Mellor v. Wasatch Crest: Coordination of Benefits Between Insurance and Medicaid

More about Mellor v. Wasatch Crest, 2009 UT 5, and its coordination of benefits discussion. About a year before his drowning accident, Hayden’s father’s employment terminated and Dad elected COBRA coverage for his family, including Hayden. The accident brought weeks of hospitalization and mounds of medical expenses. Hayden’s mother applied for Medicaid coverage and coverage was approved retroactively to two days before the accident. Mom continued to pay COBRA premiums for the insurance coverage. But when the insurer got wind that Hayden was on Medicaid, it argued that the terms of its policy made it secondary to Medicaid. Medicaid disagreed. The trial court ruled in favor of the insurer. That’s when I got involved in the case and appealed to the Utah Supreme Court.

The decision from that Court made short work of Wasatch Crest’s argument. Both the language of COBRA and the terms of the insurance policy made it clear that while the insurer may have been able to cut off its obligations to provide primary coverage for its insured if he began to collect Medicare, the same is not true of Medicaid. As between that needs based taxpayer funded benefits program and private insurance, the insurer will always be required to provide primary coverage.

Mellor v. Wasatch Crest makes clear that insurers of Medicaid eligible insureds are not able to shift the costs of medical care to taxpayers. That’s a good thing for the taxpayers.