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.

First check whether the payment is correct. At age 65 or older, an employer plan generally pays first if it covers you through your or your spouse’s current employment and the employer has 20 or more employees. Smaller employers generally pay second, although multi-employer plans can be an exception. Retiree coverage also generally pays second.

When Medicare should pay first, some plans subtract what Medicare would have paid even if you did not enroll. This can leave a large gap, but the amount depends on your plan’s terms. Ask for the rule in writing and dispute an incorrect reduction.

If Medicare should be primary, enrolling in Part B can address the missing coverage for covered services from your effective date. Deductibles, coinsurance, and plan exclusions may still apply. The start date depends on your enrollment period, so act promptly.

Why This Happens

• You turned 65 and didn’t sign up for Medicare Part B. If Medicare should pay first under the coordination rules, your plan may reduce payments even while you are unenrolled.
• Your employer has fewer than 20 employees. At age 65 or older, Medicare generally pays first for small-employer coverage. Check for a multi-employer plan exception before assuming this applies.
• Your commercial plan reduced its payment to the “Medicare-equivalent” amount. Some plans reduce payment by the amount Medicare would have paid. The remainder is not always 20%; ask your plan how it calculated the payment.
• 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. Using an in-network provider does not necessarily prevent a reduction under a valid Medicare coordination provision.

Should You Appeal?

What To Do Next

1. Confirm which plan should pay first for the dates of care. If your employer plan should be primary, ask the plan and your providers to correct the claims in that order, and use the plan’s appeal process if needed. Protect the deadline on its notice. Enrolling in Part B does not make Medicare primary. The enrollment and Medicare-primary billing steps below apply if Medicare should pay first. If you are unsure, ask your SHIP before choosing a path.
2. If Medicare should pay first, call Social Security at 1-800-772-1213 about enrollment and the Special Enrollment Period (SEP). Bring evidence of employment and coverage dates, and ask SSA to confirm your coverage start date. If you maintained qualifying group coverage through your or your spouse’s current employment, you may qualify for a Special Enrollment Period without a late penalty. The 8-month window starts the month after the employment or group coverage ends, whichever happens first. 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 that window has passed, ask about exceptional-conditions SEPs, including employer or health-plan misinformation. Otherwise, the General Enrollment Period is 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. A hold is not guaranteed; ask for written confirmation.
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 Part B coverage is confirmed, and Medicare should pay first, contact each provider again. Give them your Medicare information and ask them to bill Medicare as primary only for services on or after your confirmed Part B coverage start date. Ask your commercial plan to reprocess its portion under its secondary-payment rules. (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

• SSA POMS HI 00805.276 — employer-coverage SEP effective dates; the consumer page below simplifies this to next-month coverage.

• SSA POMS HI 00805.275 and 42 CFR 407.20 — employer-coverage SEP timing and eligibility.

• 42 CFR 407.23 — exceptional-conditions SEPs and their different effective-date rules.

• SSA POMS HI 00805.170 — equitable relief, including federal misinformation relayed through an employer or insurer.

• 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