June 15, 2008
Which came first, the chicken or the egg?
This question has confused people for centuries. Some people feel that trying to figure out which of their health plans is primary, secondary, or payor of last resort is just as confusing.
by Joan Carr, Director of Revenue Management
Primary insurance is the plan that pays first, with some exceptions. If a family (father, mother, two children) has one parent that is employed and carries insurance, that plan is usually primary. If the family is a blended family, where the working parent is actually a step-parent, then the children may be covered under the natural parent's plan. If both parents are working and each parent carries his/her employer's plan as primary, then for the husband, his own insurance would be primary for him and his wife's insurance would be his secondary insurance. Likewise for the wife, her own insurance would be primary for her and her husband's insurance would be secondary for her.
Now, what about the children? For this example, we will assume this family is not a blended family. States have differing ways of determining this:
- Some states consider the oldest parent's insurance to be primary.
- Some states use the parents' birth month and date to determine which comes first in the calendar year. That parent's insurance is then primary.
- In Alaska the determination is as follows:
- First, birth months are compared: If one parent was born in January and the other parent was born in July, the parent born in January would carry the primary insurance, even if that was the younger parent. If both parents happen to be born in the same month, the determination would then default to the birth date.
- Second, the dates within the month are compared: the birthdate that occurs earliest in the month would be the one assigned to the primary insurance. If the birth dates are the same, the default would be to the year of birth, the earlier year identify the parent with the primary insurance.
Remember, there are situations when other insurance may be primary. For example, in a motor vehicle accident (MVA), auto insurance with medical benefits would become the primary coverage. If there is no medical benefit, then, depending on the state regulations, your medical benefits or the other person's auto insurance may become primary. Similarly, your home owners' insurance could become the primary insurance to someone who had a fall at your house. If you had a fall at your own house, home owners' insurance usually will not pay unless you have coverage for specific situations. Check with your agent on this.
Tertiary insurance pays after primary and secondary insurances have made their respective determinations. "Payor of last resort" insurance is the plan that pays last regardless of other coverage. Indian Health Services is a payor of last resort, but you need to remember two things:
Not all providers are IHS providers and therefore those that do not participate are not required to accept this insurance as payment in full.
Indian Health Services does not cover some services: dental and pharmacy are two areas that are frequently misunderstood. There are some dental services that are not covered and some medications that are not covered. If you are an IHS beneficiary, it is to your benefit to ensure you know the coverage information about any service you will be receiving.
Medicaid is the state's insurance plan for non-insured and under-insured people. If you are eligible or believe you might be, now is the time to enroll in Medicaid. The state processing can take a couple of months so it is best to do it before you have an emergency. Medicaid gives you the possibility of additional options in choosing your healthcare provider and usually has additional coverage benefits. If you are interested in learning more about the Medicaid enrollment process and eligibility requirements, please call YKHC's Registration Office. In all cases, it is very important to ensure that you have all of your insurance information with you when you register or are admitted.
Now comes the interesting part-the coverage you have under each plan. Not all insurance plans contain the same coverage nor do they contain the same coverage limits. For example, Plan A includes a maternity benefit for $5,600 as a global fee (one payment for everything) Plan B includes a maternity benefit that pays $100 for each doctor visit and $4,200 for the delivery. The one piece of information you do not have here is whether your provider participates in these plans. If not, there may be additional charges you would end up paying if the charges went above these rates. It is also possible that an insurance plan does not have a maternity benefit at all. If the primary insurance plan did not have the maternity benefit, then the secondary plan should reimburse, but only up to its coverage limits. In this last example, the secondary may even have a deductible that would have to be met first. This would be an out-of-pocket expense for the patient. Your employer's benefit department can be a good resource to help you figure all of this out, as can your insurance companies.
In looking at your own plans, you might feel that answering the chicken vs. egg question is much easier, but keep at it, you will figure it out!