Medicare is a health insurance program for American citizens and permanent residents who are 65 and older. While Medicare is accessible to anyone 65 and older, younger people with certain disabilities can also obtain Medicare coverage. People who have received Social Security Disability Insurance (SSDI) for at least 24 months are automatically enrolled in Medicare Part A and Part B.

According to the Kaiser Family Foundation, over 9 million people age 18 to 64 had Medicare due to a disability in 2017, or 16% of the total Medicare population. Since a fair portion of the Medicare population is under 65, beneficiaries, doctor offices, and other people handling the insurance must know how Medicare works with disability coverage under 65.

When Medicare is primary under 65

More often than not, Medicare will be primary coverage for people under 65. When Medicare is primary, it pays before any other insurance the beneficiary may have. Generally, Medicare is primary if the beneficiary; a) has employer coverage through an employer with less than 100 employees; b) has retiree insurance; c) just has Medicaid; d) has no other coverage.

Employer coverage with less than 100 employees

If a beneficiary is under 65 with Medicare and employer coverage through an employer with less than 100 employees, then Medicare will pay primary to the employer coverage. As the beneficiary accesses medical services, Medicare will pay according to its guidelines, and the employer coverage will pick up the difference.

For example, if the beneficiary goes to the doctor for an exam and lab work, he would have to pay the Part B deductible unless it has already been met. Then, Medicare Part B will cover 80% of the remaining bill. The 20% is then sent to the employer coverage. The employer coverage then pays according to their guidelines. These same rules apply for retiree coverage.

Medicare and Medicaid

Also called Medi-Medi, Medicare and Medicaid work well together to cover the health needs of dual-eligible beneficiaries. A dual-eligible is a beneficiary who qualifies for Medicare and Medicaid. Dual-eligible individuals have substantial coverage through Medi-Medi.

There are a few stipulations in making sure Medicare and Medicaid both pay. First, the beneficiary needs to use doctors who accept both Medicare and Medicaid. If a beneficiary used a doctor who only accepts one or the other, then only the program the doctor accepts may pay.

Also, for Medicare to pay, the service must be medically necessary. Services that aren’t medically necessary won’t be covered by Medicare. Therefore, either only Medicaid would pay, or neither would pay, depending on the situation.

When Medicare is secondary under 65

Generally, Medicare pays secondary when beneficiaries are under 65 and have either a) employer coverage through an employer with 100+ employees; b) have employer coverage through a spouse’s employer who has 20+ employees. The employer size requirements are different based on the age of the Medicare beneficiary and who the active employee is.

When beneficiaries are under 65 and actively working, their employers must have more than 100 employees to be considered a large employer. However, if the under-65 Medicare beneficiary is retired and has coverage through a working spouse, the employer-size requirement is the same as if the beneficiary was over 65.

When beneficiaries are over 65 and actively working, their employers only have to have more than 20 employees to be considered a large employer. If a beneficiary has coverage through a large employer, Medicare pays secondary to it.

Large employer coverage and Medicare

If a beneficiary has large employer coverage and Medicare, the employer coverage will pay first. The doctor will need to bill the employer plan first. Once the employer plan has paid, the doctor then bills Medicare for any residual balance. Any costs leftover will be the beneficiary’s responsibility.

Under-65 Medicare beneficiaries without any other coverage

Under-65 Medicare beneficiaries who don’t have Medicaid, employer or other coverage may be able to enroll in a Medigap plan or Medicare Advantage plan. However, Medigap plans tend to be very expensive for those under age 65. Also, some states aren’t required to offer Medigap plans in this situation.

For this reason, Medicare Advantage plans are a good option for under-65 Medicare beneficiaries. Once the beneficiary turns 65, he will be able to buy a Medigap plan at normal 65-year-old rates without having to answer any health questions.

Danielle K. Roberts is a Medicare insurance expert and co-founder at Boomer Benefits, where her team of experts help baby boomers with their Medicare decisions nationwide.

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