Final answer:
Medicare typically plays the role of the secondary payer when an individual has another health insurance policy. The primary insurance pays first for healthcare costs, with Medicare covering remaining eligible expenses according to its program rules.
Step-by-step explanation:
When a person is covered by two health policies, and one of these is Medicare, Medicare will often act as the secondary payer. This means that the other insurance policy, known as the primary payer, pays first. Medicare then may pay costs that the primary insurance didn't cover, subject to its coverage rules and limits.
Medicare was established in 1965 to help citizens 65 and older, as well as younger people with certain disabilities, meet their medical care needs. It is a significant program, covering a considerable number of people and involves substantial government spending. In cases where beneficiaries have multiple health insurance coverages, coordination of benefits rules determine which insurer pays first.
As per the standard practices, the primary insurance plan, which could be through an employer or purchased individually, initially covers the eligible healthcare expenses. Once claims have been made to the primary insurance, Medicare steps in as the secondary payer to cover any remaining eligible costs. In situations where the primary insurance is through a current employer and the company has more than 20 employees, the employer's plan pays first. If the employer's plan doesn't cover all the costs, Medicare will pay its share of the Medicare-approved amounts for covered services.