Alyssa Lane
When it comes to medical expenses, it's important to understand how your insurance works and whether you have additional coverage options. In the US, there are various insurance options, including Medicare and Medicaid, which can work alongside other insurance plans to cover medical costs. This is known as coordination of benefits, where the primary payer covers expenses up to their limit, and the remaining balance is sent to the secondary payer. This order ensures that individuals can receive financial assistance for medical costs beyond their primary insurance coverage. However, it is essential to note that different insurance plans have varying levels of coverage, and higher coverage typically results in higher monthly premiums.
| Characteristics | Values |
|---|---|
| Medicaid beneficiaries | Can have one or more additional sources of coverage for health care services |
| Third Party Liability (TPL) | Third parties (individuals, entities, insurers, or programs) have a legal obligation to pay part or all of the expenditures for medical assistance furnished under a Medicaid state plan |
| Coordination of Benefits (COB) | Determines Medicaid benefits when an enrollee has coverage through a third party that is liable to pay for health care services |
| Medicare | If you have Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" pays up to its limit, then sends the rest of the balance to the "secondary payer" |
| Primary applicant | Should be the household member who is the contract holder with the insurance company; must be at least 18 years old |
| Financial assistance | May be available when purchasing a health plan through Maryland Health Connection if employer coverage is considered unaffordable or does not meet basic standards |
| Health plan categories | Platinum, Gold, Silver, and Bronze plans cover different percentages of medical expenses to make it easier to compare plans |
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What You'll Learn
- Medicaid beneficiaries can have multiple sources of coverage
- Coordination of Benefits (COB) determines Medicaid benefits when enrollees have other coverage
- Third Party Liability (TPL) refers to the legal obligation of third parties to pay for Medicaid
- Primary and secondary payers: the primary payer pays up to its limit, then the rest is sent to the secondary payer
- If the secondary payer doesn't cover the remaining balance, you may be responsible for the costs
Medicaid beneficiaries can have multiple sources of coverage
Medicaid beneficiaries can indeed have multiple sources of coverage. In fact, in 2022, an estimated 19% of all Medicare beneficiaries (around 11.6 million people) had Medicaid as a source of supplemental coverage. These individuals are often referred to as "dual-eligible" or "partial duals" and they receive both Medicare and Medicaid benefits.
The two programs cover many of the same services, but Medicare is the "primary payer", meaning it pays first for the Medicare-covered services that are also covered by Medicaid. If there is a remaining balance after the "primary payer" has paid up to the limits of its coverage, the secondary payer will then pay up to the limits of its coverage. If there is still a balance remaining, the patient may be responsible for the remaining costs.
Medicare has four parts to its coverage:
- Part A – Hospital insurance and associated costs
- Part B – Medical insurance (physician services, lab and x-ray services, outpatient and other services)
- Part C – Medicare Advantage Plan (offered privately)
- Part D – Covers premiums, deductibles, and other cost-sharing for prescription drugs
Medicaid covers services that Medicare does not, including most types of long-term services and supports. Partial duals may qualify for cost-sharing benefits from Medicaid if they are disabled and working, and if their income is above the state's full Medicaid threshold but below 125% of the federal poverty level (FPL), or 200% FPL. There are several programs that support the payment of Part B premiums for individuals with low incomes, such as the Specified Low-Income Medicare Beneficiary (SLMB) program, the Qualified Disabled Working Individual (QDWI) program, and the Qualifying Individual (QI) program.
In most states, there are policies that limit Medicaid payment of Medicare cost-sharing so that the total payment does not exceed the Medicaid rate, which is typically lower than the Medicare rate. This means that providers in these states may be paid less to treat dual-eligible individuals, which can result in dual-eligible individuals having fewer primary care visits.
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Coordination of Benefits (COB) determines Medicaid benefits when enrollees have other coverage
Coordination of Benefits (COB) is a process that determines how multiple health insurance plans work together to pay an insurance claim for a single person. It clarifies which insurance plan is the primary payer and which is the secondary payer. The primary payer pays up to the limits of its coverage, after which the secondary payer covers the remaining balance within its coverage limits. This process helps to ensure proper claim processing and avoid duplicate or overpayments.
When an individual has Medicaid and other health insurance, COB rules determine the order in which the insurance plans will pay for covered services. The primary payer, which may be either Medicaid or the other insurance plan, is responsible for processing the claim first and paying its share of the coverage amount. The secondary payer then reviews the claim and pays the remaining balance within its coverage limits.
In determining the primary and secondary payers, several factors are considered. These include the type of coverage, such as whether it is continuation coverage like COBRA, or coverage from another plan like an employer-provided plan. Generally, the benefits of the plan covering an individual as a member or employee are given primary status, while continuation coverage is considered secondary. Other factors that can influence the determination of primary and secondary payers include age, the size of the company providing employer coverage, and other considerations outlined in the insurance policy.
