How to Determine Which Insurance Is Primary With Medicare

When an individual has multiple health insurance plans, understanding which plan pays first for healthcare services is important for managing costs and ensuring claims are processed smoothly. This arrangement is known as coordination of benefits. Determining the primary and secondary payer helps beneficiaries avoid unexpected out-of-pocket expenses and delays in receiving care.

Understanding Primary and Secondary Coverage

Coordination of benefits establishes the order in which multiple health insurance plans pay for medical services. The primary payer is the insurance plan that pays its share of the bill first, up to its coverage limits. The secondary payer then covers some or all of the remaining costs, such as deductibles, coinsurance, or copayments, after the primary insurer has paid. This prevents duplicate payments.

Medicare, a federal health insurance program, often plays a role in this coordination. Federal laws, known as Medicare Secondary Payer (MSP) provisions, dictate when Medicare is the secondary payer. If Medicare makes a payment when another plan should have paid first, this is considered a “conditional payment,” and Medicare has the right to recover these funds from the primary payer.

Specific Scenarios for Medicare Coordination

The determination of whether Medicare is primary or secondary depends on various factors, including the type of other insurance coverage, the individual’s employment status, and the size of the employer. Medicare generally acts as the primary payer unless specific conditions trigger Medicare Secondary Payer rules.

Employer Group Health Plans (EGHPs) based on active employment

For individuals with Employer Group Health Plans (EGHPs) based on active employment, the employer’s size is a key factor. If the employer has 20 or more employees, the group health plan is primary, and Medicare is secondary. This rule applies whether the coverage is through the individual’s own current employment or their spouse’s current employment. If the employer has fewer than 20 employees, Medicare is primary, and the group health plan is secondary.

Employer Group Health Plans for Retiree Coverage

For Employer Group Health Plans for Retiree Coverage, Medicare is always the primary payer. The retiree health plan then acts as the secondary insurer, covering costs not paid by Medicare, which might include deductibles or coinsurance. It is necessary for retirees to enroll in Medicare Parts A and B to ensure full coverage and for their retiree plan to pay its share.

COBRA coverage

COBRA coverage also has specific coordination rules with Medicare. If an individual becomes Medicare-eligible while on COBRA, the COBRA coverage ends once Medicare eligibility begins. Medicare then becomes the primary payer, and the individual should enroll in Medicare Part B promptly. In situations where COBRA is chosen after Medicare eligibility, Medicare remains primary, and COBRA would be secondary.

Medigap policies

Medigap policies, also known as Medicare Supplement Insurance, are always secondary to Original Medicare. These private plans help cover out-of-pocket costs such as deductibles, copayments, and coinsurance that Original Medicare does not fully pay.

Medicaid

Medicaid is a joint federal and state program that provides health coverage for low-income individuals. Medicaid is consistently considered the “payer of last resort,” meaning it always pays after Medicare and any other health insurance coverage. Individuals who are eligible for both Medicare and Medicaid are often referred to as “dual eligible.”

Veterans Affairs (VA) benefits

Veterans Affairs (VA) benefits operate separately from Medicare. Medicare does not pay for care received at a VA facility, and VA benefits do not cover services obtained outside of VA facilities. Individuals can use both, but they are for different services or settings, rather than coordinating as primary and secondary for the same service.

TRICARE

For those with TRICARE, the healthcare program for uniformed service members, retirees, and their families, coordination with Medicare depends on the specific TRICARE plan. For individuals with TRICARE For Life, Medicare is the primary payer. TRICARE For Life then covers the remaining costs, similar to a Medigap plan. Other TRICARE plans, such as TRICARE Prime or TRICARE Select, may have different coordination rules, and it is important to understand the specifics of each plan.

Workers’ Compensation and No-Fault/Liability Insurance

Workers’ Compensation and No-Fault/Liability Insurance are always primary to Medicare for services related to an injury or illness covered by these plans. Medicare will only pay for covered services if the primary insurer does not pay promptly (typically within 120 days), and Medicare then has the right to seek reimbursement for these conditional payments.

Marketplace (ACA) plans

It is rare to have both a Marketplace (ACA) plan and Medicare as primary coverage simultaneously. Once an individual becomes eligible for Medicare, they are expected to enroll in Medicare, which then becomes their primary coverage. Marketplace plans are not intended to be primary insurance for individuals eligible for Medicare, and keeping a Marketplace plan after becoming Medicare-eligible can lead to penalties or coverage gaps.

How Claims are Processed with Coordinated Benefits

Once the primary and secondary roles are determined, claims processing follows a structured path. Healthcare providers initially submit the claim to the primary insurance payer. The primary insurer then processes the claim according to its policy terms and pays its share of the covered medical expenses. After the primary insurer has processed the claim, any remaining balance for covered services is sent to the secondary insurer. The secondary insurer reviews the claim and pays its portion, if applicable, based on its own coverage rules and what the primary plan paid.

Both the primary and secondary insurers send an Explanation of Benefits (EOB) to the beneficiary. This document details the services received, the amount charged by the provider, how much the insurer paid, and any remaining balance that the beneficiary may owe. Reviewing these EOBs from both plans is important to understand how the claim was processed and the remaining financial responsibility.

Ensuring Proper Coordination

Individuals with multiple health insurance plans, including Medicare, play an important role in ensuring proper coordination of benefits. Providing accurate and complete insurance information to healthcare providers is a foundational step. This includes informing providers about all existing coverage, whether it is Medicare, a group health plan, or other types of insurance. Providing this information helps providers send bills to the correct payer in the proper order, which can prevent billing delays and issues.

Regularly review the Explanation of Benefits (EOBs) received from both primary and secondary insurers. Comparing these documents helps confirm that claims were processed correctly and that each insurer paid its appropriate share. Any discrepancies or unexpected charges should be investigated promptly.

Should there be concerns or issues with how benefits are coordinated, individuals have avenues for assistance. Contacting the Benefits Coordination & Recovery Center (BCRC) is a first step for resolving questions about which plan should pay first. Additionally, reaching out to the specific insurance companies directly or consulting with the provider’s billing office can help clarify payment responsibilities or rectify errors.