Many Medicare beneficiaries initially hold a separate health insurance policy, often through an employer. Medicare works with these policies to pay for covered expenses. This may complicate payments, but there are clear guidelines for which policy pays first. Read on to learn more.
Primary vs. Secondary Payer
If you have multiple insurance policies with overlapping coverage, one insurance company becomes the primary payer, and the other is the secondary payer. The healthcare facility will bill both insurance companies when you visit the doctor or have a covered medical procedure. Your primary insurance will pay its share, then the remainder is sent to your secondary coverage. That does not necessarily mean the whole bill will be handled, so be prepared to pay your typical deductibles, copayments, and coinsurance.
Medicare may be your primary insurance, or it might not. This depends on how Medicare coordinates with your other type of insurance. If, for example, you are 65 or older and have group health insurance through a current employer or your spouse’s employer, Medicare may pay first if the company has fewer than 20 employees. The group health plan pays first if the employer has 20 or more employees or is part of a multi-employer group health plan and at least one other employer has 20 or more employees.
How Medicare Coordinates with Your Other Insurance
Medicare is relatively straightforward with its coverage. You can use the Medicare.gov website to search for the item, test, or service you’ve been prescribed and determine whether it is covered. Medicare will let you know how much you can anticipate for expenses, too, often as a percentage of the Medicare-approved amount. When you know which part of Medicare covers the service, you should have a good idea of how much Medicare will pay.
Take that Medicare coverage and match it up with your other insurance coverage. Suppose Medicare first pays 80% of the Medicare-approved amount for a Part B service (say, a doctor visit). In that case, the remaining expense is passed on to your secondary insurance. You should be left with less than 20% of the costs once both insurance companies have paid their share.
Conditional Payments
What happens if your other insurance does not pay what they’re supposed to cover for your care? Medicare can make a conditional payment for covered expenses, paying the cost so a beneficiary does not have to pay out of pocket. They still intend to be repaid, so if you later receive a settlement, you must pass that on to Medicare.
Have Questions About Medicare Coverage? We Can Help
Having great coverage is the way to lower your costs for medical care. Speak to an agent with Magellan Healthcare to review your Medicare plan options and find the right policy for you.
