Having more than one insurance for health care can make a big difference in the out-of-pocket costs you are responsible for. The insurance company that pays first is determined by the “coordination of benefits.”
Medicaid
Medicare will always pay first for covered services before Medicaid.
Employer Coverage
If you or your spouse are employed and have group health plan coverage, Medicare will pay first for companies with fewer than 20 employees, unless the company has a multi-employer plan and one of the employers has more than 20 employees. The group health plan pays first for employers of more than 20 employees.
If you get services outside of the plan’s network, it is possible that none of the insurance companies will pay. Consult your plan before going outside of the network.
If you do not accept employer coverage, your Medicare will still cover Medicare-covered services as usual. If you drop employer coverage, Medicare will pay first unless you are covered by your spouse’s employer coverage and their employer has at least 20 employees.
Retiree
Once you retire, your employer may offer retiree coverage which has altered benefits or premiums compared to when you were working. This is managed by your employer or union. Generally, as soon as you are eligible for Medicare, you should sign up for full benefits from both plans. Retiree coverage may not cover you for any period you were eligible for Medicare but were not signed up. Retiree coverage can be similar to Medigap (Medicare Supplement) plans in that they both help to fill gaps in coverage.
If you are 65 or older, retired, and covered by your spouse’s current employer coverage, Medicare will pay secondary to the group health plan unless the employer has fewer than 20 employees (or is in a multi-employer plan and one employer has 20 or more employees).
If you are under 65, disabled, retired, and receive coverage from a former employer, Medicare will pay first. If you fit these same conditions but receive coverage from your spouse’s employer, the group health plan will pay first unless the employer has fewer than 100 employees.
Group Health Plans for the Disabled
With large group health plans, no plan member can be treated differently because of disability or having Medicare. If you are under 65, disabled, and receiving coverage through your or your spouse’s employer, the large group health plan of 100 or more employees will pay first before Medicare. With employers of fewer than 100 employees, Medicare will pay first, unless the employer is in a multiemployer health plan and one of the employers has 100 or more employees.
If you have End-Stage Renal Disease (ESRD) and have group health coverage for people with ESRD, your group health plan pays first and Medicare pays second during the first 30 months. After this 30-month “coordination period” Medicare will pay first.
Indian Health Services
Medicare pays first before the IHS. If you have employer health coverage with 20 or more employees, the plan will pay first before Medicare. Medicare will pay first if you have a group health plan through tribal self-insurance.
No-Fault or Liability Insurance
No-fault insurance or liability insurance will pay first before Medicare. If the insurance refuses to pay for medical coverage, Medicare may make a conditional payment, expecting to be paid back later if you receive a settlement, judgment, award, or other payment.
If you have questions about how Medicare works with other insurance plans, contact Cornerstone Senior Advisors today.