Can I Use Private Insurance Instead Of Medicare?

Medicare As An Automatic

In some cases, Medicare is an automatic. For instance, Medicare.gov says that if you receive benefits via either Social Security or the Railroad Retirement Board (RRB) for more than four months before turning 65, you automatically receive Medicare Part A (hospital insurance) and Part B (medical insurance).

One exception to this is if you live in Puerto Rico. While Part A is automatic for Puerto Rican residents, you have to sign up for Part B.

When automatic coverages take place, they are typically effective the first day of your birth month. However, if your birthday is on the first, they kick in the month before.

Medicare is also automatically provided if you’re under 65 years of age and have received disability benefits from Social Security for a period of 24 months or if you’ve been receiving certain disability benefits under the RRB for the same timeframe.

If you’ve been diagnosed with ALS (amyotrophic lateral sclerosis), which is more commonly known as Lou Gehrig’s disease, Medicare is provided without any action on your part and becomes effective the month disability benefits begin.

Choosing the Private Insurance Option

If none of these situations apply to you and you want to use private insurance instead, it’s important to understand that there is only a seven-month window in which you can apply for Medicare benefits, according to Medicare.gov.

This period typically begins three months before your 65th birthday, includes the month of your birthday, and ends three months later. Apply at any other time and you may face a lapse in coverage or penalties.

These penalties appear as premiums that increase by 10 percent for each 12-month period you’re eligible for Part B but do not sign up. Also, if you bypass your Initial Enrollment Period, you can only sign up for Part B during the General Enrollment Period, with is January 1st to March 31st each year, with coverage beginning in July.

Now, let’s say that you’re okay with this and still want private insurance versus Medicare. If you go through the Marketplace to get that insurance, Healthcare.gov warns that it is illegal for anyone to sell you a Marketplace plan if they know that you have Medicare.

So, if you have already signed up for Medicare, the Marketplace is not an option for finding a new insurance plan. The only exception is if you are paying a premium for Medicare Part A. In this case, you can drop Medicare and go with a plan that you find on the Marketplace.

Additionally, if you are able to sign up for Medicare—whether due to age or disability—but have not, you can purchase a Marketplace plan then, too.

Using Medicare With Other Insurances

You can also have both Medicare and private insurance to help cover your health care expenses.
In situations where there are two insurances, one is deemed the “primary payer” and pays the claims first. The other becomes known as the “secondary payer” and only applies if there are expenses not covered by the primary policy.

Medicare.gov says that the coordination of benefits rules determine which policy is the primary and which is the secondary.

For instance, if you are 65 or older and have insurance through your employer or your spouse’s employer and that employer has 20 or more employees, the rules dictate that the employer’s policy is the primary payer and Medicare is the secondary payer. However, if the employer employs fewer than 20 people, Medicare will usually be the primary.

In claims arising from no-fault or liability insurance cases, the no-fault or liability policy is the primary payer and Medicare is the secondary. However, if the primary denies a medical bill or has decided that it is not liable for the service rendered, Medicare will act as a sole insurance policy and pays as such.

Medicare is also secondary if medical expenses occur as a result of on-the-job accidents involving a workers’ compensation claim as the employer’s insurance is required to pay first.

Medicare And Military Health Benefits

If you are active-duty military and enrolled in TRICARE, which is the health insurance policy offered to U.S. service members, it will cover the services and supplies that Medicare typically covers. It will also pay for deductibles and coinsurances required under Medicare if the TRICARE policy provides benefits for that particular service or supply.

For military members who are not active duty, Medicare is the primary payer for all services covered under the participant’s Medicare policy. The one exception to this is if your services are provided by a military hospital or some other federal healthcare provider. In cases such as these, Medicare typically does not pay for them, but TRICARE does.

And if you receive Veterans’ benefits in addition to Medicare, Medicare.gov says that participants must choose which policy they’ll use when seeking medical care because you can only use one or the other, not both.

However, if the U.S. Department of Veterans Affairs (VA) authorizes services at a non-VA hospital but doesn’t cover all services received during that hospital stay, Medicare may pick up some of those costs. It may even pay some or all of your copayment for these types of expenses.

Retirement Insurance And Medicare

Sometimes when employees retire, they are provided group health coverage from the employer.
These opportunities are not as widespread as they used to be because most companies no longer offer pensions. However, a news release prompted by Willis Towers Watson’s 2017 Global Benefits Attitudes Survey reports that a majority of people surveyed would pay for this benefit if it was brought back.

Specifically, out of 5,000 U.S. employees questioned, Willis Towers Watson found that 66 percent said they would have no problem paying more per month for their benefits in return for a better retirement package. Sixty-one percent said they’d even give up a portion of their pay if they were to receive a guaranteed retirement benefit.

If your company offers health insurance benefits for retirees, Medicare.gov says that Medicare will typically be the primary payer and the retirement plan the secondary. It all depends on the rules created by this other plan as this has an impact on which plan pays first.

Medicare.gov also warns that your former employer or union has have the right to change the benefits of that coverage or increase its premiums because they have control over it. They can even cancel the coverage if they wish.

Additionally, some retirement-based health plans may choose to not pay for medical services if you are eligible for Medicare but don’t sign up. When this occurs, participants must sign up for both parts A and B to be entitled to full coverage from the retirement insurance plan.

Conditional Medicare Payments

When there are two insurances, Medicare may sometimes make what is called a “conditional payment.”

Medicare makes this payment to a healthcare service provider or supplier even if there is another potential payer that may be ultimately responsible for the costs, just so the participant doesn’t have to reach into his or her own pocket to pay that bill.

Conditional payments must be repaid in certain circumstances. For instance, if you receive a settlement or judgment, you may have to repay Medicare for some or all of that expense. The same is true if you receive any other payment as a result of that illness or injury.

For More Information Specific To Your Medicare Policy

If you have Medicare and an additional insurance policy and you’re still unsure which is primary and which is secondary, or if you’d like to learn more about all of your insurance options even though you are or will be Medicare eligible, you can contact the Benefits Coordination & Recovery Center at (855) 798-2627 (or 855-797-2627 TTY).

You can also reach out to the State Health Insurance Assistance Program (SHIP) for assistance. To find your local SHIP, Medicare.gov offers an easy-to-use online SHIP search tool that will provide the information you need.