When Is Medicare Primary or Secondary Health Insurance?
Learn how Medicare works alongside employer health insurance to pay medical costs
Reviewed by: Selah Lee, Licensed Insurance Agent.
Medicare is the primary payer for beneficiaries who do not have other coverage through plans offered by employers, other groups, or unions, except under certain circumstances.
Once you are eligible for Medicare, you can drop your employer or union health insurance if you’d like to and enroll in Medicare Part B. You will need to show proof of creditable coverage for your time without Part B.
Yes, you can have both Medicare and employer health insurance together. When you have Medicare and other health insurance or coverage, you have more than one “payer.” In these instances, “coordination of benefits” rules will decide which payer pays first.
Medicare is the primary payer for Medicare beneficiaries who are on employer plans if there are less than 20 employees. However, if the beneficiary is on an employer plan with 20 or more employees, that plan will serve as the primary payer,
If you have specific questions about your company’s health insurance, contact your benefits administrator, insurer, or plan provider. If you have any questions on which of your health insurance plans is primary, call the Benefits Coordination & Recovery Center (BCRC) at 1-855-798-2627.
The downside of having two insurance plans (group and Medicare) is that you pay two sets of premiums and deductibles. Your secondary insurance will not pay toward your primary health insurance deductible, and it’s likely you will still have to pay out-of-pocket costs.
Yes, you can use Medicare Part A coverage even if you delay enrollment in Part B. However, unless you have other creditable coverage (like employer coverage) you should enroll in Part B, to avoid penalties in the future.
Who is responsible for what with the coordination of benefits?
Coordination of benefits (COB) is relevant for individuals with more than one primary payer. It is used to determine which insurance plan has the primary payment responsibility and the extent to which each plan covers an individual.
The Medicare Secondary Payer (MSP) program exists so that Medicare is not the primary payer of claims when individuals have certain other health insurance coverages. The Benefits Coordination & Recovery Center (BCRC) acts on behalf of Medicare to collect and manage information on other types of insurance or coverage a Medicare beneficiary may have.
What should I consider when deciding whether to stay on my employer’s health plan or switch to Medicare?
Employees working for larger companies can either stay on their group plan and delay Medicare enrollment or drop their employer plan for Medicare. It is helpful to calculate the financial impact of each situation. How often you use your health insurance and medication costs may be determining factors. If you have any questions on what Medicare has to offer, contact one of GoHealth’s licensed insurance agents at 1-855-792-0088.