The Medicare Secondary Payer Issue
Robert is 68 years old and enrolled in Medicare Parts A and B. He continues to work full-time for a company with 25 employees and is covered under the group health plan (GHP) as an active employee. He also has End-Stage Renal Disease (ESRD) and receives dialysis. His wife, Linda, is 64 and covered under his GHP. Robert was injured in a car accident caused by another driver, and his medical expenses are $50,000. The other driver's auto insurance has a $20,000 medical payments coverage limit. Robert's GHP has a $2,000 deductible and 20% coinsurance. Medicare has paid some of his claims, but now the GHP is denying coverage, stating that Medicare should be primary because of his ESRD. The auto insurer has paid $20,000.
1. Determine the order of payment among the GHP, Medicare, and the auto insurance.
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Under Medicare Secondary Payer (MSP) rules, when a person has ESRD and group health plan coverage through their own current employment (or spouse's current employment) at an employer with 20 or more employees, the GHP is primary for the first 30 months of ESRD-based Medicare eligibility. After 30 months, Medicare becomes primary. Robert is an active employee at a company with 25 employees, so the GHP is primary for the first 30 months of his ESRD Medicare coverage. However, if Robert's ESRD Medicare began more than 30 months ago, Medicare would be primary. The problem does not specify when his ESRD Medicare started. Assuming it's within 30 months, GHP is primary. The auto insurance is a liability insurance, and under MSP, liability insurance is primary to Medicare. Medicare does not pay for services covered by liability insurance. The auto insurance pays first, up to its limit. Then the GHP pays next, as it is primary to Medicare for ESRD within 30 months. Medicare pays last. So order: auto insurance ($20,000), then GHP (up to its limits), then Medicare. If the 30-month period has passed, then Medicare would be primary to GHP, but auto insurance still first.
2. What is Linda's coverage situation? Is she eligible for Medicare?
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Linda is 64, so she is not yet eligible for Medicare based on age. She may be eligible for Medicare if she has ESRD or ALS, but no info. She is covered under Robert's GHP as a spouse. Since Robert is an active employee, Linda's GHP coverage is primary. She is not eligible for Medicare until age 65 unless disabled or ESRD. So her GHP is primary. If she had Medicare, MSP rules would apply based on Robert's employment.