For a variety of reasons, the number of people who have both Medicare and private health insurance is growing. This can create confusion when it’s time to pay the bill, often leading to delays and even rejected claims. Unfortunately, there is no single answer to the question, does Medicare pay first. On the bright side, though, it isn’t all that confusing. In this post, we walk you through the Medicare vs. private insurance scenarios to let you know who pays first.
To ensure your providers get paid on time (and don’t come after you for payment), tell them about your secondary insurance. You’ll avoid a lot of confusion.
What Is Coordination of Benefits?
Before we jump in, let’s first define a few terms you’ll see throughout this post.
- Coordination of benefits: These are the rules that determine who pays first when you have more than one payer.
- Payer: When you have multiple insurance types, such as Medicare and group insurance through an employer, each coverage type is called a payer.
- Primary payer: This is the payer who pays its portion of covered services first.
- Secondary payer: After the primary payer pays, the bill is sent to the secondary payer so it can pay its share.
Retirees with Medicare + Group Health Insurance
If you retire but still have group insurance through your former employer or your spouse’s employer, Medicare is the primary payer. This assumes you have both Part A and B (Original Medicare) and that your provider accepts assignment.
Once it pays its share, Medicare sends the remaining bill to your secondary payer. You do not need a Medigap plan in this instance. In fact, adding a third payer into the mix often causes more problems than it solves. However, it does make sense to compare the cost of maintaining your secondary group plan to what you’d pay under a Medigap plan.
Still Working with Medicare + Group Health Insurance
When you or your spouse is still actively employed and carry secondary insurance through a group plan, the question of who pays first requires a bit of math.
- If there are 20+ employees on the health plan, Medicare is the secondary payer
- If there are fewer than 20 employees, Medicare is the primary payer
As above, there is no need for a Medigap plan in this situation, although you may save money compared to the cost of your group plan. One of the licensed agents at Medicare Solutions can help you compare your options.
Under 65 with Medicare + Group Health Insurance
If you qualify for Medicare due to disability instead of age and have group health insurance through an employer, the primary payer determination is similar to the scenario above. The only difference is the number of employees on the plan.
- 100+ employees: Medicare is the secondary payer
- Fewer than 100 employees: Medicare is the primary payer
This is also the case if you qualify for the group plan as the beneficiary of a spouse or other family member.
Have End-Stage Renal Disease
If you have End-Stage Renal Disease (ESRD) and a group health plan, primary payer is determined by how long you’ve been eligible or entitled to Medicare.
- During the first 30 months of your eligibility or entitlement, Medicare is the secondary payer
- After 30 months, Medicare becomes the primary payer
This is also true if you have ESRD plus coverage through COBRA.
There is one exception. If you already had Medicare when you were diagnosed with ESRD (even if for another disability), AND Medicare was already your primary payer, Medicare continues paying first.
Have Medicare + COBRA
Excepting the above scenario for beneficiaries who have ESRD, Medicare is the primary payer if you also have COBRA. However, we highly recommend that you compare the cost of COBRA with the cost of a Medigap plan, as COBRA coverage tends to be extremely high. This is particularly true for beneficiaries over the age of 65.
Have Dual Eligibility for Medicare + Medicaid
For beneficiaries who qualify for both Medicare (the federal program) and Medicaid (the state program), Medicare is the primary payer. With these two programs covering your healthcare costs, you will not need a Medigap plan. However, you may benefit from a Medicare Advantage plan called SNP. These plans often offer additional benefits, such as dental and vision coverage. You can find a plan with Medicare’s Plan Finder tool. Or, just call us toll-free at 855-350-8101 and one our licensed agents can help you.
Medicare + VA Benefits
People who qualify for both Medicare and VA benefits get to use both. However, neither is the primary payer. To use your VA benefits, simply receive care from a VA facility. If you prefer to see a civilian doctor, use Medicare.
If you favor civilian healthcare over VA, you may wish to purchase a Medigap policy. This won’t cover services received via the VA. When you see a civilian provider, Medigap becomes the secondary payer.
Medicare + TRICARE
When you have both Medicare and TRICARE, the question of who pays first depends on whether you’re active-duty or inactive-duty military.
- Active-duty: Medicare pays second
- Inactive-duty: Medicare pays first
If you receive services from a federal provider, such as a military hospital, TRICARE always pays first.
Coordination of Benefits in Other Situations
There are a few other instances where you may wonder who pays first. These include:
- If services are for an injury or illness covered by workers’ compensation, workers’ comp insurance is the only payer
- For injuries covered by no-fault or liability insurance, Medicare is secondary payer
- Have black lung disease covered by the Federal Black Lung Benefits Program, Medicare is the secondary payer
If you have coverage through a group plan, either your employer or insurer should inform Medicare. They should also inform Medicare if your coverage changes or ends. Delays in reporting these changes are common, so you may want to call the Benefits Coordination and Recovery Center yourself: 855-798-2627. Medicare will ask for your name as well as the name and address of your health plan, plus the policy number. You’ll also need to let them know when coverage started or ended.