For Medicaid beneficiaries, it is common to have one or more additional sources of coverage for healthcare services. States are required to identify and coordinate with these third parties to ensure they meet their legal obligation to pay claims before the Medicaid program pays for the care of an eligible individual. This coordination helps to ensure that Medicaid enrollees receive the maximum coverage from their multiple health plans while reducing their out-of-pocket costs.
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Third Party Liability (TPL) refers to the legal obligation of third parties to pay for Medicaid
In the context of Medicaid, third parties can include certain individuals, entities, insurers, or programs that are legally obligated to pay part or all of the expenditures for medical assistance provided under a Medicaid state plan. States are required to take all reasonable measures to identify potentially liable third parties and ascertain their legal liability to pay for care and services available under the Medicaid state plan. This includes processing claims accordingly and coordinating with the Medicaid enrollee to pursue other sources of coverage.
The contract between the state and the managed care plan, such as a Managed Care Organization (MCO), dictates the terms and conditions under which the plan assumes TPL responsibility. When TPL responsibilities are delegated to an MCO, third parties are required to treat the MCO as if it were the State Medicaid agency. This includes providing access to third-party eligibility and claims data, adhering to assignment of rights for payment, and refraining from denying payment of claims submitted by the MCO for procedural reasons.
The Centers for Medicare & Medicaid Services (CMS) oversees state compliance with federal Medicaid rules, including the implementation of TPL procedures and approval of state claims processing systems. CMS provides guidance and technical assistance to states to improve TPL avoidance and recovery activities.
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Primary and secondary payers: the primary payer pays up to its limit, then the rest is sent to the secondary payer
When an individual has Medicare and other health insurance, each type of coverage is called a "payer". The "primary payer" is responsible for paying up to the limits of its coverage. After this, the remaining balance is sent to the "secondary payer". If the secondary payer does not cover the remaining balance, the individual may be responsible for the remaining costs. This order of payment is called "coordination of benefits".
Medicare may be the primary or secondary payer, depending on the situation. For example, if an individual is entitled to Medicare and is covered under Workers' Compensation for a job-related illness or injury, Workers' Compensation pays primary for healthcare items or services related to those claims. On the other hand, if an individual is 65 or older and is covered by a group health plan (GHP) through their or their spouse's current employment, the GHP pays primary and Medicare pays secondary.
The Medicare Secondary Payer (MSP) provisions apply when Medicare is not the beneficiary's primary health insurance coverage. These provisions protect Medicare Trust Funds by ensuring that Medicare does not pay for items and services that certain health insurance or coverage is primarily responsible for paying.
It is important to note that if the insurance company does not pay the claim promptly (usually within 120 days), the doctor or provider may bill Medicare. In such cases, Medicare may make a conditional payment to cover the bill and then recover any payments that the primary payer should have made.
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If the secondary payer doesn't cover the remaining balance, you may be responsible for the costs
When you have more than one insurance policy, it is important to understand which insurance is considered the "primary payer" and which is the "secondary payer". The primary payer is responsible for paying up to the limits of its coverage, after which the remaining balance is sent to the secondary payer. This order of payment is known as "coordination of benefits".
If you have Medicare and another form of health insurance, such as a group health plan, retiree coverage, or Medicaid, each type of coverage is designated as either the primary or secondary payer. It is important to inform your doctor and other healthcare providers if you have coverage in addition to Medicare, so they can send your bills to the correct payer and avoid delays.
In some cases, the secondary payer may not cover the entire remaining balance after the primary payer has paid its portion. If the secondary payer does not cover the full remaining balance, you, as the patient, may be responsible for paying any costs that are not covered by either the primary or secondary payer. This means that you will need to pay the difference out of pocket.
It is worth noting that if the insurance company does not pay the claim promptly, usually within 120 days, your doctor or healthcare provider may bill Medicare. Medicare may make a conditional payment to cover the bill, and then recover any payments that the primary payer should have contributed. However, it is important to understand that you may need to enrol in specific parts of Medicare, such as Medicare Part B, for this to occur.
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Frequently asked questions
The "primary payer" pays up to the limits of its coverage, then sends the remaining balance to the "secondary payer". If the secondary payer doesn't cover the remaining balance, you may be responsible for the remaining costs.
COB refers to the activities involved in determining Medicaid benefits when an enrollee has coverage through an individual, entity, insurance, or program that is liable to pay for healthcare services.
TPL refers to the legal obligation of third parties (individuals, entities, insurers, or programs) to pay part or all of the expenditures for medical assistance furnished under a Medicaid state plan. By law, all other available third-party resources must meet their legal obligation to pay claims before the Medicaid program pays for the care of an individual eligible for Medicaid.
