How Does Medicare Work with Other Insurance?
Some people with Medicare coverage, also referred to as Part A and Part B, are also eligible for other types of insurance. Although you can have multiple insurance types, how they work together differs depending on the type of existing insurance you have as well as your beneficiary status.
When you have Part A and Part B and another form of insurance, Medicare will “coordinate benefits” according to its specific rules. We’ve broken down the types of other insurance and the coordination guidelines for you below.
How Do the Major Types of Insurance Work Together?
These are the four major types of Medicare insurance:
- Original (Part A and Part B)
- Supplement (“Medigap”)
- Part C (Advantage)
- Part D (Prescription Drug Plan)
Part A and Part B is insurance provided by the federal government. This type of insurance helps pay for certain health care expenses, including hospital stays, doctor visits, and preventive care. But it doesn’t cover everything, so you may have to pay for certain costs out of pocket, like deductibles, copayments, and coinsurance.
If you have both parts, you can purchase a Supplement plan from a private insurance company to help pay for some of the costs left over from Part A and Part B. Original will pay first and cover up to Medicare’s coverage limits for the type of service. Your Medigap plan will then pick up some of remaining cost.
An Advantage Plan is offered by private insurance companies and combines coverage for Part A and Part B into a single plan, often with more benefits. You cannot have both Part A and Part B and an Advantage plan, but you can switch between the two types of coverage during certain enrollment periods.
Part D policies help pay for prescription drugs. If you have Part A and Part B, you can buy a standalone Part D prescription drug plan (PDP). You’ll use the PDP plan to pay for medications and Part A and B for hospital, outpatient, and other services. You can also purchase an Advantage plan with prescription drugs (MA-PD).
How Does It Coordinate with Other Insurance Types?
Some eligible beneficiaries or their spouses may still be working for companies that offer employer-based health insurance. If you’re in this situation, you may be able to enroll in Part A and B and keep your employer-provided health insurance. Always speak with your employer or union administrator before enrolling in a plan to find out how the plan may affect your current coverage. Medicare will coordinate the benefits according to certain rules:
- If the employer has 20 or more employees, it usually pays second (after the employer plan).
- If the employer has fewer than 20 employees, it usually pays first.
Read our guide on five things to consider when deciding between keeping your employer coverage or getting Medicare.
If you have health insurance provided to retirees (and spouses) of a former company, it usually pays first.
Individuals who are eligible for both Part A and B and Medicaid (sometimes referred to as “Dual Eligibles”) can keep both types of coverage. Medicare will always pay first for covered services, and Medicaid pays after employer-based plans and Medigap coverage.
COBRA plans (a result of the Consolidated Omnibus Budget Reconciliation Act of 1985) are offered to some employees who lose their employer-based coverage. Medicare usually pays first before COBRA plans. The exception is for patients with end-stage renal disease. In this case, it pays second.
This insurance is offered by the United States government to military members and their families. Medicare will pay first for most services unless they are provided by a military or federal facility. Tricare will pay the Part A and B deductible and coinsurance amounts for covered services.
For veterans who have both Part A and B and VA benefits, the beneficiary must choose which type of insurance to use to pay for services. Medicare will not coordinate with VA benefits.
Do You Have More Questions?
Learn more about the types of Medicare insurance and how they work together by visiting our guide to your plan options.