Medicare’s Secondary Payer Rules
How it Affects You as a Participant
Volume CVII, No. 12December, 2007
Many of us may be approaching the age where we’re eligible to apply for Medicare. If you fall into this category, you may be wondering how this affects your health benefits if you’re already on the Local 802 Health Plan. Should you apply for Medicare if you already have coverage through the union? Will this affect your Medicare benefits?
The good news is that it’s O.K. to have double coverage. If you’re on the Local 802 Health Plan and you sign up for Medicare, the union’s health plan will stay your primary insurance. Medicare will become your secondary coverage.
What does this mean, exactly? If you have any expenses that aren’t covered by the Local 802 Health Plan, you can submit them to Medicare for consideration. Medicare may or may not pay these expenses, depending on what kind of claim we’re talking about.
When are you eligible to apply for Medicare? According to Title XVIII of the Social Security Act, you can apply for Medicare when you turn 65 or if you qualify under certain diseases such as end-stage renal failure, or if you become totally disabled.
PRIMARY VS. SECONDARY
The concept of “primary” and “secondary” health insurance coverage applies to people who are lucky enough to be covered under two health plans at the same time, like if you’re covered by both the Local 802 Health Plan and Medicare.
Most health plans contain some form of provision that deals with people who have double insurance coverage.
This is commonly known as a “coordination of benefits” provision. In the union’s case, the Local 802 Health Plan establishes an order for paying claims, helping reduce the possibility of a claim being paid twice.
Federal law requires that most employer-sponsored or union-sponsored health plans — like the Local 802 Health Plan — be the first to pay a claim that is submitted to the health plan and Medicare, even if the participant is eligible for Medicare benefits.
That’s what’s meant by saying that the Local 802 Health Plan is “primary” and Medicare is “secondary.”
You might be interested in knowing that in the past, Medicare used to be the primary payer for all Medicare services — except under workers’ comp circumstances — prior to 1980. After 1980, a series of amendments to the Social Security Act were enacted to make Medicare the secondary payer for services covered by an individual’s insurance and other group health plans like the Local 802 Health Plan. Logically, the amendments were enacted in order to safeguard the future of Medicare funding.
One more important thing. If you are considering whether to completely retire from music before age 65, you should be very careful to make sure that you have some kind of health insurance, because generally speaking, early retirees do not qualify for Medicare.
Medicare has certain rules that plans like the Local 802 Health Plan must follow.
The gist of these rules is that Local 802 cannot discriminate against you just because you are on Medicare. Also, the union cannot give you incentives to leave the Local 802 Health Plan so that Medicare will pick up your coverage.
At the beginning of this article, I mentioned that there are a few circumstances when you might be eligible for Medicare before turning 65. One is if you become totally disabled, and one is if you have end-stage renal disease. Both of these circumstances have special consequences for coverage; contact the Local 802 Health Plan for details.
In summary, at age 65 you become eligible for Medicare. As long as you qualify for coverage under the Local 802 Health Plan, the plan will normally be the primary payer of your health care benefits and Medicare will be secondary.
This means that after the Local 802 Health Plan pays benefits for your eligible expenses and other covered expenses, you may submit a claim to Medicare for any unpaid balances for consideration.
If you have any further questions about coordinating benefits between Medicare and the Local 802 Health Plan, contact the plan office at (212) 245-4802, ext. 179.
Gary Thayer, Esq. is counsel at Meyer, Suozzi, English and Klein, the firm that represents Local 802 and the Local 802 Health Plan.