Quick Answer
Medicare secondary insurance is any coverage that pays after Medicare has paid its share. The most common options are Medigap (Medicare Supplement), retiree insurance, Medicaid, and employer group health plans. Each works differently with Medicare.
Coverage Comparison by Plan Type
| Plan Type | Coverage | Notes |
|---|---|---|
| Medigap (Medicare Supplement) | Covers Part A/B deductibles, coinsurance, excess charges | Most comprehensive secondary option; standardized plans A-N |
| Retiree Insurance | Employer-sponsored coverage that wraps around Medicare | Coverage and costs vary by employer; may include drug coverage |
| Medicaid | Covers costs for low-income Medicare beneficiaries (dual eligible) | Income/asset limits apply; most comprehensive secondary coverage |
| Medicare Secondary Payer (MSP) | Medicare pays second when another insurer is primary | Applies with employer plans, workers' comp, auto insurance |
Understanding Your Coverage Options
Medigap (Medicare Supplement Insurance)
Medigap plans are private insurance policies specifically designed to supplement Original Medicare. They pay after Medicare pays its share, covering costs like the Part A deductible, Part B coinsurance, and excess charges.
There are 10 standardized Medigap plans (A through N). Plan G is currently the most comprehensive plan available to new enrollees, covering nearly all out-of-pocket costs except the Part B deductible.
What It Covers
- Part A deductible ($1,676 per benefit period in 2025)
- Part B coinsurance (20% of Medicare-approved amount)
- Part B excess charges (Plan G and Plan F)
- Skilled nursing facility coinsurance
- Foreign travel emergency (Plans C, D, G, M, N)
What It Doesn't Cover
- Prescription drugs (need a separate Part D plan)
- Vision, dental, or hearing
- Long-term care
- Cannot be used with Medicare Advantage
Best Time to Enroll
The best time to enroll in Medigap is during your 6-month Medigap Open Enrollment Period, which starts when you're 65 and enrolled in Part B. During this window, insurers cannot deny you or charge more based on health conditions.
Retiree Insurance
Some employers offer retiree health insurance that works alongside Medicare. Once you're on Medicare, your retiree plan typically becomes secondary, paying after Medicare pays its share.
Retiree coverage varies widely by employer. Some plans are very comprehensive and may eliminate the need for a Medigap policy. Others may have high deductibles or limited benefits.
What It Covers
- Varies by employer plan — may cover deductibles and coinsurance
- Often includes prescription drug coverage
- May cover dental, vision, and hearing
- Typically covers spouse and dependents
What It Doesn't Cover
- Coverage details vary — review your plan's Summary of Benefits
- Some retiree plans are less comprehensive than Medigap
- May require you to stay enrolled in Medicare Part B
Medicaid as Secondary Insurance
People who qualify for both Medicare and Medicaid are called 'dual eligible' beneficiaries. Medicaid acts as secondary insurance, paying costs that Medicare doesn't cover.
Dual eligible beneficiaries often pay little to nothing for healthcare. Medicaid can cover Medicare premiums, deductibles, coinsurance, and services Medicare doesn't cover like long-term care.
What It Covers
- Medicare Part A and Part B premiums
- Medicare deductibles and coinsurance
- Long-term care (nursing home, home health)
- Dental, vision, and hearing in many states
What It Doesn't Cover
- Income and asset limits apply — not everyone qualifies
- Coverage varies significantly by state
- Must use Medicaid-accepting providers
Medicare Secondary Payer (MSP) Rules
In some situations, Medicare is not the primary payer — another insurer pays first, and Medicare pays second. This is called Medicare Secondary Payer (MSP).
MSP rules apply when you have employer group health insurance (if employer has 20+ employees), workers' compensation, auto insurance, or liability insurance. Understanding which payer is primary is critical to avoid claim denials.
What It Covers
- Employer group health plan (20+ employees): employer plan pays first
- Workers' compensation: workers' comp pays first for work injuries
- Auto/liability insurance: pays first for accident-related care
- Medicare pays remaining balance after primary insurer
What It Doesn't Cover
- If primary insurer denies a claim, Medicare may not pay either
- Employer plans with under 20 employees: Medicare pays first
- COBRA coverage: Medicare pays first if you're eligible for Medicare
Secondary Insurance Cost Comparison
| Type | Monthly Cost | What It Covers |
|---|---|---|
| Medigap Plan G | $100-$300+ (age/location) | Part A/B deductibles, coinsurance, excess charges |
| Medigap Plan N | $80-$200+ (age/location) | Most costs; copays up to $20 for office visits |
| Retiree Insurance | Varies (employer-subsidized) | Varies by employer plan |
| Medicaid (dual eligible) | $0 (income-based) | Premiums, deductibles, coinsurance, LTC |
| Medicare Advantage (alternative) | $0-$100+ (plan varies) | Replaces Original Medicare; all-in-one |
✦ Important Considerations
Medigap Cannot be Used with Medicare Advantage
If you switch to a Medicare Advantage plan, your Medigap policy cannot be used to pay costs. You would be paying for a policy that provides no benefit. You should drop your Medigap policy if you enroll in Medicare Advantage.
Never pay for both Medigap and Medicare Advantage simultaneously.
Coordination of Benefits
When you have multiple insurance plans, they coordinate to determine who pays what. Medicare and your secondary insurer exchange information automatically through the Coordination of Benefits (COB) process — you don't need to file separate claims in most cases.
Medigap Medical Underwriting
Outside of your Medigap Open Enrollment Period, insurers can use medical underwriting to deny coverage or charge higher premiums based on your health history. Some states have additional protections.
Retiree Coverage May Require Medicare Enrollment
Many retiree plans require you to enroll in Medicare Part B as a condition of keeping your retiree coverage. Failing to enroll in Part B could cause you to lose your retiree benefits.
✦ Recent Policy Updates
Medigap Guaranteed Issue Protections
PassedFederal law guarantees your right to buy certain Medigap plans without medical underwriting during specific periods, such as when you first enroll in Part B or lose other coverage.
Medicare Advantage vs. Medigap Comparison Tool
PassedMedicare.gov updated its plan comparison tools to help beneficiaries better compare Medigap and Medicare Advantage plans side by side, improving transparency.
How to Choose the Right Secondary Coverage
The best secondary insurance depends on your health needs, budget, and whether you want the flexibility of Original Medicare or the simplicity of an all-in-one plan.
Decision Checklist
- If you want to see any doctor who accepts Medicare: choose Medigap + Part D
- If you want lower premiums and don't mind a network: consider Medicare Advantage
- If you have retiree coverage: review it carefully before buying Medigap
- If you qualify for Medicaid: apply — it's the most comprehensive secondary option
- If you have employer coverage: understand MSP rules before assuming Medicare pays first
- Enroll in Medigap during your Open Enrollment Period to avoid medical underwriting
✦ Frequently Asked Questions
David Haass
AuthorDavid Haass is a licensed insurance agent and Medicare specialist at MedicareFAQ.com.
Ashlee Zareczny
ReviewerAshlee Zareczny is the Compliance & Editorial Manager at MedicareFAQ.