Can Medicare Be a Secondary Insurance? Unveiling the Coverage Conundrum

Yes, Medicare can absolutely be a secondary insurance. Understanding when and how Medicare acts as secondary payer is crucial to navigating the complex world of healthcare coverage. Many individuals find themselves in situations where they have access to more than one health insurance plan, and knowing the order in which these plans pay out is essential to minimizing out-of-pocket costs and avoiding claim denials.

Understanding Primary vs. Secondary Insurance

Before diving into the specifics of Medicare, let’s clarify the roles of primary and secondary insurance. The primary insurance pays your healthcare bills first. This is typically the plan you obtain through your employer, union, or spouse. The secondary insurance then picks up some or all of the remaining costs, depending on the specifics of both policies.

Think of it like a relay race: the primary insurance runs the first leg, and the secondary insurance takes over to finish the race. The goal is for you, the patient, to have as much of your medical expenses covered as possible.

When Does Medicare Act as Secondary Payer?

Medicare typically acts as secondary payer in a few key situations:

• You have group health plan coverage through your current employer: If you are actively employed and covered by a group health plan (meaning the employer has 20 or more employees), that plan usually pays first, and Medicare pays second. This is a significant point to remember, as many people continue working past the age of 65.
• You have coverage through your spouse’s employer: Similar to the scenario above, if your spouse’s employer has 20 or more employees and you are covered under their group health plan, that plan pays first, and Medicare pays second.
• You have coverage under the Federal Employees Health Benefits (FEHB) program: If you are a federal employee or retiree enrolled in FEHB, your FEHB plan generally pays primary, and Medicare pays secondary.
• You have coverage under the Department of Veterans Affairs (VA): Although the VA provides healthcare services, it is not considered primary insurance in the same way as a group health plan. If you receive care from a non-VA provider, Medicare will generally pay first. However, if you receive care at a VA facility, the VA will pay for the care, not Medicare.
• You have Workers’ Compensation or liability insurance: If your medical expenses are related to a work-related injury or illness (Workers’ Compensation) or an accident where someone else is liable (liability insurance), those insurances pay first, and Medicare pays secondary.
• You have coverage under the Black Lung program: If you are eligible for Black Lung benefits, that program pays first for conditions related to black lung, and Medicare pays secondary.

How Medicare Secondary Payer Works in Practice

The process generally works like this:

1. You receive medical care. You present both your Medicare card and your other insurance card(s) to the healthcare provider.
2. The provider bills your primary insurance. The provider submits a claim to your primary insurance company, which processes the claim and pays its share.
3. The provider bills Medicare. After the primary insurance has paid, the provider automatically sends the claim to Medicare for secondary payment. You don’t usually need to file the claim yourself.
4. Medicare processes the claim. Medicare reviews the claim and determines how much it will pay, based on its coverage rules and the amount already paid by your primary insurance.
5. You may have out-of-pocket costs. Depending on the specifics of both your primary and secondary insurance plans, you may still have some out-of-pocket costs, such as deductibles, co-pays, or coinsurance. However, having Medicare as secondary coverage can significantly reduce these costs.

Situations Where Medicare is Primary

It’s important to also understand situations where Medicare is primary:

• Employer has less than 20 employees: If your employer (or your spouse’s employer) has fewer than 20 employees, Medicare generally pays first, and the employer-sponsored plan pays second.
• You are retired and have retiree coverage: If you are retired and have health coverage from your former employer, Medicare typically pays first.
• You are not actively employed: If you are not currently employed, Medicare will almost always be your primary insurance.

Important Considerations

• Coordination of Benefits: Medicare has rules for coordinating benefits with other insurance plans. Understanding these rules is crucial to ensuring your claims are processed correctly and you receive the maximum coverage possible.
• Medicare Advantage Plans: If you are enrolled in a Medicare Advantage plan (Part C), the rules for secondary payer may differ. It’s essential to check with your specific Medicare Advantage plan provider to understand how it coordinates benefits with other insurance.
• Medicare Supplement (Medigap) plans: Medigap plans are designed to supplement Original Medicare (Parts A and B) and help cover out-of-pocket costs. They don’t typically act as secondary payers in the same way as a group health plan. They usually pay after Medicare pays its share.
• Keep Your Information Updated: It’s essential to keep Medicare updated about any changes to your other insurance coverage. This helps ensure your claims are processed correctly and avoids any potential delays or errors.
• Consult with a Healthcare Professional or Insurance Expert: If you have questions about how Medicare works with your other insurance coverage, don’t hesitate to consult with a healthcare professional, a benefits administrator, or an insurance expert. They can provide personalized guidance based on your specific situation.

