ Affairs pays for VA-authorized services.
5: You qualify for Medicare plus Medicaid. If you’re entitled to both Medicare and Medicaid, Medicare pays first, and Medicaid pays, but only after other coverage, such as an employer group plan, has paid.
6: You’re disabled and are covered by a working family member’s group health plan. In this case you are entitled to Medicare. Who pays first depends on the size of your family member’s employer:
- If the employer has 100 or more employees, the large group health plan pays first, and Medicare pays second.
- If the employer has fewer than 100 employees, Medicare pays first, and the group health plan pays second.
7: You’re covered under Worker’s Compensation because of a job-related illness or injury. In this situation you are entitled to Medicare; worker’s compensation is the primary payer for services related to worker’s compensation. A secondary payer doesn’t usually apply in these cases; however, Medicare may make a conditional payment (which must be repaid to Medicare when a settlement, award, or other payment is made).
These are just some of the situations in which there may be more than one payer—people with end-stage renal disease (ESRD), for example, also qualify for Medicare even if they have group health insurance.
If your situation is different from those listed above, the experts at CA Medicare can provide you with more information about coordination of benefits. If you need assistance with Medicare enrollment, we can help—call us today.
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