Question: Is Medicare primary or secondary, and how does that influence my decision when enrolling in Medicare?
Answer: If your company has 20 or more employees, your employer plan is primary and Medicare is secondary. In this situation, you can delay enrollment in Medicare Part B but you need to evaluate your particular situation and crunch the numbers to determine which option makes the most sense.
If your employer has fewer than 20 employees, then Medicare is primary, and your group health plan is secondary. Therefore, you should enroll in both Medicare Parts A and B when you turn 65 because Medicare will pay first. If you fail to enroll in Medicare in this situation, you could wind up being responsible for medical bills that Medicare would have paid for if you had enrolled in Parts A and B when you were supposed to.
This can happen:
You are planning to work past age 65 and seek advice from a friend who has also worked past age 65 at a large company. Your friend’s benefits department correctly told her that she didn’t need to sign up for Medicare because she had group health insurance. As a result of your conversation, you also decide to keep your company health insurance and not enroll in Medicare when your turn 65. However, unlike your friend, you work for a small company with fewer than 20 employees and fail to realize that small-employer coverage does not coordinate with Medicare in the same way. This is made painfully aware when, shortly after your decision to keep your company health insurance and not enroll in Medicare at age 65, your cardiologist tells you that you need heart surgery. You call your employer insurance company for prior authorization only to discover that the employer insurance company will only pay 20% of the medical costs. Medicare is primary when you work for an employer with under 20 employees. Medicare is therefore responsible for 80% of the medical costs. Since you didn’t enroll in Medicare, you are responsible for 80% of the medical bills associated with the upcoming surgery that Medicare would have paid.
Key Take-away: Medicare is complicated. Your situation may be different from that of your friends, your colleagues, and even your spouse. Make sure you are fully informed before making a decision that could have irreversible consequences.