Medicare as Primary Insurance
When you turn 65 or qualify for Medicare due to disability, one of the most important things to know is whether Medicare becomes your primary or secondary insurance. Understanding Medicare as primary insurance helps avoid billing issues and unexpected out-of-pocket costs.
What Does “Primary” Mean
The primary payer is the insurance that pays your medical bills first. The secondary payer may cover costs that the primary insurance doesn’t pay; such as deductibles, coinsurance, or copays.
When Medicare is your primary insurance, your healthcare providers bill Medicare first. Once Medicare pays its share, any remaining balance may be sent to your secondary insurance, such as an employer plan or Medigap policy.
When Medicare Is Primary
Medicare typically pays first in these situations:
- You’re retired and not covered by active employer insurance.
Once you stop working and lose active coverage from an employer, Medicare becomes your primary insurance. - You have a small employer plan (fewer than 20 employees).
If you’re still working or covered under a spouse’s small employer plan, Medicare pays first. - You have retiree coverage.
Retiree insurance or COBRA coverage always pays after Medicare. - You have no other insurance.
If Medicare is your only health coverage, it’s automatically primary. - You’re covered by Medicaid.
Medicaid is always the payer of last resort, so Medicare pays first.
Learn about Medicare and employer coverage
When Medicare Is Secondary
In some cases, Medicare may pay after another insurance plan:
- You or your spouse are actively working for an employer with 20 or more employees, and you’re covered under that employer’s health plan.
- You’re receiving workers’ compensation or have a claim covered under no-fault or liability insurance.
- You’re under age 65 and have employer coverage due to disability, and the employer has 100 or more employees.
In these situations, your employer or other insurance must pay first, and Medicare acts as a secondary payer.
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Why It Matters
Knowing when Medicare is primary ensures your medical claims are processed correctly. If you enroll in Medicare but fail to tell your other insurer, or vice versa, you could face denied claims or late enrollment penalties.
Always confirm your coverage status with both Medicare and your employer’s benefits administrator to avoid costly mistakes.
Medicare’s role; whether it’s primary or secondary, depends on your work status, the size of your employer, and any additional coverage you may have.
If you’re nearing retirement or changing jobs, take time to review how your coverage coordinates. Doing so helps ensure smooth billing and gives you peace of mind knowing your healthcare costs are properly covered.