Final answer:
The term 'secondary payer' is used when Medicare is not the primary insurance payer, and the beneficiary has other insurance coverage. Medicare coordinates with the primary insurance to cover any unpaid medical costs, after the primary insurance has paid on a claim.
Step-by-step explanation:
The term used when Medicare is not the primary payer and the beneficiary is covered under another insurance policy is the secondary payer. This situation occurs when a Medicare beneficiary has other health insurance coverage, such as a private policy, employer-provided health insurance, or coverage through a spouse. When Medicare is the secondary payer, the primary insurance pays first on a claim for health care services, and Medicare only pays if there are costs the primary insurer didn't cover. Beneficiaries typically have out-of-pocket expenses like copayments, deductibles, and coinsurance, which are costs shared between the policyholder and the insurance company.
Understanding the coordination of benefits is crucial for Medicare beneficiaries to ensure their healthcare services are paid for correctly to avoid unexpected medical expenses. To facilitate this process, Medicare has specific rules to determine when it will serve as a primary or secondary payer, which helps reduce the risk of moral hazard and adverse selection. Programs like Medicaid, the Patient Protection and Affordable Care Act (ACA or Obamacare), and other government-funded healthcare programs also have provisions dealing with the coordination of benefits.