US payers & coverage types

In one line

The United States has no single payer and no single rulebook. It has a patchwork of coverage programmes, each with its own regulator, its own data obligations and its own claim behaviour — and the coverage type on the patient's card is the variable that drives everything downstream.

If you build systems or code claims for the US, learn the coverage taxonomy first. Almost every "why does this work here but not there?" question resolves to it.

Medicare

Federal, run by CMS, primarily for people aged 65 and over, and for certain younger people with disabilities or end-stage renal disease. It is organised in parts:

Part	Name	Covers
A	Hospital Insurance	Inpatient hospital care, skilled nursing facility care, hospice, home health
B	Medical Insurance	Physician services, outpatient care, durable medical equipment, preventive services
C	Medicare Advantage	A private plan that delivers Part A and Part B benefits (with limited exclusions such as hospice), usually bundling Part D
D	Prescription drug coverage	Outpatient drugs, and many recommended vaccines

"Original Medicare" means A and B administered directly by the government, usually paired with a standalone Part D plan and often a Medigap supplement. Medicare Advantage hands the same beneficiary to a private insurer under contract with CMS.

That A-and-B versus C distinction matters enormously in practice. Under Original Medicare your claim goes to a Medicare Administrative Contractor and prior authorization is rare. Under Medicare Advantage you are dealing with a commercial insurer's utilisation management, its network, and its own prior authorization rules — which is exactly why CMS-0057-F targets MA organizations.

Medicaid and CHIP

Medicaid is a joint federal and state programme covering certain low-income people, families and children, pregnant women, older adults and people with disabilities. "Joint" is the operative word: the federal government sets a floor and shares the cost, and each state runs its own programme with its own name, eligibility rules, benefit design and IT. There are effectively 50-plus Medicaid programmes.

CHIP — the Children's Health Insurance Program — is likewise joint federal-state, covering children and pregnant women in families that earn too much for Medicaid.

Both are delivered two ways: fee-for-service run by the state agency, and managed care delegated to contracted plans. The delivery model changes who you send the claim to, who holds the clinical data, and which of the CMS API obligations attach.

People eligible for both Medicare and Medicaid are dual eligibles — a small population with outsized cost and the messiest coordination-of-benefits logic you will meet.

ACA marketplace coverage

The Affordable Care Act created Health Insurance Marketplaces where individuals buy Qualified Health Plans (QHPs). Some states run their own exchange; the rest use the Federally-Facilitated Exchange at HealthCare.gov.

Marketplace plans are sorted into four metal categories — Bronze, Silver, Gold, Platinum — which describe how the enrollee and the plan split costs, and have nothing to do with quality of care. Income-based premium tax credits and cost-sharing reductions attach on top.

The FFE-versus-state-exchange split matters more than it looks: CMS interoperability rules reach QHP issuers on the FFEs, not QHPs on state-based exchanges.

Commercial and employer coverage

Most working-age Americans get coverage through an employer. Two structures sit behind that:

• Fully insured — the employer buys a policy; the insurer bears the risk and is regulated by the state insurance department.
• Self-funded — the employer bears the claims risk and hires an insurer or a third-party administrator to run the plan. These are governed federally under ERISA and largely sit outside state insurance regulation.

Both look identical on the member card and in the claim, and behave very differently when you need a coverage rule changed, an appeal escalated, or a data-sharing agreement signed.

Add the government-employer systems — TRICARE for the military community, the Veterans Health Administration, the Indian Health Service — plus workers' compensation and auto liability, and you have the working set.

Why coverage type drives the data

Coverage	Primary regulator	Subject to the CMS API rules?
Medicare Advantage	CMS	Yes
Medicaid / CHIP fee-for-service	CMS + the state	Yes
Medicaid / CHIP managed care	CMS + the state	Yes
QHP on a Federally-Facilitated Exchange	CMS	Yes
Original Medicare (A/B)	CMS	Not via these payer API rules
QHP on a state-based exchange	The state	No
Employer / commercial	State (fully insured) or federal ERISA (self-funded)	No

That table is the single most useful thing on this page. It explains why a patient can pull their claims into an app from one plan and not from another, and it tells you which payers have a 2026 and 2027 compliance deadline and which are volunteering.

Coverage type also decides:

• The transaction set. Institutional claims ride an X12 837I, professional claims an 837P, pharmacy claims NCPDP. Eligibility is a 270/271, prior authorization a 278, remittance an 835. That plumbing is common — but each payer's companion guide, edits and payer ID differ.
• The code sets that get paid. ICD-10-CM everywhere for diagnosis; CPT and HCPCS Level II for professional and outpatient services; ICD-10-PCS for inpatient procedures. Medicare publishes national and local coverage determinations; commercial payers publish their own medical policies, and they do not agree.
• Where the money actually comes from. Fee-for-service, capitation, DRG-based inpatient payment, and value-based arrangements all coexist, sometimes for the same provider on the same day.

The habit to build

When you pick up any US requirement — a claim edit, an API scope, a prior authorization workflow, a consent question — your first question is which coverage, and who regulates it? The answer tells you which rule applies, which transaction to build, and whose companion guide to read. Skip that step and you will build something correct for one line of business and broken for the rest.