Understand what secondary insurance is, how it applies to Medicare, and if it will cover deductibles and coinsurance for your Medicare costs.
Understanding your Medicare costs can be confusing when there are two or more insurance policies interacting with one another. Read on to learn:
Coordination of benefits (COB) allows multiple insurance policies that work with Medicare to figure out their financial responsibilities. Each insurance program is assigned a status, such as primary or secondary payer. This status determines the order in which the plan pays and in which order. This policy ensures that your claims are paid without paying more than 100% of the claim. Medicare law determines who is the primary and secondary payers are in any claim:
There are multiple types of secondary insurance policies that may interact with Medicare. You can use this guide to determine how your insurance will interact with Medicare.
It’s important for you to speak to your employer about how your or your spouse’s policy is set up if you qualify for Medicare to ensure that you understand how claims are paid when you receive services.
Yes. Medicare Supplement (Medigap) plans are a type of secondary insurance if you have Original Medicare, or Parts A and B.
Medicare supplements fill the gaps when it comes to Medicare. There are two instances where a Medicare supplement will serve as the primary insurance when you have Medicare:
Understand your total estimated out-of-pocket costs before choosing a Medicare supplement. Medicare supplements have an additional cost besides Original Medicare. If you use the doctor or hospital infrequently, you may pay monthly premiums that exceed how much the Medigap plan covers in services. Assess your risk tolerance to see if other options are available and a good fit, such as a Medicare Advantage Plan.
Here is an example of how having two insurance plans may work with Medicare and a Medicare Supplement plan:
You have an inpatient hospitalization that costs $10,000. Medicare Part A has a deductible of $1,556. Medicare pays the balance above the deductible and then sends the bill to your Medicare supplement company, which pays the deductible for you as it falls under your policy’s coverage. You will not receive a bill from Medicare, your Medicare supplement insurance company, or the hospital, as the cost was met 100%.
If, for some reason, you had services that were not covered under Part A or Medicare, you would be responsible for your portion of any of the additional charges.
The primary insurance will pay its share of your health costs first. After the primary insurance benefits are exhausted, the secondary insurance receives the remainder of the bill. The secondary insurance is then responsible for paying up to 100% of the remaining costs, provided it’s covered under the plan.
Yes. Situations exist in which Medicare may be a secondary payer. These situations include:
Medicare offers a quick guide for the most common situations where you may have a question about who is the primary payer. If you have questions about Medicare’s coordination with other insurances, call the Benefits Coordination & Recovery Center at (855) 798-2627. You will also want to make sure you tell your providers about any changes or additional coverages you may have when you get services.
Once the coordination of benefits process is complete and both insurance policies pay their share, you may have a balance left over. Your doctor should then send you a bill and you will be responsible for the remaining balance.
Travis Price is a licensed independent health insurance agent specializing in Medicare private insurance programs, including Medicare Advantage and Part D drug plans. Price has been in the Medicare industry since 2004, first in South Carolina and now in the Traverse City, Michigan, area.
He earned a bachelor’s degree in business management and accounting from Baker College. Price has worked with hundreds of Medicare-eligible beneficiaries to ensure they get the best plan to fit their medical needs without forcing them to pay for coverage that is unnecessary, saving them hundreds of dollars per year in health insurance costs.
Price supports his clients as an advocate, informing Medicare beneficiaries of their options and answering questions. He’s an active Medicare and insurance contributor on LinkedIn, Quora, and YouTube.
Travis Price is a licensed independent health insurance agent specializing in Medicare private insurance programs, including Medicare Advantage and Part D drug plans. Price has been in the Medicare industry since 2004, first in South Carolina and now in the Traverse City, Michigan, area.
He earned a bachelor’s degree in business management and accounting from Baker College. Price has worked with hundreds of Medicare-eligible beneficiaries to ensure they get the best plan to fit their medical needs without forcing them to pay for coverage that is unnecessary, saving them hundreds of dollars per year in health insurance costs.
Price supports his clients as an advocate, informing Medicare beneficiaries of their options and answering questions. He’s an active Medicare and insurance contributor on LinkedIn, Quora, and YouTube.
