You have turned 65 and have become eligible for Medicare health insurance. However, you have other health insurance coverage. What do you do? This question is common among people who turn 65.
Perhaps you are still working, so your employer is offering health insurance, or you have retired, and your former employer is still offering coverage. Or maybe your spouse still has an insurance plan that covers you.
In this blog post, you will learn about what happens when you already have health insurance coverage and qualify for Medicare coverage. But first, if you have any questions about enrolling in Medicare, contact The Medicare Family for some help. Let’s dive in.
How Does Medicare Health Insurance Work With Other Insurance
In case you have at least two different health insurance coverages, it’s essential to know which one of them will be the primary payer. And which will act as backup for the expenses that the first coverage doesn’t provide for. Knowing how Medicare coverage works with other health insurance plans will help you know when to take your Medicare card and when to bring the other insurance card.
Which Health Insurance Is Primary Or Secondary Insurer?
If you have more than one insurer (health insurance coverage), some rules determine which coverage pays first. That insurer is the primary, and the other one is the secondary.
Every time you have a health need, the primary insurer offers coverage to the limits of its benefits. Only then will the secondary insurer begin covering charges which are not covered by the primary insurer.
But this doesn’t mean that the secondary insurer will pay all the remaining costs. For instance, you might have out-of-pocket costs like a copayment or coinsurance that may be part of what the secondary insurance covers.
Medicare plans work with employer coverage in various ways, depending on the company’s size. If you are eligible for Medicare health insurance and are 65 and over, Medicare is the primary insurer if your company has less than 20 employees. This means that they will also have to have Medicare Part A and Part B. This is known as a small group health plan.
Medicare is usually the secondary insurer if the coverage is from your current employer and the company has more than 20 employees. Employer coverage is primary, so they won’t have to sign up for Medicare. This is known as a group health plan (GHP).
These are examples of how Medicare works with other insurance plans and who pays first. Note that if they keep working and haven’t already taken Medicare, they will get a “golden ticket” to pick any Medicare Supplement they want, just like they would have at age 65 with no penalties.
Existing Employer Group Health Plan
If you have coverage through your employer or your spouse’s employer, and the company has more than 20 employees, the health insurance plan pays first, and Medicare pays second. But if the employer has less than 20 workers, the Medicare plan pays first, and the employer coverage pays second.
Individuals’ Health Insurance Plan
Medicare is the primary insurer if you have an individual health plan from an insurance company. However, there is no reason to continue paying for individual insurance plans once you are eligible for Medicare.
You can enroll for Medicare even when you have retired and have health insurance coverage from your former employer. In this case, Medicare usually pays first, and the group health coverage pays second. If you are a retired federal worker, Medicare pays first, and the Federal Employees and Health Benefits Program pays second.
Usually, Medicare will pay first if you have active TRICARE. TRICARE is the second insurer and might pay Medicare coinsurance and deductibles and some services not covered by Medicare.
But if you have retired from the military, you must enroll in Medicare Part B to maintain your TRICARE coverage. Failure to do so will make you lose TRICARE coverage.
The Military Retiree And VA Benefits
Veterans benefits are not an insurance plan. Therefore, if you want insurance coverage for services outside the VA system, make sure you get Medicare. If you have Veterans’ benefits and Medicare, you qualify to get treatment under either program.
Both programs can’t pay for the same items or services. VA will pay for its authorized services, while Medicare will pay for the services it covers.
COBRA Continuation Coverage
Medicare is the first insurer if you already have Medicare because you are 65 and over or under 65 with a disability. But if you have Medicare because of End Stage Renal Disease, COBRA is the first insurer and Medicare will be the second. However, this applies during the coordination period for up to 30 months after you qualify for Medicare. Once the coordination period is over, Medicare pays first.
Do You Have To Enroll In Medicare If You Have Employer Coverage?
It depends. If you are on a small group health plan (less than 20 employees), then yes you will have to enroll in Medicare in order for your employer insurance coverage to act as a secondary insurer.
If you have a large employer (20+ employees), it is not common to stay on your group health plan AND take Medicare.
Should You Stay on Your Employer Coverage or Enroll in Medicare
We do a cost-benefit analysis with our clients to see if it makes sense to stay on a group health plan or to leave that coverage and go with Original Medicare plus a Medicare Advantage or Medicare Supplement plan. Reach out to us so we can help guide you through what is best for your unique situation.