Do I need Medicare if I already have health insurance?

Many older adults who qualify for Medicare—but still have private health insurance through a partner or employer—wonder exactly how Medicare will figure into their future plans. Should they enroll in Parts A and B as soon as they are eligible or are there good reasons to delay enrollment? The answer will depend on a few variables, so read on to discover what option may be a good fit for you. 

Regardless of other coverage, most people choose to enroll in Medicare Part A when they reach the qualifying age of 65 years old. Medicare Part A is free to most Medicare qualified individuals and helps to pay for inpatient hospital care, skilled nursing care, hospice and home health care. If you are enrolled and require any of these services Medicare would be either the primary or secondary payer for your claims, depending on your other policy. Having a primary and secondary payer could help limit your exposure to potential out-of-pocket expenses.  

Medicare Part B—which covers outpatient medical services—is a bit more tricky. If you already have private health insurance through a former or current employer, union or spouse, you may decide to delay enrolling in Part B to avoid paying the monthly premiums. The standard monthly premium for Part B in 2020 is $144.60, but it can be considerably more for people with higher incomes. If the coverage you have is considered “creditable” by Medicare standards there is no penalty for delaying enrollment in Medicare Part. B. Contact your employer or union benefits administrator provider to find out if your plan qualifies. Coverage is deemed creditable if it is at least as comprehensive as the benefits offered by Medicare Part B. Many people are surprised to discover that the COBRA insurance offered by some employers during transitional times and employment-based retirement insurance are not considered creditable by Medicare. Also, you could be subject to penalties if you lose your private health insurance and don’t enroll in Medicare Part B within 8 months. 

If you decide to enroll in Part B and keep your private insurance coverage both policies will be in effect. Coordination of benefits rules will decide which policy is the primary and which is the secondary payer. How do you know which policy will be primary? Generally speaking if  the private policy is through a larger employer—with 20 or more employers—then it will be the primary payer and Medicare will be secondary. If your private insurance policy is through a smaller employer—with less than 20 employees—then Medicare will be primary and the private policy will be secondary. Keep in mind that if your employer insurance is the secondary payer, you might need to enroll in Part B before your insurance will pay.

Having other coverage gives you options when deciding how to utilize the Medicare program. Knowing the deadlines and requirements for avoiding penalties can ensure you get the most benefits without incurring penalties.