I find this question to be pressing on many people’s minds. The question I often get goes something like this: “I already have insurance. How does Medicare work with the insurance I currently have?”
Well, the short answer is that it depends on the kind of insurance policy you currently have. If you have your own private insurance (not through your job), you need to find out the “coordination of benefits rules” for your policy. Call 1-800-MEDICARE to find out more about how your private insurance policy works with Medicare.
If you have insurance through your employer, on the other hand, there are general rules, that are great to know before you submit a health care claim (you will still need to call 1-800-MEDICARE to get definite answers about how your insurance policy works with Medicare).
Medicare’s Primary and Secondary Payer Rules
To understand how Medicare works with other insurance, you first have to figure out whether Medicare pays primary or secondary when you submit a claim:
- When Medicare pays primary, Medicare will pay out first on health care claims and your employer insurance or private insurance pays either some or all of the remaining costs. If you have retiree insurance or COBRA insurance, for example, Medicare pays primary and your retiree or COBRA insurance pays secondary.
- When Medicare pays secondary, on the other hand, to your employer or private insurance, your employer insurance pays first and Medicare pays on some or all of the remaining costs.
A Good Rule of Thumb for Those With Health Insurance Through Their Employer
Medicare usually pays primary to your employer insurance if you work at a company with fewer than 20 employees; Medicare usually pays secondary to your employer insurance if you work at a company with more than 20 employees.
Be sure to follow-up with your employer because some employers can designate Medicare as your primary health insurance when you turn 65.
Last Words About Those Who Have Insurance Through Their Employer
The Medicare program allows you to delay Medicare enrollment if you have job-based insurance. However, you may still want to enroll in the program if Medicare will be the primary payer and your job-based insurance will be the secondary payer when you turn 65. Again, you have to call 1-800-MEDICARE to determine this.
If you lose healthcare coverage through your employer, you will have up to eight months after you lose coverage to sign up for Medicare’s Special Enrollment Period (SEP). You do not want to go without health insurance for any significant amount of time. To avoid gaps in your healthcare coverage, you should sign up the month before your health insurance through your employer is scheduled to end.
* IMPORTANT * If you have health insurance through your spouse’s employer, you may also delay Medicare enrollment. However, if your spouse loses their job-based healthcare coverage, you will have up to eight months to sign up for Medicare’s Special Enrollment Period (SEP).