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How does insurance work when Medicare coordinates with other health insurance? You may have Medicare Part A and another health insurance plan, for instance. The other health plan could come from a job, a union, a private company, or a government organization.
Here’s how Medicare coordination of benefits works.
How does insurance work with Medicare and other health plans?
To learn how insurance works, let’s start with a few definitions according to Medicare.
- Payer: Your health insurance coverage – for example, Medicare or an employer plan
- Primary payer: The health insurance that pays first, up to its limits
- Secondary payer: The secondary health insurance pays then pays what the primary payer doesn’t cover, up to the secondary payer’s limits. The secondary payer might not cover all costs that the primary payer didn’t cover.
In some cases, you may have multiple other health-care plans. Each could have its own rules.
How does insurance work with a primary and secondary payer?
Medicare coordination of benefits rules determine which type of coverage is the primary and which is the secondary payer. This example might help you understand how the primary and secondary payer work together:
- Let’s say you have an outpatient medical bill for $1,000, and Medicare Part B is the primary payer. If you have paid your Part B deductible, it could pay 80 percent, or $800.
- The secondary payer may pay the other $200 if it covers the service and you’ve paid your secondary plan’s annual deductible.
- Like the primary payer, the secondary payer may have limits and uncovered services. There’s no guarantee that the secondary payer will cover all expenses.
How does insurance work to determine the primary and secondary payer?
By now, you may wonder, “How does insurance work to figure out who pays first and who pays second?” This may depend on the kind of health insurance you have or the size of your employer’s company. These examples assume you’re enrolled in Medicare and that you also have other coverage.
- Group health insurance: You might have health insurance from an employer or a spouse’s employer. If it’s a small company with fewer than 20 employers, Medicare will usually pay first. If you have benefits from a larger employer, the employer plan typically pays first. Still, you can ask the company’s benefits department to make sure.
- Medicaid: Many people who have Medicare also qualify for Medicaid. In most cases, Medicaid pays after Medicare and any other health insurance you may have.
- Veterans’ benefits: If you have Veterans Benefits Administration (VBA) benefits, you may need to choose whether the VBA or by Medicare will provide your coverage. You may need to visit a VBA facility or have the VBA authorize services for the military agency to pay. Medicare may help pay if you don’t get services authorized or the VBA won’t cover all services.
- Liability insurance: Suppose you need health care because of an auto accident. Liability insurance may pay some or all of your healthcare bills. In this case, Medicare is usually the secondary payer.
How does insurance work if the other payer doesn’t pay?
Sometimes, your other insurance may not pay claims promptly. Since Medicare generally pays its share, medical providers may send bills to Medicare if they don’t get compensated within a reasonable amount of time.
In this case, Medicare might make a “conditional payment” to protect you from being stuck paying hefty medical bills when a claim is taking a long time. Medicare generally tries to collect the payment from the other health plan. This helps protect both Medicare beneficiaries and healthcare providers.
How does insurance work for you?
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