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In addition to Medicare coverage, many seniors carry group insurance through an employer or a spouse’s employer. If you need medical services, which insurance pays first? Basically, different health care plans are called “payers”. You will have a primary payer (the one who pays first) and a secondary payer (the one who pays second). Who pays first and who pays second depends on many things, including, how many employees an employer has, if you are retired or still working, and whether or not you are covered under a spouse’s group plan. Understanding how your health care coverage works is the key to keeping your out-of-pocket expenses low. Here’s how your Medicare coordinates with other insurance coverage. If the Employer Has 20 or More Employees, a Group Health Plan Usually Pays FirstFor companies with over 20 employees, group health coverage typically pays before Medicare. If you are over 65, have Medicare and enrolled in coverage through work, your group plan usually pays first. When employer benefits do no cover the entire cost of medical care, the balance is sent to Medicare. Your out-of-pocket costs will vary based on how much of the remaining balance Medicare pays. If the Employer Has Less Than 20 Employees, Medicare Usually Pays FirstIf you receive your health benefits through an employer with less than 20 employees, Medicare typically pays first. However, there are instances where your group coverage might pay first if your employer joined with other employers to form a multi-employer plan, and at least 1 employer in the group has 20 or more employees, then group coverage pays first. If You Receive Retiree Coverage Through a Former Employer, Medicare Usually Pays FirstGenerally, if you are retired and receiving retiree coverage through a former employer, Medicare pays first and group coverage pays second. However, if you are retired, your spouse is not retired and you are covered under his or her policy with 20 or more employees, group coverage pays first and Medicare pays second. Additional Things to ConsiderReceiving care outside an employer plan’s network can be tricky. In many cases, receiving medical care outside of an employer plan’s network can cause both group coverage and Medicare not to pay. Be careful when considering out-of-network care. Check with your employer plan to ensure they will still pay. If you do not take your employer’s coverage, coverage through a spouse will pay before Medicare. If you choose not to take employer offered health care through your work, Medicare will pay for approved services. However, if you have coverage through a spouse, or if your spouse’s employer has over 20 employees, Medicare will not pay first. If you are receiving COBRA, Medicare typically pays first. Even if you had COBRA benefits before being enrolled in Medicare, Medicare Pays first.If you have Medicare and are 65 or older, and receive COBRA benefits after enrolling in Medicare, Medicare pays first. Even with a secondary payer, you may have out-of-pocket expenses. The primary payer (whether it’s Medicare or group coverage) doesn’t always pay the full balance owed from medical care. Unfortunately, the secondary payer may not cover all of the remaining costs. If you chose to delay Part B, group coverage may not pay until you join Part B. The secondary payer only pays if there are costs the primary insurer doesn’t cover. If you don’t have a primary payer because you chose to delay Part B, group insurance may not pay until you enroll in Part B (to have a primary payer). References: https://www.medicare.gov/supplement-other-insurance/how-medicare-works-with-other-insurance/who-pays-first/which-insurance-pays.html https://www.medicare.gov/supplement-other-insurance/how-medicare-works-with-other-insurance/how-medicare-works-with-other-insurance.html MUC67-2017-BCBS Health insurance covers much of the cost of the various medical expenses you’ll have during your life. Generally speaking, there are two basic types of health insurance: According to a 2020 report from the U.S. Census Bureau, 68 percent of Americans have some form of private health insurance. Only 34.1 percent have public health insurance, including 18.1 percent who are enrolled in Medicare. In certain cases, you can use private health insurance and Medicare together. Keep reading to learn how and when private insurance can work with Medicare. Health insurance helps you pay for many types of medical expenses. According to 2016 research, Medicare is associated with lower spending on healthcare services compared with private insurance. It is possible to have both private insurance and Medicare at the same time. When you have both, a process called “coordination of benefits” determines which insurance provider pays first. This provider is called the primary payer. Once the payment order is determined, coverage works like this:
The provider that’s the primary payer can depend on the type of private insurance that you have, as well as your individual situation. In some cases, Medicare may be the primary payer — in others, it may be the secondary payer. There are several different situations when you may have private insurance and Medicare at the same time. This can happen if you have:
Now that we’ve seen when you may have both Medicare and private insurance, let’s discuss who pays first in each situation. You have private insurance coverage through your employer or a spouse’s employerWhen you’re eligible for Medicare, you can still have private insurance coverage provided by an employer. Generally speaking, you’re eligible for Medicare when you: How Medicare works with your group plan’s coverage depends on your particular situation, such as:
It’s possible that your company may offer you coverage under a group plan after you retire. This is called retiree coverage. In this case, Medicare pays first and your retiree coverage pays second. Some health insurance plans, such as Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans, require you to use in-network providers. If this is the case with your group health plan and it pays first, you may not be covered by Medicare if you choose to use an out-of-network provider. You have COBRAIf you have both Medicare and COBRA, the provider that pays first depends on your specific situation, such as:
You have TRICAREIf you have TRICARE, the provider that pays first depends on whether or not you’re on active duty:
Working with both private insurance and Medicare can be a complicated process. If you have questions or concerns about what’s covered and which provider pays first, there are several sources you can reach out to, including:
There are some situations when you can have both private insurance and Medicare. This can happen if you’re covered under private insurance through your or your spouse’s employer. When you have private insurance and Medicare, one of the two providers will pay for healthcare services first. The second provider may then potentially cover the remaining costs. Who pays first depends on your individual situation and the type of private insurance you have. If you have questions about how Medicare works with private insurance, don’t hesitate to reach out to Medicare, the SSA, or your local SHIP for assistance. The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance. |