Medicare Coordination of Benefits
Coordination of benefits determines who pays first for your health care costs. This comes into play if you have insurance plans in addition to Medicare. For example, your other health insurance, through an employer or other source, may have to pay for a portion of your care before Medicare kicks in.
How Does Medicare Work with Other Insurance?
If you have Medicare and some other type of health insurance, each plan is called a payer. Coordination of benefits (COB) sets the rules for which one pays first when you receive health care.
- The insurer that pays first is called the primary payer. It pays the costs up to the limit of your coverage under that plan.
- The insurer that pays second is called the secondary payer. It only pays if there are costs the primary payer didn’t cover.
- The secondary payer may not pay all the uncovered costs, meaning you may face out-of-pocket costs.
- If you have health insurance through an employer, you may have to enroll in Medicare Part B before your private insurance will pay its share.
In some cases, Medicare may be the primary payer. But in other cases, your other insurance may be the primary payer.
- When Medicare Pays First
- If you have retiree insurance from your former job.
- If you’re 65 or older, have group health coverage through your or your spouse’s current job and that employer has fewer than 20 employees.
- If you’re 65 and disabled, have group coverage through your or a family member’s current job and the employer has fewer than 100 employees.
- You have coverage through the Health Insurance Marketplace, age into Medicare, but keep your Marketplace plan.
- You are dual enrolled in Medicare and Medicaid or TRICARE. These federal insurance plans only pay after Medicare, employer plans and Medicare Supplement plans (Medigap) have already paid.
- When Medicare Pays Second
- If you’re 65 or older, have health insurance through your or your spouse’s current job and the employer has 20 or more employees.
- If you’re under 65 and disabled, have health coverage through your or a family member’s current job and the employer has 100 or more employees.
- If no-fault or liability insurance, including auto insurance, covers health care costs (such as from an auto accident).
- You are receiving black lung benefits that cover health care costs.
- You are receiving workers comp benefits that cover health care costs.
Coordination of Benefits Process
Coordination of benefits allows insurers to know what their responsibilities are when it comes time to pay for your health care services.
The insurers know when they have to pay and what their share of payment will be if you are covered by more than one health care plan.
- Ensures Claims Are Paid Correctly
- The COB process identifies what Medicare benefits are available to you. From there, it can coordinate the payment process for your health care claims. This ensures that the primary payer — whether it’s Medicare or other insurance — pays first.
- Shares Medicare Eligibility Data
- The process ensures that this data gets to your other insurers. It also lets them know how much Medicare paid toward the claim and what their share is if they are the secondary payer.
- Prevents Duplicate Payments
- The process makes sure that Medicare and other payers do not exceed 100 percent of the claim.
- Coordinates Part D Drug Benefits
- It determines the correct primary payer and makes sure pharmacy claims are sent to each insurer in the proper order. It also exchanges your drug coverage information between insurers and prescription drug assistance programs in which you are enrolled so they can coordinate their share of payments.
What Happens If Your Health Coverage Changes?
If your health coverage changes, your insurers have to report it to Medicare. But it can take a long time to be posted to Medicare’s records in some cases.
To avoid problems, you should call the Benefits Coordination & Recovery Center (BCRC) toll-free at 1-855-798-2627 (TTY users: 1-855-797-2627) as soon as your health coverage changes.
- Your name
- The name and address of your health insurance plan
- Your policy number
- The date your coverage changed, was added or stopped and why
You should also let your doctor and other health care providers you use know that your coverage has changed.
Finally, call your insurer and make sure they reported the changes to Medicare so that your records are up to date and there won’t be problems with your claims.
Employers and unions often offer health insurance to employees or retirees. If you already have Medicare and are offered group coverage through your employer or union, you can choose whether you want to pay for it or reject the coverage.
If you choose to take it, or are insured through your spouse’s employer’s plan, the insurer will coordinate with Medicare to pay part of your health care costs.
If you are dual enrolled in both Medicare and Medicaid, Medicare will always pay first on any health care claim. In rare cases where you might have another insurance plan, that plan would also pay before Medicaid kicks in.
If you qualify for both Medicare and Veterans’ benefits, you can receive treatment through either federal program. But each time you receive health care or go to the doctor, you have to choose which program — Medicare or VA benefits — will pay for the service or visit. You cannot have both pay for the same service and Medicare will never be the secondary payer for a service provided under Veterans’ benefits.
You should also remember that to have the VA pay for medical services, you must go to a VA hospital or other facility or have the VA approve medical services in a non-VA hospital or other facility.
Visit Medicare.gov to view or print out publications such as “Who Pays First?” that explains more about coordination of benefits. You can also call 1-800-MEDICARE (TTY users: 1-8770486-2048) to see if Medicare will mail a copy to you.
Or contact your State Health Insurance Assistance Program (SHIP) for free, personalized health insurance counseling and related help. You can find your state’s SHIP phone number at shiptacenter.org.
5 Cited Research Articles
- U.S. Centers for Medicare & Medicaid Services. (2020, June 30). Coordination of Benefits. Retrieved from https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Coordination-of-Benefits/Coordination-of-Benefits
- U.S. Centers for Medicare & Medicaid Services. (2019, June). Coordination of Benefits. Retrieved from https://www.medicare.gov/Pubs/pdf/11546-coordination-of-benefits.pdf
- U.S. Centers for Medicare & Medicaid Services. (2019, January 28). Coordinating Prescription Drug Benefits. Retrieved from https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Prescription-Drug-Assistance-Programs/Coordinating-Prescription-Drug-Benefits/Coordinating-Prescription-Drug-Benefits-Page
- U.S. Centers for Medicare & Medicaid Services. (2018, December). Your Guide to Who Pays First. Retrieved from https://www.medicare.gov/Pubs/pdf/02179-medicare-coordination-benefits-payer.pdf
- U.S. Centers for Medicare & Medicaid Services. (n.d.). How Medicare Works With Other Insurance. Retrieved from https://www.medicare.gov/supplements-other-insurance/how-medicare-works-with-other-insurance