Medicare Answers: Who Pays First, Plan B or Group? Also, the Birthday Rule

  • Originally published November 13, 2012 , last updated December 23, 2014
  • Medicare
Medicare Answers: Who Pays First, Plan B or Group? Also, the Birthday Rule

If you have a Medicare question you’d like answered, email it to AskRoger@SeniorMarketSales.com.

This week Roger tackles two questions.

Bill of Ohio asks,
I have a male that turned 65 and enrolled in Part B in August of this year. He still works for Whirlpool and has a group plan with a $4,000 deductible. His wife is disabled and on the same plan. My insured had outpatient surgery and Medicare paid for outpatient surgery less the Part B deductible and then 80% of the Medicare approved amount.

When he retires, Whirlpool will give him $90 per month if he continues on the group. At this time he wants a Medicare Supplement to supplement his $4,000 deductible on the group. What should I advise that he do?

This comes down to who pays first. I am assuming that Whirlpool’s group is larger than 20, which means as long as your client is working, the Group Insurance is Primary and pays first. When he retires Medicare will be Primary and pay first.

Your client can purchase a Medicare Supplement and will qualify during the Initial Enrollment Period the six months after enrolling in Part B. Once he retires, Medicare will be the primary payer, then Medicare Supplement would pay and then the group would pay if there is anything left. So it may be a good option to keep the group coverage and buy a Medicare Supplement if he is not paying for the group.

Staying on the group for the wife’s benefit is wise because it’s possible the prescription drug benefits on the group are superior to a Part D Medicare. Plus, the $90 per month will be helpful.

I really don’t know if there is a right or wrong answer here. I would advise that the client should always contact their plan administrator to discuss in more detail their options.

Pam in California Asks,
If a Medicare Beneficiary was on a MA-PD during 2011 and during AEP moved to Supp Plan F — High Deductible, can he move to a standard Plan F when his birthday rolls around?

The quick answer is no because of the way that law reads. Although Medicare is a federal program, some states have regulations regarding its administration. California has a unique supplement law known as the birthday rule that allows residents to enroll for Medicare supplements with a different insurance company for 30 days following their birthday. The new Medigap plan must offer either the same benefits or fewer benefits, and companies are not allowed to deny new applicants for health reasons.

Check with the Medicare Supplement carrier your client was with prior to going to the MA-PD, the client could have certain “Trial Right” options.