- It’s possible to have both Medicare and private insurance.
- You may have both if you’re covered under an employer-provided plan, COBRA, or TRICARE.
- If you have both Medicare and private insurance, there are guidelines about which provider pays first for your healthcare services.
Health insurance covers much of the cost of the various medical expenses you’ll have during your life. Generally speaking, there are two basic types of health insurance:
- Private. These health insurance plans are offered by private companies. Many people get private health insurance through a group plan provided by their employers.
- Public. Public health insurance plans are government funded. One example of a public health insurance program is Medicare. Others include Medicaid and Veteran’s Affairs benefits.
According to a 2020 report from the U.S. Census Bureau, 68 percent of Americans have some form of private health insurance. Only 34.1 percent have public health insurance, including 18.1 percent who are enrolled in Medicare.
In certain cases, you can use private health insurance and Medicare together. Keep reading to learn how and when private insurance can work with Medicare.
Health insurance helps you pay for many types of medical expenses. According to 2016 research, Medicare is associated with lower spending on healthcare services compared with private insurance.
It is possible to have both private insurance and Medicare at the same time.
When you have both, a process called “coordination of benefits” determines which insurance provider pays first. This provider is called the primary payer.
Once the payment order is determined, coverage works like this:
- The primary payer pays for any covered services until the coverage limit has been reached.
- The secondary payer pays for costs that aren’t covered by the primary payer; however, it still may not cover all costs.
The provider that’s the primary payer can depend on the type of private insurance that you have, as well as your individual situation. In some cases, Medicare may be the primary payer — in others, it may be the secondary payer.
Did you know?
Private insurance companies manage some parts of Medicare, including:
- Medicare Part C, also known as Medicare Advantage
- Medicare Part D, which is prescription drug coverage
- Medicare supplement insurance, also called Medigap
While these plans can be considered private insurance, the companies that offer them must be approved by Medicare and agree to follow the rules set by Medicare. Because of this, they’re still considered a part of the Medicare program.
There are several different situations when you may have private insurance and Medicare at the same time. This can happen if you have:
- Coverage through an employer. It’s possible that you’ll still have private insurance through your employer when you’re eligible for Medicare.
- Coverage under your spouse’s private health insurance. You can have Medicare and also be covered on a group plan provided by your spouse’s employer.
- COBRA. COBRA allows you to temporarily keep private insurance coverage after your employment ends. You’ll also keep your coverage if you’re on your spouse’s private insurance and their employment ends.
- TRICARE. TRICARE provides coverage for active and retired members of the military and their dependents. You can have both TRICARE and Medicare if you:
Now that we’ve seen when you may have both Medicare and private insurance, let’s discuss who pays first in each situation.
You have private insurance coverage through your employer or a spouse’s employer
When you’re eligible for Medicare, you can still have private insurance coverage provided by an employer. Generally speaking, you’re eligible for Medicare when you:
How Medicare works with your group plan’s coverage depends on your particular situation, such as:
- If you’re age 65 or older. In companies with 20 or more employees, your group health plan pays first. In companies with fewer than 20 employees, Medicare pays first.
- If you have a disability or ALS. In companies with 100 or more employees, your group health plan pays first. When a company has fewer than 100 employees, Medicare pays first.
- If you have ESRD. Your group health plan pays first during a 30-month coordination period. This is regardless of the number of employees your company has or whether you’re retired.
It’s possible that your company may offer you coverage under a group plan after you retire. This is called retiree coverage. In this case, Medicare pays first and your retiree coverage pays second.
Some health insurance plans, such as Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans, require you to use in-network providers. If this is the case with your group health plan and it pays first, you may not be covered by Medicare if you choose to use an out-of-network provider.
You have COBRA
If you have both Medicare and COBRA, the provider that pays first depends on your specific situation, such as:
- If you’re age 65 or older or have a disability. Medicare pays first.
- You have a disability or ALS. Medicare pays first.
- You have ESRD. COBRA pays first. Medicare may pay second, depending whether there’s overlap between your COBRA coverage and your first 30 months of Medicare eligibility based on having ESRD.
You have TRICARE
If you have TRICARE, the provider that pays first depends on whether or not you’re on active duty:
- If you’re on active duty. TRICARE pays first for any services that are covered by Medicare. TRICARE will also cover Medicare deductibles and coinsurance costs, as well as any services covered by TRICARE but not Medicare.
- If you’re not on active duty. Medicare pays first. TRICARE can pay second if you have TRICARE for Life coverage.
Working with both private insurance and Medicare can be a complicated process. If you have questions or concerns about what’s covered and which provider pays first, there are several sources you can reach out to, including:
- Medicare. You can get in touch with Medicare using its general contact information or by reaching out to its Benefits Coordination and Recovery Center directly at 800-MEDICARE (800-633-4227; TTY: 877-486-2048).
- Social Security Administration (SSA). Contacting the SSA at 800-772-1213 can help you get more information on Medicare eligibility and enrollment.
- State Health Insurance Assistance Program (SHIP). Each state has its own SHIP that can aid you with any specific questions you may have about Medicare.
- United States Department of Labor. If your employment has ended, you can contact the Department of Labor to learn more about COBRA coverage at 866-487-2365.
- TRICARE. Contacting TRICARE directly at 866-773-0404 may be beneficial when navigating coverage alongside Medicare.
There are some situations when you can have both private insurance and Medicare. This can happen if you’re covered under private insurance through your or your spouse’s employer.
When you have private insurance and Medicare, one of the two providers will pay for healthcare services first. The second provider may then potentially cover the remaining costs.
Who pays first depends on your individual situation and the type of private insurance you have.
If you have questions about how Medicare works with private insurance, don’t hesitate to reach out to Medicare, the SSA, or your local SHIP for assistance.