Self-funded plan sponsors win big when Medicare pays secondary benefits first.
Self-insured plan sponsors love it when a Medicare eligible plan member presents their Medicare card at a hospital encounter and fails to inform the intake clerk they are covered through a group health insurance plan too.
Medicare pays the bill at 100% of Medicare. The member’s group plan would have paid more, much more. Sometimes five times more or even more than that.
According to CMS “Medicare makes this conditional payment so you will not have to use your own money to pay the bill.”
Medicare inevitably discovers their error and starts a recovery process to recoup their loss since the group plan was primary and should have paid first.
You would think Medicare would ask the hospital for their money back, but they don’t. Instead, the government goes after the group plan in order to be made whole again.
So the plan sponsor repays the government health plan back at 100% of Medicare but the hospital doesn’t know that. They’ve been paid, earning a profit at 100% of Medicare. The hospital is happy and life goes on. Next!
The plan sponsor is happy too. They saved a butt load of money. And the plan member is happy………..easy no hassle access to care, no balance billing, minor patient responsibility.
Why Medicare eligible employees enroll in their employer’s group plan when they have better coverage through their government plan is beyond me. Adding Medicare Part D and a low-cost supplement on top provides better coverage than group plan members can only dream about. The only problem is the waiting period of 40 years or more before coverage becomes effective. And the worst part about that is you’re paying for coverage during the entire waiting period for coverage you don’t have yet. Rather expensive “insurance” when you think about it. Maybe that’s why it’s so good? After all, you get what your pay for!
