CAN I DROP MY EMPLOYER’S HEALTH INSURANCE AND GO ON MEDICARE?

People looking for both private insurance and public insurance (Medicare) for the cost of their healthcare services can have it covered under TRICARE or COBRA on eligibility.

How do private insurance and Medicare go hand in hand?

Health insurance covers medical healthcare costs depending on the individual’s financial situation and healthcare needs. However, Medicare has lower administrative costs than private insurance and can use its monopsony (single buyer) power to suppress provider fees. You can have both the coverage through coordination of benefits as an acceptable primary payer. The process ensures that the primary payer pays first and shares the coverage limit with the secondary payer that remains unfunded by the primary.

Primary and secondary payers come down to personal preference. However, private insurances manage to cover some parts of Medicare. This includes Medicare Advantage (Part C), prescription drug (Part D), and Medigap (Medicare supplement insurance) for those that agree to follow the rules and approved by Medicare to be a part of the program.

Different types of coverage along with Medicare

Coverage through an employer: The process is simple. You can have private insurance through your employer even though you have Medicare.

Coverage through your spouse’s employer coverage: You are eligible for Medicare through your spouse’s employer under the group plan.

COBRA: The way COBRA and Medicare coordinate depends on which form of insurance you have first. While it is possible to get COBRA if you already have Medicare, it is not usually possible to keep COBRA before you become eligible for Medicare. Specifically, whether you can have both COBRA and Medicare depends on which form of insurance you have first.

TRICARE: TRICARE insurance extends your health plan coverage for active and retired military members as well as their dependents.

You are eligible for Medicare and TRICARE:

• If you are 65 years or over and enrolled for Medicare Part B.
• If you’re under the age of 65, entitled to Medicare Part A, and have Medicare Part B, you don’t have to disenroll from TRICARE Prime or the US Family Health Plan.
• Have certain conditions like end-stage renal disease, disability, amyotrophic lateral sclerosis and enrolled for Medicare Part A & Part B to meet the eligibility criteria.

Insurance decisions can be compelling so consider reading the article before making any decisions.

Both Private insurance and employer/spouse’s employer coverage

If you are eligible for Medicare and keep the employer coverage under the following scenarios:

• If you are 65 years of age or older and your company is small with fewer than 20 employees, Medicare will be your primary health insurance and employer insurer as secondary.
• If you have a disability or ALS, Medicare is your primary insurer for companies that have fewer than 100 employees. If the company has more than 100 employees, your employer insurer pays first, and then Medicare covers the remaining cost.
• If you originally got Medicare due to your age or a disability (other than ESRD) and your group health plan or retiree coverage paid first, then it continues to pay first when you become eligible because of ESRD. You can have group health plan coverage or retiree coverage based on your employment or through a family member.

Consider that HMO & PPO plans require in-network providers to offer coverage by Medicare. If you have both COBRA and Medicare, in that case, Medicare pays first if you are 65 or older or have any disability. For ESRD, COBRA is the primary payer depending upon Medicare eligibility. If you have TRICARE, usually, it pays first along with Medicare deductibles and coinsurance costs if you are on active duty. However, if not, then Medicare pays first, and TRICARE becomes your secondary payer for life coverage.