How does Medicare work with other insurance coverage, such as a group health plan from a former employer or union? This is an important question because it determines whether your medical bills are paid correctly and on time.

Here is information from CMS (Centers for Medicare and Medicaid Services):

If you have Medicare and other insurance, always be sure to tell your doctor, hospital, and pharmacy. When there’s more than one insurance payer, certain rules determine which one pays first. This is what’s called “coordination of benefits.”

The “primary payer” pays what it owes on your bills first — and then sends the balance to the “secondary payer” to pay. In some cases, there may also be a third payer.

The primary payer pays up to the limits of its coverage. The secondary payer only pays if there are costs the primary insurer didn’t cover. But keep in mind that the secondary payer (which may be Medicare) may not pay all of the uncovered costs.

When Medicare is primary:

If your employer insurance is the secondary payer, you may need to enroll in Medicare Part B before that insurance will pay. (The Part B premium for most Americans in 2013 is $104.90 per month.) Here’s who pays first in various situations:

If you have retiree insurance (coverage from a former job), Medicare pays first.

Medicaid and TRICARE (the healthcare program for U.S. armed service members, retirees, and their families) never pay first for services that are covered by Medicare. They only pay after Medicare, employer plans, and/or Medicare Supplement Insurance (Medigap) have paid.

When Medicare is not Primary:

If you’re 65 or older, have group coverage based on your or your spouse’s current employment, and the employer has 20 or more workers, your group plan pays first. (If the company has fewer than 20 employees, Medicare pays first.)

Your group plan also pays first when you’re under 65 and disabled, have group coverage based on your or a family member’s current employment, and the employer has 100 or more employees. (Medicare pays first if the company has fewer than 100 employees.)

If you have Medicare because of end‑stage renal disease (permanent kidney failure), your group plan pays first for the first 30 months after you become eligible for Medicare. Medicare pays first after this 30‑month period.

Medicare may pay second if you’re in an accident or have a workers’ compensation case in which other insurance covers your injury or you’re suing another entity for medical expenses.

These types of insurance usually pay first for services related to each type:

·     No-fault insurance (including automobile insurance);

·     Liability (including automobile and self-insurance);

·     Black lung benefits;

·     Workers’ compensation.

For more information, visit www.medicare.gov/publications and read the booklet “Medicare and Other Health Benefits: Your Guide to Who Pays First.”

Social Security identifies 200 serious health conditions that receive Compassionate Allowances when people apply for Social Security disability benefits.    The Compassionate Allowances program fast-tracks disability decisions to ensure that Americans with the most serious disabilities receive their benefit decisions within days instead of months – or years.  These conditions primarily include certain cancers, adult brain disorders, and a number of rare disorders that affect children.

By definition, these conditions are so severe that Social Security does not need to fully develop the applicant’s work history to make a decision.  As a result, Social Security eliminated this part of the application process for people who have a condition on the list.

The full list of diseases and conditions that get fast-track disability decisions can be found here: http://www.socialsecurity.gov/compassionateallowances/conditions.htm

This is good news for people who have been newly diagnosed with one of the 200 seriously illnesses on the list. The bad news is that most of these people will have to wait 24 months before they get Medicare. In the meantime, if they have lost their health insurance because they can’t work, they are out of luck.  They could use COBRA for 18 months (or more) – if they can afford the high price that comes with paying the full cost of their employer health insurance.

When their COBRA runs out, they could take advantage the Health Insurance Portability and Accountability Act (HIPAA) which says people who have had health insurance without a break must be provided one or two coverage options by every health insurance company. This sounds awesome except that insurance companies are allowed to charge these people outrageous premiums. Insurance companies take the highest premium for the person’s age and triple it. The person with a pre-existing condition can take it or leave it.  Anyone above 50 years old will likely pay $1,000, $1,500, or more per month if they take a HIPAA policy.  This is very bad news for people who are too sick to work and cannot afford such outrageous premiums.

Of course, all this changes one year from now – and that is good news.

Happy New Year!  I read the bill the U.S. Senate passed on New Year’s eve, and it includes an extension of funding for the QI-1  program. The QI-1 program pays the Medicare Part B premium for people with monthly income below $1,277 (individual) or $1,723 (a married couple). (See more details at the bottom of this page.)

Anyone in Arizona who received a letter from AHCCCS saying they will have to pay the $104.90 Part B premium can breathe a sigh of relief…. and wait to see what the Republicans in the House of Representatives do with this bill.

We must wait and see if the House of Representatives will approve the bill which covers a very long list, including: the extension of unemployment benefits; extension of a long list of  individual tax deductions; extension of a long list of  business tax deductions;  continuation of tax credits for energy efficient homes, and tax credits for alternative energy production.

UPDATE 1/2/2013: The House of Representatives passed the bill, so QI-1 is approved for 2013.

Other Medicare-related issues included in the bill that interested me are:

Medicare physician payment update (Sec. 601):  Puts off the 27% cut to doctor fees. This has happened every year since 1997, which is why the “required” cut to doctor fees is 27% this year. It will be bigger next year – but these cuts will never be imposed because doctors would stop accepting Medicare patients.  Apparently this has something to do with making the Medicare budget forecast look better than it really is.

Extension of specialized Medicare Advantage plans for special needs individuals (Sec. 607): Extends chronic illness plans through 2014.  This is a pilot program that was supposed to end in December 2013.  The Medicare Payment Advisory Committee (MEDPAC) had advised against continuing funding for these plans.

Special needs Advantage plans get higher payments from Medicare than do standard plans. Chronic illness Advantage plans offer lower out-of-pocket costs for people with Diabetes, various heart conditions, and breathing illnesses such as COPD. People can enroll in these plans any time throughout the year if their health problems meet the chronic illness criteria.

Extension of funding outreach and assistance for low-income programs (Sec. 610):  Continues funding for Area Agencies on Aging that provide help to low-income seniors. The Pima Council on aging gets this funding to support their work.

*****Explanation of income levels and help they receive:*****

The QI-1 program is funded each year, and each state gets a certain amount of money. The state can run out of funds for this program at the end of the year, so people who apply for this help in November or December might be turned down. They should apply again in January when funding has been replenished.

The QI-1 program helps people whose income is below $1,277 (individual) or $1,723 (a married couple), but above $1,117 (individual) or $1,513 (couple).

SLMBs (Specified Low-Income Beneficiaries) are people with income between $931 and $1,117 (individual) and $1,513 (couple). The state must pay their Medicare Part B premium and there are no funding issues like those that come with the QI-1 program. $20 can be added to these figures when determining if a person qualifies for this help.

QMBs (Qualified Medicare Beneficiaries) have income blow $931 (individual) and $1,261 (couple). $20 can be added to these figures when determining if a person qualifies for this help. QMBs get help with their Part B premium and all the medical co-pays that come with Medicare.  In Arizona, QMBs are assigned an HMO health plan and they must use doctors in the plan’s network in order to get co-pays covered by AHCCCS (Arizona medicaid).

Assets: The state of Arizona, when considering an application for help through the Medicare Savings Program (QI-1, SLMB, and QMB), does not consider assets. Arizona only looks at income, so a person can have money in the bank, two houses, or multiple cars and still qualify for this help.