Open Forum → Insurance, coordination of benefits...... does this seem right?

Ok, so here's the question: Coordination of benefits, how is it supposed to work?

I'm going to make up simple numbers just to illustrate how I thought it was supposed to work

Insurance A covers 50% of expense. Insurance B covers 50% of expense
$1000 expense submitted to "A", $500 paid out. rest of expense ($500/$1000) submitted to "B" which covers max of $500. so in the end, $1000/$1000 covered

What seems to be happening:

Insurance A determines that they're coverage is the $500, so pay out $500. yay, working as intended

insurance B now looks at expense submitted, determines $500 is the coverage, then notices that "A" already paid $500, so they say that total insurance was paid out, they owe nothing...

so I guess I'm wondering what the point of coordinating benefits if they're equivalent coverage?

Are they both private insurance?
Or is it a Medicare-Medicaid thing?

Are you in Canada or the USA, btw?

And is this medical insurance or something else?

In any event, answering from my personal knowledge of [medical] and [USA]:

The first example is the way it classically worked.

The second example is the way I've seen it work in some cases recently. Yes, it sucks.

In which case Insurance Company B is almost taking your premiums under false pretenses. They are happy to receive money, but will never end up having to pay anything out.

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But it really depends on the specific policy language of the secondary policy. You need to examine the policy. Do you have an insurance broker by the way?

And my comments assume that both coverages are commercial, not Medicare/Medicaid etc. That can bring in a whole new wrinkle.

well, profile does mention location (regina, sk) so canada

both insurance are private, corporately provided insurance.

Generally, they are not additive like that. You'd need to look at your specific plans to be sure, but as an example, here is Delta Dental's explanation

»www.deltadentalins.com/i ··· age.html
" The primary plan pays its benefit as if there is no other insurance The secondary plan will act as a supplement to the primary plan with its payments limited to the lesser of its normal benefit or the patient’s out-of-pocket costs under the primary plan. "

Sometimes the secondary payer will cover the coinsurance and/or deductible.
If the secondary payer's allowed amount covers more than the primary, then it will reimburse the difference. But it will not reimburse the rest of the total charges or billed amount.

The second scenario is the typical one.

Agree with PX Eliezer1 back in the olden days supplemental insurance typically paid their portion of what ever was left after the primary paid.

Now a days to reduce cost during coordination of benefits supplemental insurance looks to see if the primary paid less than what is covered by the supplemental. Only then will you receive additional money from the insurance.

You really have to read the fine print in your policy.

/tom

As stated upstream, read both policies carefully

...It's called Non-Duplication of Benefits Provision, and I'm guessing your secondary policy has it.

Ok I have 2 insurances, and here is how it works for me anyways.

Using same numbers but the actual claim amounts sinces it's easier for me.

1000 submitted claim.

Insurance 1 pays 80% of the claim (up to their limit of "Reasonable cost" so sometimes even though a presciription is billed at 1000 it doesn't mean that's what THEY will pay out they generall use the "blue book of prescriptions" in Canada. But let's say for the arguemnt they paid the full 80%.

So they would pay 80%.

You sumbit the claim with the receipt submitted to the first companie that they paid and second insurance will then pay 80% of the balance owed, so 200$ left, they would pay 80% of the 200$.

Now this is only in SOME cases too, I have at time had the company pay the 200$ left over since it would be LESS then the total amount of the 80% they cover.

Again this is in Canada, and how I've had it work and I've had multiple insurance companies in my times.

I'm finding that my drug coverage works that way (A pays 80%, then B pays the other 20%), but dental is the other (A pays 80%, B coverage pays 80% minus what A paid = 0)

That doesn't sound right... If your wife has coverage and then you have coverage, if both pay the only nightmare is when you fill out the claims, if your dentist allows you to use your card (some take it and will file for you etc) then both insurances should be valid and paying pretty much with the same solution.

I'd contact the insurance company that "pays 0" to find out why they are not covering the other 20%.

Benefits less benefits probably

Primary insurance covers 80%...the secondary figures out how much they would have paid and subtracts the difference.
So if their benefits would have both paid 500 then the secondary wont pay.

Its one of the crappy secondary provisions.
Usually the only reason to keep both coverages is because of limits on one of policies, like 500 dollar limit on drugs

They're both provided by our work. It's just frustrating that it's changed. It used to cover everything