Frequently Asked Questions (FAQs)

1. What happens if I don’t tell Medicare about my other insurance?

Failing to inform Medicare about other insurance coverage can lead to claims processing errors, delays, or even denials. It’s vital to report any other health insurance you have to ensure proper coordination of benefits and accurate payment of claims. Medicare may also retroactively deny claims if they later discover you had primary coverage you didn’t disclose.

2. How do I report my other insurance to Medicare?

You can report other insurance coverage to Medicare by calling the Medicare Benefits Coordination & Recovery Center (BCRC). You can also report it through your online Medicare account or by completing a questionnaire that Medicare may send you periodically.

3. Does Medicare always pay 80% when it’s secondary?

No. Medicare doesn’t automatically pay 80% when it acts as a secondary payer. Medicare calculates its payment based on what the primary insurance paid, the services covered by Medicare, and any applicable deductibles or coinsurance. The amount Medicare pays will vary depending on the specific circumstances.

4. What if my primary insurance denies the claim?

If your primary insurance denies a claim, Medicare might still pay, but it depends on the reason for the denial. If the denial is because the service is not covered under your primary insurance plan, Medicare may cover the service if it’s a covered benefit under Medicare. However, you will need to submit the denial letter from the primary insurer to Medicare.

5. Can I drop my employer-sponsored insurance and rely solely on Medicare?

Yes, you can generally drop your employer-sponsored insurance and rely solely on Medicare once you are eligible. However, this decision depends on your individual circumstances. Consider factors like the cost of your employer-sponsored insurance, the benefits it provides, and your healthcare needs before making a decision. You also need to consider potential penalties for delaying enrollment in certain parts of Medicare.

6. What is a Medicare Secondary Payer (MSP) claim?

An MSP claim refers to a situation where Medicare is not the primary payer because the beneficiary has other insurance coverage that takes precedence. These claims require specific handling and coordination of benefits to ensure proper payment.

7. Does TRICARE affect Medicare’s role as a secondary payer?

If you have TRICARE (healthcare for military personnel and their families) and Medicare, TRICARE generally pays first for services received at a military treatment facility. However, if you receive care from a civilian provider, Medicare typically pays first, and TRICARE pays secondary, provided the civilian provider is also a TRICARE-authorized provider. It is important to note TRICARE for Life (TFL) acts as a supplement to Medicare, paying some of the costs that Medicare doesn’t cover.

8. What if my secondary insurance is a Medigap plan?

Medigap plans, also known as Medicare Supplement plans, are designed to supplement Original Medicare (Parts A and B). They don’t act as primary or secondary payers in the same way as other insurance plans. Instead, they help cover out-of-pocket costs, like deductibles, co-pays, and coinsurance, after Medicare has paid its share. Medigap does not work with Medicare Advantage plans.

9. How does Medicare coordination of benefits work with liability insurance?

If you’re injured in an accident and file a liability claim against the responsible party, Medicare may make conditional payments for your medical care. If you later receive a settlement from the liability insurer, you must reimburse Medicare for the conditional payments they made.

10. Will Medicare pay for everything my primary insurance doesn’t cover?

Medicare will only pay for services that are covered under Medicare and are deemed medically necessary. If your primary insurance doesn’t cover a particular service, Medicare might cover it, but it depends on Medicare’s coverage rules and whether you’ve met your deductible.

11. If I have Medicare and private insurance, which card do I show at the doctor’s office?

Present both your Medicare card and your private insurance card at the doctor’s office. This allows the provider to bill the correct insurance company first and then submit the claim to Medicare for secondary payment.

12. Is there a penalty if I delay enrolling in Medicare Part B because I have employer-sponsored insurance?

If you have creditable coverage through an employer with 20 or more employees, you may be able to delay enrolling in Medicare Part B without penalty. Creditable coverage means that the employer-sponsored insurance pays at least as much as Medicare would. You have an eight-month Special Enrollment Period to enroll in Part B starting either when your employment ends or when the group health coverage ends, whichever comes first. If you don’t enroll within this period, you may have to pay a late enrollment penalty for as long as you have Medicare. It is always best to confirm with Social Security that you are eligible for a Special Enrollment Period.