Coordination of Benefits
When you have multiple health insurance policies, coordination of benefits determines which insurer pays first and which pays second. This ensures that the total amount paid by both insurances does not exceed the cost of the medical expenses. Coordination of benefits applies when you have Medicare as your primary insurance and another insurance as your secondary or supplemental coverage.
- Primary insurance: Medicare is usually considered the primary insurance when you have it and another insurance policy. It pays for your medical expenses first.
- Secondary insurance: Your other insurance policy becomes the secondary insurance and pays for any remaining costs that Medicare did not cover, up to the limits of the policy.
- Supplemental insurance: Medicare supplement insurance, also known as Medigap, fills in the gaps in Medicare coverage. It pays for the deductibles, copayments, and coinsurance that Medicare does not cover.
Coordination of benefits becomes important when the primary insurance denies coverage for a claim. In that case, the secondary insurance policy may step up and cover the medical expenses.
It’s important to note that coordination of benefits rules vary by state and by insurance plan. To determine how your coverage works, you should check with your insurance provider.
| Scenario | Coordination of Benefits Example |
|---|---|
| Primary insurance covers 100% | Medicare is the primary insurance, so it covers the entire cost. |
| Primary insurance covers some costs, secondary insurance covers the rest | Medicare pays 80% of the cost, and the secondary insurance pays the remaining 20% up to their policy limit. |
| Primary insurance denies coverage | If Medicare denies coverage, your secondary insurance may step in to cover the expenses. |
Overall, coordination of benefits is a complex process that can help lower your out-of-pocket costs. By understanding how your insurance policies coordinate benefits, you can make informed decisions about your healthcare coverage.