Knowing what it means for Medicare to be the secondary payer for health coverage can help you understand how your health care is paid for and what you can expect from the way Medicare coordinates with other insurance providers.
Understanding What Primary and Secondary Payer Means
In the simplest of terms, a primary payer will cover the cost of a health care bill according to its policy rules and up to the limit established therein.
A secondary payer assumes coverage of whatever amount remains after the primary payer has satisfied its portion of the benefit, up to any limit established by the policies of the secondary payer coverage terms.
When Medicare coordinates benefits with other health insurance coverage providers, there are a variety of factors that play into whether Medicare is the primary, secondary or, in very rare cases, a tertiary payer.
Common Circumstances Where Medicare is the Secondary Payer
Generally, a Medicare recipient’s health care providers and health insurance carriers work together to coordinate benefits and coverage rules with Medicare. However, it’s important to understand when Medicare acts as the secondary payer if there are choices made on your part that can change how this coordination happens. This will reduce the risk of you winding up with any unexpected out-of-pocket charges.
Medicare is the secondary payer if the recipient is:
- Over the age of 65 and covered by an employment-related group health plan as a current employee or the spouse of a current employee in an organization with more than 20 employees.
- Over the age of 65 and covered by an employment-related group health plan as a current employee or the spouse of a current employee in an organization that shares a plan with other employers with more than 20 employees between them.
- Disabled and covered by an employment-related group health plan as a current employee or the spouse of a current employee in an organization with more than 100 employees.
- Disabled and covered by an employment-related group health plan as a current employee or the spouse of a current employee in an organization that shares a plan with other employers with more than 100 employees between them.
- Diagnosed with End-Stage Renal Disease (ESRD) and covered by a group health plan or COBRA plan; Medicare becomes the primary payer after a 30-day coordination period.
- Receiving coverage through a No-Fault or Liability Insurance plan for care related to the accident or circumstances involving that coverage claim.
- Receiving Workers’ Compensation Insurance; Workers’ Compensation Insurance is the primary payer for any health care received for the job-related injury or illness.
In any situation where a primary payer does not pay the portion of the claim associated with that coverage, Medicare may make a conditional payment to cover the portion of a claim owed by the primary payer. Medicare recipients may be responsible for making sure their primary payer reimburses Medicare for that payment.
Medicare recipients are also responsible for responding to any claims communications from Medicare in order to ensure their coordination of benefits proceeds seamlessly. Recipients who lose coverage with their primary payer while claims are processing may face paying for the primary payer’s portion of that care out of their own pocket.