Medicare is a federal health care program which provides medical benefits to adults 65 years of age or older. It also provides medical care for those under 65 who are on disability. Medicare is an entitlement program that is paid for by individuals through Social Security contributions.
On the other hand, there is workers’ compensation. Workers’ compensation is a program provided by employers which provides benefits for those injured on the job. It consists of a series of law which outline the various benefits available to injured employees, and the laws vary from state to state. By law, every business must have some sort of workers’ compensation in place. Failure to provide workers’ comp benefits could result in fines, civil liability, or even criminal prosecution for the employer.
In some cases, an older adult is able to receive both kinds of benefits for an injury. With both of these options available, what happens when an older adult is injured on the job and eligible for both Medicare and workers’ compensation?
When an individual is eligible to have both Medicare and workers’ compensation provide medical benefits, something called “coordination of benefit” rules come into play. These rules decide which insurance will be the primary payer, and which insurance will serve as the secondary payer. The insurance that pays first, known as the “primary payer,” will pay up to the limit of its coverage. The secondary payer, who pays second, will only pay if there are costs the primary insurer did not cover. The secondary payer may not pay all of the uncovered costs.
So, when an injured worker is eligible for workers’ compensation and Medicare, workers’ compensation will be considered the primary payer for medical expenses in relation to employment related injuries. Medicare would serve as the secondary payer, meaning that Medicare would not be paying for items that the workers’ compensation benefits initially covered. However, Medicare would make conditional payments for when workers’ compensation denies payment of medical bills. In addition, Medicare might cover parts of medical bills not covered by workers’ compensation when an injury is only partially covered by workers’ comp.
It is also important to note that Medicare may also affect the settlement of a workers’ compensation claim. This is because the settlement may need to provide funds to be set aside for future services related to your claim, in addition to repaying Medicare for any payments made for services related to your claim. The set-aside funds would have been covered by Medicare in a Workers’ Compensation Medicare Set Aside Arrangement (WCMSA).
The money placed in the WCMSA fund has to be used to pay for medical expenses related to the injury until it runs out. Then, Medicare would cover any future expenses. The amount placed in a WCMSA fund varies depending on the case. A WCMSA fund is not required when a claim is resolved by a judgement or award of benefits. The fun is only necessary when a claim is settled.