Coordination of Benefits 

Sometimes more is just more, not better.

It used to be that having more than one insurance policy meant that you did not have to pay out of pocket for your medical expenses. Insurance companies have implemented measures that make this a thing of the past. Each insurance company applies different rules determining which insurance is primary and which is secondary. (One hopes the new healthcare legislation deals with this monster by creating a global rule.)

* First scenario… Husband and wife coverage. Both parties work. Most of the time your insurance from your job is your primary insurance and your spouse’s policy is secondary. So with two overlapping insurance coverages, this means that there will be no out of pocket expenses, right? Wrong. The primary insurance will be filed first and if there is a co-payment, deductible, or co-insurance, that amount is the responsibility of the patient. This claim is then filed with the secondary insurance which then determines what is the allowed amount for the claim. Then any amount paid by the primary insurance is subtracted from the total allowed amount. Next, if there is any balance, then co-payments, deductibles or co-insurances are applied. You may be paying for two insurance policies, and still not receive any benefit from them. Always know your policies. If you are deciding whether or not to get a secondary insurance policy, make sure it will cover ALL OF THE BALANCE REMAINING AFTER THE PRIMARY INSURANCE PAYS. Otherwise it may not be worth the extra premiums.

* Second scenario… Husband and wife coverage. One party retires. When an individual retires and has had a working history, at 65 he is covered by Medicare. At this point, Medicare becomes primary for the retired husband, and if he has additional insurance from his previous job (that he retired from), this insurance becomes secondary. If his wife is still working, her job insurance is primary and Medicare through him is secondary.

So, are we thoroughly confused yet? Here’s more.

Once one of the insurances declares it is primary, GET IT IN WRITING. Insurance companies have been known to make a complete about-face 2 years down the road and demand refunds from the doctor’s office, who will then bill you! This is usually what has happened if you ever receive a bill that is more than a year old from a physician’s office.