If Medicare is your sole insurance, it is always primary. Coordination of benefits determines primary and secondary coverage when additional insurance is involved. Seniors benefit from Medicare, regardless of its role, but which insurance pays first depends on primary coverage. Primary insurance pays first, followed by secondary insurance. The following sections explain when Medicare is primary or secondary and situations without benefit coordination.
Is Medicare considered primary or secondary to group insurance?
When you have group insurance, Medicare generally acts as the primary coverage. However, there are cases where Medicare can serve as supplemental insurance. Here are some examples:
Is Medicare Primary or Secondary?
Group Coverage Through Larger Employer
Many Medicare beneficiaries have group insurance through their own or their spouse’s employer. When the employer has more than 20 employees, Medicare becomes secondary coverage in this scenario.
Seniors who choose to delay enrolling in Medicare Part B due to the lower cost of their group coverage should be aware that, in many cases, Medicare offers better coverage and affordability when it serves as their primary insurance.
Under 65 and Disabled with Larger Employer Group Coverage
If you have group employment coverage through an employer with more than 100 employees, are under 65, and qualify for Medicare due to a disability, Medicare acts as the secondary payer.
Medicare as Secondary Insurance in Non-Employer Group Coverage
While Medicare is not commonly used as secondary insurance for seniors without employer-sponsored group coverage, there are situations where this coordination of benefits applies. Here are some common examples:
TRICARE
TRICARE takes precedence for Medicare-approved services received in civilian facilities, with Medicare acting as the secondary payer. However, if you are an active duty military member, Medicare becomes the secondary payer, and treatment at a military or federal healthcare facility is not covered under Medicare.
Workers’ Compensation
If you suffer a work-related injury or illness, Medicare pays after your workers’ compensation policy. However, Medicare will cover any medical care unrelated to the workers’ compensation claim as the primary payer.
Federal Black Lung Program
If you are covered under the Federal Black Lung Program, Medicare serves as the secondary payer and does not provide primary coverage.
When is Medicare Considered Primary?
In most cases, Medicare serves as the primary insurance for individuals with multiple types of coverage. Medicare pays first when coordinating with group insurance from a smaller employer, COBRA coverage, being on inactive duty with TRICARE, or Medicaid. Typically, secondary insurance does not pay until the primary insurance has completed its payment.
Medicare as Primary or Secondary Insurance with Small Employers
If your employer has fewer than 20 employees, Medicare will be your primary insurance, while your employer coverage will be secondary. It is important to note that Medicare Part B does not credit employment coverage, so delaying enrollment may result in late registration fees, even if your spouse is covered under the group plan. It is advisable to compare the costs and benefits of your current employer-provided insurance with Medicare to determine potential cost savings.
Medicare as Primary, COBRA as Secondary
In certain situations, you may have both Medicare and COBRA concurrently. In most cases, Medicare takes precedence over COBRA. However, if your group insurance plan has specific guidelines establishing the primary payer, there may be an exception.
It is uncommon for individuals eligible for Medicare to find COBRA preferable due to its higher cost compared to Medicare. After enrolling in Medicare, you can discontinue your COBRA coverage.
It is important to note that COBRA is not considered credible coverage. Choosing not to enroll in Medicare when eligible can result in late enrollment fees due to COBRA’s inferior standing. Even if you have COBRA coverage for more than eight months, you must enroll in Medicare within the first eight months.
Retiree Coverage
If you receive retiree coverage from your former employer, Medicare takes precedence over your retiree insurance. Retiree coverage often includes prescription drug benefits, which may eliminate the need for enrolling in Medicare Part D prescription drug coverage.
Under 65 and Disabled with Employer Group Coverage
If you have group employment coverage through a small or medium-sized company with fewer than 100 employees and are under 65, qualifying for Medicare due to a disability, your employer’s insurance will be secondary, and Medicare will serve as the primary payer.
TRICARE for Life
Once eligible for Medicare, military retirees and their spouses are automatically eligible for TRICARE for Life (TFL). Medicare becomes the primary payer for any non-military facility care. Therefore, it is important for veterans to enroll in Medicare Parts A and B as soon as they are eligible.
TFL provides decent drug coverage, eliminating the need to enroll in Medicare Part D. Some veterans with TRICARE for Life choose to enhance their benefits by enrolling in a Medicare Advantage plan, which may include additional advantages like vision and dental insurance. TRICARE for Life also helps cover out-of-pocket expenses associated with Medicare Advantage plans.
End-Stage Renal Disease (ESRD)
During the first 30 months after an ESRD diagnosis, seniors retain their existing employer’s coverage as their primary insurance. After this initial period, their primary coverage transitions to Medicare, similar to COBRA or retiree insurance.
If a successful kidney transplant is received while on Medicare due to ESRD, eligibility for the program expires after 36 months. However, if eligibility for Medicare is based on age or disability, it continues even after a kidney transplant.
FAQS
1.Is Veterans Affairs (VA) Benefits Primary or Secondary to Medicare?
Both Veterans Affairs (VA) benefits and Medicare act as primary insurance and do not complement each other. When seeking care at a veterans’ facility, your VA benefits serve as the main and exclusive form of insurance. However, when receiving care at a civilian facility, Medicare becomes your sole source of coverage.
2.Is a Medicare Supplement Plan Primary or Secondary?
Medicare Supplemental Insurance is a secondary payer. The healthcare facility will submit Medicare claims first. They will then charge your Supplement plan.
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