Medicare-Eligible but Kept Commercial Insurance

What This Means

You are over 65, still working or on a spouse’s employer plan, and you decided not to sign up for Medicare Part B. That seemed like a reasonable choice — you already had health insurance through work. But now your commercial plan is paying only a small fraction of your medical bills, sometimes as little as 20% of what Medicare would allow. You are getting billed for the rest.

This is not a billing error. Once you become eligible for Medicare, most commercial health plans assume Medicare is your primary insurance. If you did not enroll in Medicare Part B, there is no primary insurer paying its share. Your commercial plan calculates what Medicare would have paid, subtracts that amount, and pays only the remainder. The gap lands on you.

The good news: the underlying problem is fixable. Once you enroll in Medicare Part B, Medicare becomes your primary payer and your commercial plan pays correctly as secondary, so the gap stops going forward. Part B coverage usually starts the month after you enroll rather than retroactively, so act quickly — and read on to see whether any of your existing bills may still qualify for retroactive coverage.

Why This Happens

• You turned 65 and didn’t sign up for Medicare Part B. Many people assume their employer plan provides full coverage on its own. But once you are Medicare-eligible, the commercial plan expects Medicare to pay first.
• Your employer has fewer than 20 employees. When the employer is small (under 20 workers), Medicare is automatically the primary payer by law. The commercial plan pays only the portion that Medicare does not cover. Without Medicare Part B, that primary payment never happens.
• Your commercial plan reduced its payment to the “Medicare-equivalent” amount. This is common language in plan documents. The plan pays roughly 20% of the Medicare-approved amount — the portion it would pay as a secondary insurer — even though Medicare never actually paid anything.
• Nobody told you this would happen. Employers and insurers do not always explain how coverage changes when you become Medicare-eligible. Many people only discover the problem when they receive a large bill months later.
• You assumed in-network meant full coverage. Even when you see in-network providers, the commercial plan still reduces its payment if you are Medicare-eligible but not enrolled. The in-network discount does not protect you from this gap.

Should You Appeal?

What To Do Next

1. Call Social Security at 1-800-772-1213 to enroll in Medicare Part B. Ask which enrollment period applies to you and when your coverage will start. Bring proof that you had employer coverage (such as a letter from your employer or a copy of your insurance card). You can also visit your local Social Security office in person.
2. Ask about the Special Enrollment Period (SEP). If you (or your spouse) are still working and covered by that job’s group health plan, or you stopped working within the last 8 months, you may qualify for a Special Enrollment Period that lets you enroll in Part B without a late penalty. Important: this 8-month window runs from when your (or your spouse’s) active employment ends — not from when COBRA or retiree coverage ends. COBRA and retiree coverage do not count as active-employment coverage, and they do not give you a new Special Enrollment Period when they run out. If your active-employment coverage ended more than 8 months ago, you’ll likely enroll during the General Enrollment Period (January 1 – March 31), with coverage starting the following month.
3. Contact every provider’s billing office. Let them know you are in the process of enrolling in Medicare Part B. Ask them to hold your bills and not send them to collections while you complete the enrollment. Most billing offices will agree to wait if you explain the situation.
4. Send a written request to each provider. Put your hold request in writing. Include your name, date of birth, account number, and a brief explanation that you are enrolling in Medicare Part B and will ask them to bill Medicare for services on or after your coverage start date. Keep a copy of every letter you send.
5. Once your Medicare Part B card arrives, call each provider again. Give them your new Medicare number and ask them to bill Medicare as the primary payer for services on or after your Part B coverage start date. Your commercial plan will then reprocess its portion as the secondary payer. (Services from before your Part B coverage started generally can’t be rebilled to Medicare unless a retroactive exception applies.)
6. Contact your SHIP for free help. Your State Health Insurance Assistance Program provides free counseling for Medicare beneficiaries. A SHIP counselor can walk you through the enrollment process, help you communicate with providers, and make sure nothing falls through the cracks.

Sources

• Medicare.gov: How to Sign Up for Medicare Part B — official enrollment instructions and deadlines
• Medicare.gov: When Does Medicare Coverage Start? — when Part B and Part A coverage begin, including retroactive Part A
• Medicare.gov: Who Pays First — interactive tool to determine whether Medicare or your employer plan is primary
• SSA.gov: Medicare Benefits — Social Security’s guide to Medicare enrollment, including retroactive coverage
• CMS: Medicare Secondary Payer Overview — official rules on how Medicare coordinates with employer plans
• SHIPHELP.org: Find Local Medicare Help — free, unbiased counseling from your State Health Insurance Assistance Program

Frequently Asked Questions