Medicare and Other Health Insurance Coverage: Who Pays First?

Coordinating your benefits made simple

Updated on: March 29, 2019

Originally posted on: August 5, 2015
by
Express Scripts Medicare Advisor
Ms. Kyong specializes in personal finance issues for Medicare recipients. Topics include managing healthcare costs in retirement.

Having more than one source of healthcare coverage after you turn 65 is good. If you receive coverage from Medicare and Medicaid, an employer or other health plan, knowing which source will pay your expenses first can help you to understand and ensure that your benefits are coordinated.

Primary and Secondary Payers

  • The primary payer is the insurance that pays first and covers costs up to the limits of its coverage.
  • The secondary payer kicks in to pay for costs not covered by the primary payer. However, the secondary payer might not pay all costs.
  • If the secondary payer is your employer insurance, you might need to enroll in a Part B plan before your insurance pays the uncovered costs. 

Who Pays First

It depends — sometimes Medicare will pay first while other times the secondary payer will cover the initial costs. See some examples below to illustrate how Medicare rules help coordinate the benefits you receive from multiple plans.

If You Have Medicare and Medicaid

Medicare will always pay first. Medicaid coverage kicks in only after any other coverage, such as your employer’s plan, has paid.

If You Have Medicare and COBRA

If you have Medicare because you’re 65 or over or because you have a disability other than
end-stage renal disease, Medicare pays first. However, if you have end-stage renal disease, COBRA will pay first for the first 30 months. Thereafter, Medicare will pay first.

If You Have Medicare and Workers’ Compensation or Accident Claims

In these situations, Medicare essentially takes a “wait and see” approach. The insurance provider or workers’ compensation benefit assumes the primary payer role. However, Medicare may make conditional payments to the healthcare provider if the primary payer doesn’t pay the claims within 120 days.

If You Have Medicare and Veterans Affairs (VA) or TRICARE® Benefits 

Your veterans’ coverage will pay for services that have been authorized by the VA. TRICARE® will pay for services from military hospitals and other federal healthcare providers. If you’re on
in-active duty, Medicare will pay first for Medicare-covered services, and, if you are enrolled in TRICARE®, that plan will possibly act as a secondary payer.

If You Have Medicare and an Employer Group Health Plan

If either you or your spouse works and has an employer’s health plan, the answer to who pays first will depend on the size of the company that provides the employer’s health plan:

  • 20 or more employees: The employer’s health plan pays first, then Medicare.
  • Fewer than 20 employees: Medicare pays first, then the employer plan.

If you’re under 65 and have a disability, the answer will also depend on the size of the company:

  • 100 or more employees: The employer’s health plan pays first, then Medicare.
  • Fewer than 100 employees: Medicare pays first, then the employer plan.

Note: Employer coverage is different than retiree coverage. Employer coverage is the one you or your spouse receives from a current employer, while retiree coverage is the one you receive from a former employer. If you have retiree coverage, then Medicare will always pay first, and your retiree coverage will pay second.

Getting Coordinated When You Turn 65

Medicare eligibility begins three months before you turn 65. At that time, Medicare will send you a letter directing you to a website to fill out a questionnaire in which you will be asked about any coverage you may currently have. Based on the information you provide, Medicare will set up your coverage profile to make sure your claims are paid correctly.

Keep Your Doctors Up to Date

Be sure to let your doctors and other healthcare providers know when you become eligible for Medicare. This will help you keep your benefits coordinated and avoid any unnecessary delays in getting your claims processed.

For more details, check out the booklet “Medicare & Other Health Benefits: Your Guide to Who Pays First” from Medicare.gov.