Medicare Secondary Insurance Vs. Supplemental Policy

Soon after the Federal government implemented Medicare in July 1965, private insurance companies began offering policies covering areas that Medicare did not. In 2010, the government mandated uniform Medicare Supplemental Insurance policies, often called Medigap. Medicare secondary insurance is also offered by private insurance companies, and supplements your primary Medicare Part A and Part B coverage. In other respects, the two insurance types are very different.

Medicare Supplemental Insurance, often called Medigap, is a particular kind of secondary insurance that fills in coverage gaps in the standard Medicare policy. The policy is offered by private companies, not the Federal government. You can buy the insurance only if you already have Medicare Part A and Part B. Like Medicare, once you qualify for Medicare Supplemental and continue to pay your premiums, by law the company cannot drop you.

Medicare secondary insurance is group health insurance that comes through your employer, often as a retirement benefit. Medicare and Medicare secondary insurance benefits often overlap. The benefits paid by Medicare secondary insurance will be those not already covered by Medicare Parts A and B. You usually need to enroll in Medicare Part B before your secondary insurance company will pay benefits. Both insurance types are regulated by federal and state governments, however, the primary regulator for Medicare is the federal government, while Medicare secondary insurance is largely state-regulated. Insurance companies can only sell you a standardized Medicare Supplemental policy that does not differ in cover from one company to another. Medicare secondary policies, however, differ widely from company to company, and within a single company from one covered group to another.

Because Medicare Supplemental is designed to fill in coverage gaps in Medicare Part A and Part B, coordination between the policies is relatively seamless. Once you have enrolled in Medicare Part A and Part B, the assignment of billings to Medicare and Medicare supplemental will normally happen automatically. Be aware that you will need one Supplemental policy for yourself and another for your spouse.

Medicare and Medicare secondary insurance do not automatically coordinate with one another. The Medicare system only knows you have secondary insurance if you indicate on your Medicare initial enrollment questionnaire that you have coverage through your group health plan or your spouse's health plan. Let your doctor or other provider know that you have both policies Sometimes there are payment issues when both plans are in force. In the event that an amount remains unpaid after both plans have paid, ask your Medicare Coordination of Benefits contractor to help you resolve the issue.