How to Combine Medicare Plans With Private Insurance and Other Health Plans
Key takeaways:
If you have Medicare and another health insurance plan, Medicare may be the primary payer, the secondary payer, or may not have any cost-sharing responsibility when you receive care.
If Medicare is your primary payer, it will pay first and your other plan may cover remaining expenses. If Medicare is secondary, the other plan pays first and Medicare may cover all, part, or none of the remaining cost.
Even with a primary payer and a secondary payer, you may still have out-of-pocket costs for your healthcare.
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If you have comprehensive health coverage through an employer or union when you become eligible for Medicare, your existing plan may be the primary payer. That means it may cover your healthcare costs before Medicare does. However, depending on your coverage, the other plan may be secondary to Medicare.
Various factors may affect your decision to keep or drop your employer health insurance when you have Medicare. These factors include whether you or your spouse has certain employer coverage and whether you have “creditable drug coverage” — a prescription medication plan that meets Medicare’s minimum standards.
Here’s what you need to know about how Medicare can work with other insurance plans and how to get the most out of a combination of insurance payers.
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Can you use Medicare with employer-sponsored insurance?
You can, but it’s not required. Medicare also can be combined with other types of health plans, including Tricare military health insurance.
Your 7-month, first-time Medicare enrollment period begins 3 months before your 65th birthday, includes your birth month, and ends 3 months later. Most people should enroll in Part A during that initial enrollment period even if you also have employer coverage or another plan, unless you want to continue contributing to a health savings account (HSA).
You can join Medicare Part B after that period ends — without late enrollment penalties — if you have other coverage similar in value to Medicare, such as an employer-sponsored plan, and that plan is the primary payer. However, if you work for an employer with fewer than 20 employees, you must sign up for Medicare Part A and Part B during your initial enrollment period.
Even if you or your spouse is working, Medicare requires that you have creditable drug coverage. If your existing plan does not qualify, you must purchase a Part D plan, or you’ll owe a Part D late enrollment penalty — an premium upcharge that you’ll have to pay every month that you have Medicare Part D.
What is primary and secondary insurance?
If you have more than one health insurance plan, one plan will pay first and the other plan typically pays second — if the care provided is covered. The plan that pays first is known as your primary insurance or primary payer. The other plan is known as your secondary insurance or secondary payer.
Typically, the first plan pays up to the limits of its coverage. The second plan only pays if there are costs the first plan didn’t cover, but it may not pay all of the remaining expenses.
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How does Medicare work with other insurance?
Medicare and your other insurance plan coordinate their benefits to avoid duplicate payments. Whether Medicare is primary or secondary typically depends on the other insurance plan.
Here are examples of when Medicare is the primary or secondary payer.
Your situation and type of insurance in addition to Medicare | How Medicare pays |
You are working at age 65 and older and are covered by your or your spouse’s employer group health plan (GHP) and the employer has fewer than 20 employees. | Primary |
You are working at age 65 and older and are covered by your or your spouse’s GHP and at least one employer has 20 or more employees. | Secondary |
You are self-employed at age 65 and older and are covered by your or your spouse’s GHP and at least one employer has 20 or more employees. | Secondary |
You are disabled and are covered by your or your family member’s GHP and at least one employer has 100 or more employees. | Secondary |
You have end-stage renal disease (ESRD) and are covered by a GHP or COBRA in the first 30 months of Medicare eligibility or entitlement (eligibility through means other than age). | Secondary during the 30-month coordination period for ESRD |
You are 65 and older and covered by Medicare and COBRA. | Primary |
You are disabled and covered by Medicare and COBRA. | Primary |
You are 65 and older with an employer retirement health plan. | Primary |
You are entitled to Medicare and are covered under workers’ compensation because of a job-related illness or injury. | Medicare typically doesn’t pay for injury, illness, or disease covered by workers’ compensation. But it may make a conditional payment when there is evidence that the workers’ compensation or insurer won’t pay promptly. |
Can Medicare be changed from primary payer to secondary payer depending on the care you need?
Typically, no. Your primary and secondary coverage depends on how you get insurance, not on the type of healthcare that you need. That said, you can make Medicare your primary insurer by dropping the other insurance. Or Medicare could be secondary if you qualify for group health insurance.
