- What Are the Benefits of Having Primary & Secondary Medical?
- If I'm Covered by Medicare Should I Have Additional Health Insurance?
- Social Security Medical Benefits Parts A & B
- Early Retirement Health Insurance Policies
- What You Need to Know About Medigap
- Insurance Companies That Provide Medicare Health Savings Accounts
Secondary medical insurance is any health insurance that pays for costs that exceed Medicare coverage. If you're in a group health plan from your company's retirement package, that's secondary insurance. Medigap and Medicaid are secondary insurance. They're secondary because Medicare, the primary insurer, pays everything it's obligated to pay before the secondary insurer even pulls out its wallet.
Why Does Secondary Insurance Matter?
There's nothing odd about wearing a belt and suspenders if the belt doesn't go all the way around your middle. Medicare is that belt. It covers just 80 percent of the cost of a hospital stay and 80 percent of medical services beyond the most basic preventive services. You'll pay the other 20 percent, plus deductibles ($1,184 per hospitalization, $147 yearly for medical services in 2013). The bill might also include what Medicare calls excess charges -- any health care that goes over Medicare's payment cap.
What Does Secondary Insurance Cover?
If your secondary insurance is from your employer's retirement package, you will have to contact the insurer to find out the details of coverage. The secondary coverage may include coinsurance for Part A or Part B, and it may also cover prescription drugs. If you're covered by your spouse's plan and your spouse is still working, Medicare is the secondary payer.
Does Medicare Ever Pay First if You Have Secondary Insurance?
Sometimes, a private insurance company is the primary payer. If your illness is covered by liability insurance -- if it's from a car accident, for example -- the liability insurance pays first and Medicare pays second. Medicare may pay the bill on a conditional basis until your claim money comes from the insurer, and then you pay Medicare back. Sometimes Medicare makes conditional payments for workers' compensation claims as well.
Are There Other Kinds of Secondary Insurance?
A Medigap is secondary insurance that you buy for yourself. Medicare calls it supplemental medical insurance, and it operates under Medicare regulations, but whether you buy one is your choice. Other private insurance policies authorized under Medicare Part D cover prescription drugs. You can sidestep the need for secondary coverage altogether by considering Medicare Advantage plans, which are authorized under Medicare Part C. They typically cover most if not all of your out-of-pocket Medicare costs.
Can a Medigap Policy Save Me Money?
A Medigap policy could save you a lot of money, but not necessarily right away. The most comprehensive policies run about $2,500 a year. A single hospital visit gets you halfway there, not to mention that if you've been out of the hospital for 60 days and then go back in, you pay another $1,184 deductible. Plan B can also get pricey, too. However, Medigap premiums rise quickly as you age unless you buy a Medigap policy during your age 65 enrollment period.
Can a Prescription Drug Plan Save Me Money?
You'll have to do some research on prescription drug savings by checking prices on the prescription drugs you take now and weighing them against prescription drug plan, or PDP, premiums. Monthly premiums vary from $28 to $47 across the country, according to the Henry J. Kaiser Family Foundation, and Medicare estimates that a basic plan will cost $31 a month. Not all plans have deductibles, and of those that do, the top deductible is $325. Under the Affordable Care Act, too, Medicare patients' costs for brand-name drugs have been on the decline, but if you take more than one, they can add up fast.
- Medicare.gov: Retiree Insurance
- Medicare.gov: Medicare and Other Health Benefits -- Your Guide to Who Pays First
- Henry J. Kaiser Family Foundation: Medicare Part D -- A First Look at Plan Offerings in 2014
- CMS.gov: New Data Shows Affordable Care Act Helped Seniors Save $8.9 Billion on Prescription Drugs Nationwide
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