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When is Medicare Primary or Secondary Insurance?

Senior business woman reading an article about medicare being primary insurance.

Original Medicare, the basic health insurance program operated by the Government for people aged 65 and up, is very good coverage that reduces your out-of-pocket costs for health care. For millions of people, Medicare is their only health insurance. However, some people also have access to other kinds of health insurance in addition to Medicare. When this is the case, there can be some confusion about how the different insurances work together. If you’ve asked, When is Medicare primary insurance, read this short guide to learn all you need to know about how Medicare works with other kinds of health insurance.

How Does Medicare Work With Other Coverages?

It is fairly common for people to have more than one health insurance coverage. Because of this fact, insurance companies have specific rules and guidelines for how to separate policies will work together. The working together of more than one insurance policy is known as “coordination.” All health insurance policies have rules in place detailing how their policy will coordinate with other health insurance.

When benefits are coordinated, one of the coverages is designated as the “primary” and the other is designated as the “secondary.”  This concept of primary versus secondary can also occur with other types of insurance, such as when you’re injured in an accident and the responsible party has insurance that will pay claims on your behalf, in addition to whatever coverage you have. 

The purpose of coordination of benefits is to ensure that no claim is double-paid, or exceeds the total amount of claim. For example, if you go to the doctor for a routine checkup and the total billable amount is $150, your two insurance policies will coordinate to ensure that the total claim is paid, but that the provider doesn’t receive more than they billed for. As a hypothetical example, your primary coverage might pay $90, and your secondary policy would pay the remaining$60. Some common claims that you’ll encounter where coordination of benefits occurs include:

  • Doctors’ visits
  • Lab work or other diagnostic testing like X-rays and MRIs
  • Surgeries
  • Inpatient hospital stays
  • Mental health care

In all cases, your primary and secondary coverage will coordinate to pay the claim. It’s also possible that you’ll still have some cost-sharing responsibilities like a co-payment.

What Kinds Of Coverage Does Medicare Coordinate With?

Now that we’ve covered what coordination is, let’s talk about what kinds of coverage Medicare will coordinate with. Then we’ll discuss when Medicare is the primary coverage.

There are several kinds of insurance that Medicare will coordinate with, including:

  • Medicaid
  • Employer or Union group health insurance
  • Tricare
  • Liability insurance (like when you’re injured in an accident)
  • Medicare Supplement Insurance (Medigap)

There are several other situations where Medicare will coordinate benefits with other coverage, like for certain Federal insurance programs. However, these programs aren’t open to most people and the chance of coordination is rare; we’ll focus on the most common coordination cases.

Elderly lady with her care giver as they discuss medicare being primary insurance.
We listed Medicare Supplement Insurance because this is a very common coverage that goes with Medicare.

When Is Medicare Primary Insurance Coverage?

Now that we’ve covered the basics of coordination between insurance policies, we’ll review when Medicare is the primary coverage. In this case, Medicare will pay first, and your secondary coverage will kick in at that point.

Medicare is generally the primary coverage when coordinating with:

  • Employer group coverage when the employer has FEWER than 20 employees
  • For INACTIVE military with Tricare coverage
  • Medicare Supplement Insurance
  • Medicaid

In these situations, Medicare will pay claims first, up to the amounts specified by the Medicare program. The nice thing about coordination of benefits is that you shouldn’t have to submit claims to both insurance companies. The insurance companies (including Medicare) figure out how much they’re required to cover and make the claims payments automatically.

We listed Medicare Supplement Insurance because this is a very common coverage that goes with Medicare. This is not a true coordination of benefits situation like the others listed. However, in your experience it will seem like it. When you receive covered services under Medicare Part A and B, Medicare will be the primary insurance, paying their part of the claim. Your Medicare Supplement policy will then pay whatever amounts you would normally be responsible for under Medicare, up to the plan limits. For instance, you’d normally have to pay 20% of the cost for Part B services like outpatient surgery. However, most Medigap plans will cover these amounts, in which case you might not have any out of pocket cost for the surgery.

When Is Medicare Secondary Insurance?

We’ve reviewed some common situations where Medicare is primary. There are also many situations where Medicare is secondary. They’re more rare, but it’s useful to understand when this will be the case. Medicare is usually the secondary payer when:

  • You’re covered by an employer or union plan with MORE than 20 employees
  • You are ACTIVE military with Tricare benefits
  • You are receiving coverage of claims from a liability situation, like when you’re injured in an accident

In these cases, Medicare will only pay after the primary coverage has paid its share. To avoid having to pay more out of pocket than you should, make sure to provide all of your coverage documents, like insurance cards, when you receive services. The rules relating to liability insurance coordination can be very complex; in some cases Medicare may make conditional payments to your health care providers. Ultimately, though, they will coordinate as secondary with any settlements paid to you.

Medicare Advantage Coverage – A Special Case

Generally, Medicare doesn’t coordinate benefits with Medicare Advantage plans. This is why you give your providers only your Medicare Advantage card, and NOT your Original Medicare Card. Your Medicare Advantage plan is responsible for paying all of your Medicare-approved heath care claims. However, your Medicare Advantage plan will also coordinate benefits with other insurance coverages, just like Original Medicare. Plus, there is one area where Original Medicare DOES pay claims, even when you have Medicare Advantage coverage – hospice benefits.

Hospice is covered under Part A of Original Medicare, even if you have Medicare Advantage. Most other health care expenses you incur in a hospice situation will still be covered by your Medicare Advantage plan, so you’ll experience something like coordination of benefits in a hospice situation.

Having health insurance beyond Original Medicare can help lower your out-of-pocket expenses. But, as you can see, coordination of benefits can be a complicated issue. If you’re going to have other health insurance options beyond Original Medicare, you may want to consider working with an insurance professional to find out how your coverages will work together. A licensed health insurance agent can help you determine what kinds of coverage you need, if any, beyond Original Medicare. If you need help understanding when is Medicare primary, reach out to us today for a free, no-obligation consultation.

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