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Medicare-Related COB Savings
Another common situation that produces amounts included by
insurance companies in COB savings involves retired employees and
their spouses who are over 65 years of age and who are covered
under insurance plans issued by health insurance companies and
who also are covered under Medicare. Prior to and throughout the
years in issue, language was included in Blue Cross’ health
insurance plans that excluded from coverage (and from liability)
those medical expenses and claims that were covered “under the
Workers' Compensation law, or any other present or future laws
enacted by the Legislature of any state, or by the Congress of
the United States [such as Medicare].”
Under typical COB provisions, the difference between what
health insurance companies would be liable to pay for medical
expenses in the event there was no Medicare coverage and the
lesser amount the companies actually are liable for and pay after
taking into account payments to be made by Medicare are referred
to and represent “Medicare-related COB savings”.
For 1989, Blue Cross calculated a total of $243,646,504 in
total COB savings. Approximately 85 percent of the $243,646,504
reflects Medicare-related COB savings, which, as indicated, were
excluded from coverage under Blue Cross’ health insurance plans.
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Last modified: May 25, 2011