When Is Medicare Primary Insurance and When is it Secondary? – MedicareGuide.com

Medicare is a valuable insurance option for many beneficiaries. However, some individuals also have additional insurance coverage to minimize out-of-pocket expenses. In these situations, there is a concept called “primary insurance” and “secondary insurance” that determines which policy kicks in first. Primary insurance covers the initial costs, while secondary insurance may provide additional payments before the policyholder incurs any expenses. Yet, it’s important to note that secondary insurance might only cover a portion of deductibles or copays, if at all.

When Does Medicare Take the Wheel?

In the absence of any other insurance, Medicare always serves as your primary insurance. Moreover, in most cases where you have multiple insurance options, Medicare continues to hold the primary position. Let’s explore some common scenarios where Medicare takes the leading role.

Reading: How do i make medicare my primary insurance

If You Have Job-Based Insurance from a Small Company

If you have group insurance from a company with fewer than 20 employees, your group insurance plan becomes the secondary insurer. Therefore, you must enroll in Medicare Part B before your group plan will cover its share of the claim.

If You Have Retiree Insurance from a Previous Employer

Certain retiree insurance plans may not cover medical costs if you’re eligible for Medicare but choose not to enroll. To understand how Medicare interacts with your retirement health benefits, review your plan’s benefit materials.

If You Have Insurance from a Previous Employer’s Health Plan

You can choose to solely rely on Medicare and forego additional coverage through Cobra.

If You Have a Disability

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If you have a disability and are under 65 years old, Medicare will take precedence over your employer’s health plan if it covers less than 100 employees.

If You Have End-Stage Renal Disease (ESRD)

Even if you have a group health plan, Medicare remains the primary insurer if you have been eligible for Medicare for at least 30 months.

If You Have TRICARE

While Medicare typically serves as the primary insurer for inactive duty individuals, TRICARE will cover the bills if you receive services from a military hospital or another federal healthcare provider.

If You Have Medicaid

When you have both Medicare and Medicaid, Medicaid always functions as the secondary insurance.

When Does Medicare Take a Backseat?

Although Medicare is often the primary insurance, there are instances where it becomes secondary. Two common scenarios are as follows:

If You Have Job-Based Insurance from a Large Employer

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This applies whether you receive insurance through your own employer or your spouse’s employer. Employers are required to offer the same health benefits to workers aged 65 and older as they do to all other employees.

If You Receive Workers’ Compensation

Your workers’ compensation insurance will take priority for any services or items related to your workers’ compensation claim. Medicare will serve as the primary insurer for all covered medical expenses not associated with that claim.

When Can You Delay Enrolling in Medicare?

If you have health insurance through your employer or your spouse’s employer, and that employer has more than 20 employees, you may be able to delay enrolling in Medicare without incurring a penalty. In this case, even if you signed up for Medicare at age 65, it would only come into effect after your primary insurance has covered their portion of the claims. To avoid penalties after leaving your job or your spouse’s job, it is essential to enroll in Medicare within eight months.

For companies with fewer than 20 employees, Medicare becomes your primary insurance, and you should sign up during your initial enrollment period. Failure to do so may result in a late enrollment penalty. Additionally, every year you delay enrolling in Medicare Part B, your premiums will increase by 10%, unless you or your spouse have workplace insurance.

What’s the Next Step?

Although having multiple health insurance options is fortunate, it can also become confusing when determining which insurance is primary and which is secondary. However, understanding your primary insurance will make managing your coverage more manageable in the future.

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