Medicare carve out coverage is an insurance program held within the Medicare insurance program that seeks to fill in the gap between what medical expenses are paid for by Medicare insurance and what the individual who is covered by the insurance would normally pay if he or she were deficient of Medicare insurance. IN other words, Medicare carve out coverage seals the cracks between what Medicare paid for the medical procedures performed and what they would have paid if the individual was not on Medicare. This type of carve out coverage may be helpful for employers who seek to save money on medical insurance because the employee will never pay more or less once he or she is on Medicare.
Medicare carve out coverage plans are used by employers to reserve the parity between saving money and the benefits they offer to their Medicare pre and post retirees. In most cases, having Medicare carve out coverage can decrease the amount of money employers spend on the health care benefits for their employees, which means the integrity of the employers’ benefits are upheld and the employees save money.
With Medicare carve out coverage, the employer or company computes or calculates what they would have paid for their employees’ medical treatments as the primary insurer. This includes the co-pay and deductible. Then, the company subtracts what they would have paid from the actually amount Medicare paid. The outcomes of the calculations must result in a positive number in order for the company to pay the difference. If the amount results in equal to or greater than the amount the employer or company would have paid, then nothing will be paid at all.