Once your employer-based health insurance ends because you either stop working or are no longer covered by the plan, you’ll enter a special enrollment period for Part A and/or Part B. This period lasts for 8 months after the group coverage or employment ends — whichever comes first. During this time, you can enroll in Medicare and begin coverage without a late-enrollment penalty. After the 8-month enrollment period ends, you may be subject to late enrollment penalties.
Are there any exceptions that affect whether Medicare can be your primary or secondary coverage?
There are a few special situations to keep in mind:
If you have employer health insurance and Medicare but get services outside of your insurance network, it’s possible that neither Medicare nor your insurance plan will pay for the care.
If you get healthcare services from the Indian Health Service and have a tribal group health plan, Medicare pays first.
If you get veterans health benefits, the location of your treatment determines the primary insurance payer. If you go to a VA location (or get pre-authorization for care elsewhere), your VA benefits will cover the expenses. If you go to a non-VA facility for services that the VA has not authorized, your Medicare coverage will kick in.
Medicare does not pay for treatment covered under the Federal Black Lung Program.
Where can I get help finding out whether Medicare is primary or secondary to my other insurance?
If you’re not sure whether Medicare is your primary or secondary policy, you can check with your employer or private insurer or call Medicare’s Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY: 1-855-797-2627).
You can also get free help with questions and benefits coordination from the State Health Insurance Assistance Program in your state.
How to get the most out of your combination of health insurance plans
To make the most of your health insurance plans, you’ll need to understand their rules, benefits, and costs. Typically, it makes sense to enroll in Medicare Part A (hospital insurance) when you’re first eligible, since most enrollees don’t pay premiums.
As for Medicare Part B (medical insurance): In some cases, you’re better off delaying your enrollment until after your employer coverage has ended and you are eligible for a special enrollment period. That way, you can avoid paying Part B premiums and you aren’t subject to the late-enrollment penalty. However, some employers require workers who are eligible for Medicare to sign up for it and will refuse to pay for any claims until they enroll.
It’s also important to tell your healthcare professionals if you have multiple insurance plans so that they know your care could have primary and secondary payers.
What factors affect how you build your health coverage?
When you have multiple options, there are several factors that will determine the best structure for your health insurance coverage. Those factors include:
Whether you have health insurance other than Medicare
Whether your spouse has health insurance other than Medicare (and whether you’re covered by that plan)
Whether you are satisfied with the health professionals or hospitals in your private plan’s network
Whether you have creditable drug coverage without buying a Part D plan
The out-of-pocket costs of both the primary and secondary insurance
The total out-of-pocket costs for Medicare and the other insurance plan will include:
Part D costs, which depend on your plan’s formulary
Healthcare out-of-pocket costs, including premiums, deductibles, copayments, and coinsurance
The bottom line
Sorting out how Medicare works with other types of insurance can feel overwhelming. But understanding how your health plans work together can help you make the most of what’s available to you.
Generally, if you get health insurance coverage through a large employer, that insurance will be your primary payer and Medicare will be your secondary payer. If your insurance is provided by an employer with fewer than 20 employees or you get retiree healthcare benefits from a former job, Medicare is your primary payer.
It’s also important to make sure you have enough healthcare and prescription coverage to delay Part A, Part B, and Part D enrollment without penalties. These penalties will be permanent premium upcharges when you switch to Medicare coverage.
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References
Centers for Medicare & Medicaid Services. (2021). Medicare & other benefits: Your guide to who pays first.
Centers for Medicare & Medicaid Services. (2023). End-stage renal disease (ESRD).
Centers for Medicare & Medicaid Services. (2023). Medicare secondary payer.
Centers for Medicare & Medicaid Services. (2023). Part B other insurer intake tool.
Lankford, K. (2023). If I’m still working at 65, when do I sign up for Medicare? AARP.
Medicare.gov. (n.d.). Avoid late enrollment penalties.
Medicare.gov. (n.d.). How Medicare works with other insurance.
Medicare.gov. (n.d.). When can I sign up for Medicare?
Medicare.gov. (n.d.). When does Medicare coverage start?
Medicare Interactive. (n.d.). Creditable drug coverage.
Medicare Interactive. (n.d.). Job-based insurance when you turn 65.
