Are you soon turning 65? If you’re like most people, you’re probably looking forward to enrolling in Medicare. But maybe you still want to keep your private insurance. Can you have both Medicare and private insurance at the same time? The good news is that you can and won’t lose your Medicare coverage. With an increase in the number of Americans continuing to work past age 65, more and more seniors have both types of insurance. Here’s what you need to know about private insurance and Medicare, along with a few considerations and warnings.
Medicare vs. Private Health Insurance
Medicare is a government-run program helping older Americans who are unable to pay for their own medical expenses. It’s also for those suffering from disabilities that prevent them from working. On the other hand, Medicare doesn’t pay for several kinds of tests and procedures that some private insurance providers cover. That’s why some people have both types of insurance.
Private health insurance is a health insurance plan that’s sold by the private health insurance industry. In other words, it’s not insurance that’s run by the government.
Examples of People Who Have Both Private Insurance and Medicare
There are several situations in which people can have both of these types of healthcare insurance at the same times, such as:
- People with employer-based insurance and Medicare—In this case, the primary concern is determining if the private insurance provider (“primary payer”) is the one paying for claims before Medicare (“secondary payer”) pays. The answer to this question can depend on the size of the company from which an employee receives coverage.
- Americans having retiree insurance or COBRA insurance— After you become eligible for Medicare, your coverage will not end. However, holding onto it may make you ineligible for getting a Medicare enrollment period that’s penalty-free when your coverage does stop.
- Those having individual health insurance plans—Typically, it’s illegal for an insurer to sell people with Medicare beneficiaries new individual insurance plans. Such plans are sometimes referred to as “Marketplace” plans, “Obamacare”, and “qualified” plans.
- Veterans with VA coverage—Consider that the VA recommends enrolling in Medicare Part B even if you do have VA coverage. The advantage of doing this is that you’ll have a wider choice of outpatient doctors as well as more options for emergency care.
What Does It Mean to Pay First?
Perhaps you’ve heard of the term “paying first” but aren’t quite sure what it means. Put simply, this involves paying an entire bill up to coverage limits, although it doesn’t always mean that the primary payer is the party paying first.
The primary payer is the party that pays what is due on your medical bills first, paying up to the limits of its coverage. It then sends the remainder of the bill to the “secondary payer”, who only pays what wasn’t covered by the primary payer. Sometimes, there’s even a third payer.
Medicare, which may be your secondary payer, may not cover all uncovered expenses. If your secondary payer is your company insurance, you have to enroll in Medicare Part B before your company insurance pays.
Considerations and Warnings
- The open enrollment period for applying for Medicare begins three months prior to an applicant reaching the age of 65 and extends three months after turning 65.
- Insurance companies usually pay claims as soon as possible, which is within 120 days. However, if your provider fails to meet this deadline, your physician or your other insurance provider may send the bill to Medicare. After Medicare has made a conditional payment for paying the bill, it can then later recover payments that should have been made by the primary payer.
- Always first check with your insurance provider to ensure they’ve coordinated correctly with your coverage for Medicare. You may be penalized or have to make overpayments if your Medicare insurance and primary insurance are not synced properly.
- You can have what’s known as a Medicare Supplemental Insurance Plan if you don’t want your private insurance provider as your primary payer. These plans cover the gaps not paid by Medicare. The federal government determines what they cover or do not cover. As for their rates, they can depend on the specific company you choose.
Questions? Our insurance pros at Insurance Connection USA can help you choose the best Medicare options for your needs. Since navigating the Medicare maze can be complicated, it’s best to let an expert help you obtain as much information as possible. Please contact us for a free quote.