The Medicare system is designed to ensure that Medicare doesn’t use taxpayer dollars to pay claims that are covered by other insurance. However, the process also ensures that your medical bills are paid on time without you having to submit mountains of paperwork or take any other action. It doesn’t work perfectly every single time, and in some situations, you may need to fill out some claim forms. But overall, the coordination of benefits system is a very good.
Here’s how it works: Each type of insurance you have, Medicare included, is known as a payer. If you have more than one payer, let’s say you continue to work past 65 with an employer with more than 20 full-time employees, Medicare’s coordination of benefits rules determine which payer pays first (or second or third). So, when you go to a doctor or other provider, the bill is sent to the first payer — the primary payer — which pays what it owes. If that amount doesn’t fully meet the bill, the provider sends the remainder to the next payer (the secondary payer) and maybe even a third. Mostly, all you do is check the statements that each of these payers sends you and, once all the statements are in, pay for anything that’s not covered.
Once you leave your employment and secure both Medicare Parts A & B, plus a Medicare Supplement, coordination of benefits will no longer be a concern.
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