Does Medicare Pay the Deductible for Primary Insurance?

Medicare is a federal health insurance program primarily serving individuals aged 65 or older, as well as certain younger people with disabilities. Many beneficiaries of Medicare also possess other forms of health coverage, which leads to questions about how these different plans interact. Understanding the interplay between Medicare and other insurance plans, especially concerning deductibles, is important for managing healthcare costs effectively.

Understanding Medicare’s Deductibles

Deductibles represent the amount a beneficiary must pay for covered healthcare services before their insurance plan begins to contribute. Original Medicare consists of two main parts, Part A and Part B, each with its own deductible structure.

Medicare Part A, which covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services, has a deductible that applies per benefit period. For 2025, the Part A deductible is $1,676 for each inpatient hospital benefit period. A benefit period begins the day a person is admitted as an inpatient in a hospital or skilled nursing facility and ends after they have been out of a hospital or skilled nursing facility for 60 consecutive days. This means a beneficiary might pay the Part A deductible more than once in a single year if they have multiple benefit periods.

Medicare Part B covers most doctor services, outpatient care, durable medical equipment, and many preventive services. Unlike Part A, Part B has an annual deductible. In 2025, the Part B annual deductible is $257. Once this deductible is met for the year, Medicare typically pays 80% of the Medicare-approved amount for covered services, and the beneficiary is responsible for the remaining 20% coinsurance.

Coordination of Benefits: When Medicare is Not Primary

When an individual has more than one health insurance plan, rules known as Coordination of Benefits (COB) determine which plan pays first. The plan that pays first is called the “primary payer,” and the plan that pays second is the “secondary payer.” The primary payer processes the claim first, paying up to the limits of its coverage. Any remaining eligible costs may then be covered by the secondary payer, though the secondary payer might not cover all remaining expenses.

Medicare may be the secondary payer in several common situations. If an individual aged 65 or older is currently working and has an employer group health plan (EGHP) through their own or a spouse’s employment, the EGHP is generally primary if the employer has 20 or more employees. Medicare becomes secondary in this scenario. However, if the employer has fewer than 20 employees, Medicare is typically the primary payer, and the EGHP is secondary.

For individuals under 65 with a disability, if they have an EGHP through current employment (or a family member’s employment) and the employer has 100 or more employees, the EGHP is primary. If the employer has fewer than 100 employees, Medicare usually pays first. Retiree coverage from a former employer is generally secondary to Medicare, which acts as the primary payer.

For COBRA, Medicare pays primary if the individual is 65 or older. However, for End-Stage Renal Disease (ESRD) beneficiaries, COBRA pays primary for the first 30 months. For TRICARE beneficiaries, TRICARE pays first if on active duty; otherwise, Medicare generally pays first, and TRICARE may pay second, particularly under TRICARE For Life.

When an individual has both Medicare and Veterans Affairs (VA) benefits, the two programs do not coordinate benefits in the traditional sense; they operate independently. For service-connected conditions, VA benefits typically pay first. For non-service-connected conditions, Medicare may become the primary payer if care is received outside a VA facility. Medicaid always acts as the payer of last resort, meaning Medicare is always primary when an individual has both Medicare and Medicaid coverage. Medicaid can then cover remaining costs, including Medicare deductibles, coinsurance, and copayments, depending on state-specific rules and eligibility for programs like Medicare Savings Programs.

Addressing Primary Insurance Deductibles with Medicare Secondary

When Medicare functions as the secondary payer, it generally does not cover the deductible of the primary insurance plan. The primary insurance processes the claim first, and the beneficiary must satisfy its deductible according to that plan’s specific rules. Only after the primary insurance has processed the claim and its deductible has been met will Medicare, as the secondary payer, consider contributing to the remaining costs.

Medicare will only pay for services that are also covered by Medicare. If the primary insurance covers the full cost of a claim, leaving no deductible unpaid, Medicare may not contribute toward the deductible. However, if the primary insurance denies a claim or pays less than the deductible amount for a Medicare-covered service, Medicare could potentially cover some of the remaining amount, up to what Medicare would have paid as a primary payer.

For example, if a service costs $1,000, and the primary insurance has a $500 deductible, the beneficiary would pay the $500 deductible first. After that, the primary insurance would pay its share of the remaining $500. Then, Medicare would evaluate the remaining balance for any Medicare-covered services, paying based on its approved amount.

Managing Out-of-Pocket Costs with Dual Coverage

Individuals with both Medicare and another primary insurance need to understand how to manage their out-of-pocket expenses, particularly those related to the primary insurance’s deductible. The secondary Medicare coverage generally helps reduce the remaining costs, such as coinsurance or copayments, after the primary plan has paid its portion.

Medicare Supplement (Medigap) plans are designed to help cover out-of-pocket costs associated with Original Medicare, such as deductibles, copayments, and coinsurance. While Medigap plans can significantly reduce a beneficiary’s costs when Medicare is the primary payer, they do not cover the deductible of a separate, non-Medicare primary insurance plan.

Medicare Advantage (Part C) plans are an alternative to Original Medicare, offered by private insurance companies approved by Medicare. These plans have their own cost-sharing structures, including deductibles, copayments, and coinsurance, which may differ from Original Medicare. When an individual has a Medicare Advantage plan and another primary insurance, the Medicare Advantage plan also adheres to Coordination of Benefits rules to determine its payment responsibility. However, the specific out-of-pocket costs, including any deductibles, would be dictated by the Medicare Advantage plan’s terms, not Original Medicare’s.