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How Does Medicare Part D Work with Other Insurance?

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Summary: You can have more than one insurance help you pay for prescription drugs. Medicare Part D Prescription Drug Plans coordinate benefits with other prescription drug coverage to determine who pays first for your prescriptions.

Some prescription drugs can cost hundreds of dollars for a single pill, according to CNBC. And if you take five prescription pills a day at just $15 a piece, you’re still facing $75 a day in medication costs. If that’s the case for you, you probably want the best prescription drug coverage you can get, including if it means combining different types of insurance.

Medicare Part D prescription drug coverage is offered by private insurers contracted with the Centers for Medicare & Medicaid Services (CMS). If you currently have prescription drug coverage through another source it’s important to understand how Medicare Part D coverage works with other insurance.

What is Medicare Part D coordination of benefits?

You can have more than one insurance help you pay for prescription drugs. Medicare Part D Prescription Drug Plans coordinate benefits with other prescription drug coverage. This means that for covered prescription drugs the primary insurance typically pays first. Thereafter, the secondary insurance pays the remaining unpaid amount up to its limits. Whether the Medicare Part D coverage pays first or second for covered prescription drugs depends upon your circumstances and the source of the other prescription drug coverage.

When does Medicare Part D pay first?

Usually Medicare Part D coverage is the primary payer. Are you retired and have prescription drug coverage through your or your spouse’s former employer’s or union’s retiree Group Health Plan and Medicare Part D coverage? If so, your Medicare Part D coverage is primary and the Group Health Plan is secondary. If there is an amount that remains unpaid, you or your spouse’s retiree Group Health Plan pays third in accordance with its prescription drug benefit provisions.

Are you covered under a State Pharmaceutical Assistance Program (SPAP) and have Medicare Part D coverage? SPAP coverage is secondary to Medicare Part D, so your Medicare Part D coverage will pay first for covered prescriptions.

Are you covered under a SPAP, have retiree Group Health Plan coverage, and Medicare Part D coverage? Your Medicare Part D coverage is primary to both the retiree Group Health Plan and the SPAP coverage. The Medicare Part D plan will pay first, then the retiree Group Health Plan would be billed second, followed by the SPAP if there is any remaining balance.

Do you have Tricare for Life and Medicare Part D coverage? The Medicare Part D Plan will be billed first and pay its portion for covered prescription drugs. Tricare for Life will pay its portion of the balance if the prescription drug is also covered under the Tricare for Life pharmacy benefit and the pharmacy participates in both the Medicare Part D Plan’s and Tricare’s networks.

When is Medicare Part D not the primary payer?

Are you currently working and covered by your employer’s or union’s Group Health Plan and have Medicare Part D coverage? Generally if you are actively employed, your employer’s Group Health Plan is primary to Medicare Part D coverage. However, if you work for a small firm of 20 or fewer employees, usually your Medicare Part D Plan pays first and the Group Health Plan, second.

  • Are you currently working and covered under worker’s compensation insurance and have Medicare Part D coverage? Worker’s compensation insurance is primary to the Medicare Part D Plan for all prescriptions related to the worker’s compensation injury or illness. If the prescription drug is not related to the worker’s compensation injury or illness, only the Medicare Part D Plan will be billed.
  • Have you been injured (in an automobile accident, for example) and have no-fault or liability insurance and Medicare Part D coverage? Usually the no-fault or liability insurance is primary and would be billed first. If the prescription drug is not related to accident, only the Medicare Part D Plan will be billed.

Do you have Medicare Part D and Medicaid?

Medicaid pays only for drugs that are NOT covered by Medicare Part D. Therefore, you will never have prescription drugs paid by both Medicaid and Medicare Part D coverage.

Are you covered under both a retiree Group Health Plan and Medicaid and have Medicare Part D coverage? The Medicare Part D Plan will pay first and then the Group Health Plan will be billed to pay its portion of the remaining prescription drug cost. Medicaid is the “payer of last resort,” so it is secondary to the Group Health Plan. However, Medicaid won’t be billed if the Medicare Part D Plan covered the prescription drug because Medicaid cannot pay for Part D covered prescriptions. If Medicare Part D did not cover the prescription drug, Medicaid will pay secondary to the retiree Group Health Plan.

When you have one or more prescription drug plans that coordinate with your Medicare Part D coverage, your out-of-pocket expenses are usually minimal, if you owe any amount for your medications. Keep in mind, each plan will take into consideration its own coverage guidelines, including what prescription drugs it covers.

Would you like more information about Medicare Part D coverage or Medicare Part D Prescription Drug Plans where you live? Enter your zip code on this  page and choose the type of Medicare plan you would like to find.

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