Well, Medicare IS health insurance. You’ll pay monthly Medicare premiums and present your Medicare card to the doctor to pay for services, just like you would with other health insurance. There are, though, several cases where you can have both private insurance and Medicare at the same time.
The government’s Medicare is comprehensive health insurance – in many cases all you need. You’ll pay monthly Medicare premiums and present your Medicare card to the medical provider as you pay your share for services, just like you would with health insurance from a private insurer. There are, though, several cases where you can end up with both private insurance and Medicare at the same time.
When You Have Employer-Sponsored Private Insurance and Medicare
Whether you get insurance through your employer or that of a spouse or family member, the question you’ll face is whether the plan pays for claims before Medicare does (as the “primary payer”) or after Medicare (as the “secondary payer”). The answer depends on the size of the employer providing the coverage.
Your employer coverage will be primary if
- Your employer has 20 workers or more, and you’re over 65 years old and therefore qualify for Medicare; or: Your employer has 100 workers or more, and you qualify for Medicare due to a disability.
Your employer coverage will be secondary – meaning that Medicare becomes primary and will pay most of your claims first, if
- Your employer has fewer than 20 people and you’re over 65 years old; or:
- Your employer has fewer than 100 people, and you qualify for Medicare due to a disability.
The “primary payer” covers what it owes on your bills first, within its policy limits, with the “secondary payer” covering the rest. But you should know that the secondary payer, even if it is Medicare, may not reimburse you for all of your outstanding costs.
For example, if your employer insurance turns out to be your secondary insurer, you may need to enroll in Medicare Part B before your insurance kicks in. If Medicare is your primary insurance and you don’t sign up for Part B upon turning 65, you may be hit with huge medical bills down the line. Your secondary insurer may not pay your claim, leaving you to pay out-of-pocket for an entire medical procedure. What’s more, you could be subject to a monthly penalty for signing up late for Medicare.
If 120 days go by without an insurance company paying a claim, your doctor may bill Medicare. Medicare may cover a bill on the condition it can recover any portion of the payment that the primary insurer ends up being responsible for.
It’s important to check with your company insurance administrator to make sure that the office is coordinating appropriately with your Medicare coverage. You may be responsible for overpayments or penalties if your primary insurance isn’t synced with your Medicare correctly.
If You Have VA Coverage
Although by law, you don’t have to enroll in Medicare’s doctor services Part B, the VA recommends that you do enroll. By becoming a Medicare member as well as a VA enrollee, you will gain access to a greatly expanded range of emergency care and outpatient doctors.
If You Have COBRA or Retiree Insurance
The point where COBRA, Medicare, private insurance and retirement intersect can be awfully tricky. Employers of 20 people or more must offer a Consolidated Omnibus Budget Reconciliation Act, or COBRA, extension of their health plans to employees facing certain qualifying events, like getting laid off or retirement. Qualifying for Medicare upon turning 65 is sometimes but not always a qualifying event, as well. But you are responsible for the entire COBRA premium, both what you paid and what your employee paid, prior to your retirement, plus a 2% surcharge by the insurance company for its administrative costs.
Depending on what your options are and what you choose to do, the interplay among private insurance, Medicare and COBRA are integral. For example, an employee retires and waives COBRA in favor of a retiree health plan covering him and his family. But you can’t have both that retiree health plan and Medicare at the same time. When he qualifies for Medicare, he loses the retiree plan but must be offered COBRA from the date of his Medicare qualification to at least 18 months forward. Employees should consult with their company benefits administrators for more information.1
Medicare Supplemental Plans
With Medicare, you will still be responsible for around 20% of your medical bills. Therefore, over 13 million people currently buy additional coverage that pays the medical bills that Medicare doesn’t pick up. Seen by percentage, in all, 86% of Medicare enrollees buy supplementary coverage that steps in to cover bills when Medicare doesn’t pay.2 Often, these plans fill potentially costly coverage gaps in your Medicare coverage, like coinsurance:
- Medicare Supplement plans (also known as “Medigap”): These are available in every state. There are 10 different types of plans, each with different levels of coverage to pay for your excess Medicare costs.
- Medicare Advantage plans (also known as “Part C”): These are another option. They replace your Medicare Part A and Part B coverage. Instead of getting Medicare through the government, your contract with a private insurer who must by law match A and B coverage — and may also offer extra benefits. In addition, Advantage plans cap your yearly out-of-pocket expense, while Original Medicare does not. Note, however, that Advantage plans have small doctor networks, sometimes limited only to your local area.
- Medicare Part D: These plans pay for prescription drugs. Part D coverage might be included in Medicare Advantage plans under one premium. By contrast, if you are enrolled in Original Medicare and Medigap, beneficiaries must add Part D and pay for it separately.
There are also three major services that almost always aren’t covered by Original Medicare: hearing aids, dental work, and vision care. If you’re a Medicare beneficiary, you can:
- Pay for these services out of your own pocket;
- Enroll in separate vision, dental, or hearing insurance; or:
- Join a Medicare Advantage plan that may cover all three of these services.
In a few very unusual circumstances, you can switch from Medicare to individual health insurance. However, this isn’t cost-effective for most people.