When Does Medicare Pay First?

Medicare is the largest health insurance provider in the U.S. Many Medicare beneficiaries may also have other types of health insurance, such as retiree health insurance benefits, military insurance, COBRA or other types of coverage in addition to their Medicare benefits.

When you have other types of insurance in addition to Medicare, who pays first? Read below to find out when Medicare pays first, when it serves as the secondary payer and how it works with military coverage and workplace health insurance.

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Medicare pays first when it serves as your primary payer

If you have Medicare as well as another type of insurance, your coverage is provided through a coordination of benefits. In some situations, Medicare will serve as your primary payer, which means Medicare pays first. Your other insurance coverage will then serve as your secondary payer.

In the following situations, Medicare acts as your primary payer:

  1. You are “dual-eligible” (entitled to both Medicare and Medicaid). Medicaid becomes the secondary payer after Medicare pays first.

  2. You are age 65 or older and are covered by a group health plan because you or your spouse is still working and the employer has fewer than 20 employees. The group health plan in this situation serves as the secondary payer.

  3. You are retired and entitled to Medicare, but you still receive health insurance from your former employer. The retiree coverage is the secondary payer if you enroll in Medicare, which will pay first for qualified services.

  4. You are disabled and have workplace coverage provided through an employer with fewer than 100 employees. The group health plan is your secondary payer after Medicare pays first for your health care costs.

  5. You have End-Stage Renal Disease (ESRD), are covered by a group health plan and have been entitled to Medicare for at least 30 months. The group health plan pays second, after Medicare.

  6. You have ESRD and COBRA insurance and have been eligible for Medicare for at least 30 months. COBRA is the secondary payer in this situation, and Medicare pays first for qualified services.

  7. You are 65 or over – or you are under 65 and have a disability other than ESRD – and are covered by either COBRA insurance or a retiree group health plan. COBRA or the retiree health plan (whichever one you have) is the secondary payer.  

Your other insurance pays first when Medicare is the secondary payer

Medicare serves as the secondary payer in the following situations:

  1. You are 65 or older and are covered by a group health plan because you or your spouse is still working and the employer has 20 or more employees. The group health plan is the primary payer, and Medicare pays second.

  2. You are disabled and covered by an employer-provided group health plan, and the employer has 100 or more employees. The group health plan is the primary payer.

  3. You have ESRD, you are enrolled in a group health plan and you have been eligible for Medicare for 30 months or fewer. The group health plan pays first for qualified services, and Medicare is the secondary payer.

  4. You have ESRD and COBRA insurance and have been eligible for Medicare for 30 months or fewer. COBRA pays first in this situation.

How does Medicare work with military insurance benefits?

If you are entitled to both Medicare and Veteran’s Administration benefits, Medicare pays for any Medicare-covered services or items. Your Veteran’s benefits will pay for any VA-authorized services or items that are not covered by Medicare.

Medicare and the VA generally do not work together to pay for the same service or item. You may use both types of insurance for your health care, but they will operate separately from each other.

TRICARE does work with Medicare. Active-duty military personnel who are enrolled in Medicare may use TRICARE as a primary payer, and then Medicare pays second as a secondary payer.

For inactive members of the military who are enrolled in Medicare, Medicare acts as the primary payer and TRICARE pays second, provided that the services or items are received in a military hospital or other approved federal provider.

Does Medicare pay first with workers’ compensation or liability insurance?

If you have been injured in an accident where liability insurance is involved and you are also entitled to Medicare benefits, the liability insurance provider pays first, and Medicare pays as the secondary payer.

If you are covered under workers’ compensation due to a job-related injury or illness and are entitled to Medicare benefits, the workers’ compensation insurance provider will be the primary payer. There typically is no secondary payer in such cases, but Medicare may make a payment in certain situations.

When does a Medicare Advantage plan pay first?

Medicare Advantage plans (Medicare Part C) offer the same benefits as those that are covered by Original Medicare (Medicare Part A and Part B). In situations where Medicare pays first before your other insurance providers, a Medicare Advantage plan would typically act as the primary payer and replace your Original Medicare coverage.

Some Medicare Advantage plans may also offer prescription drug coverage, vision, hearing, dental and other benefits not covered by Original Medicare.

Learn more about when Medicare pays first for your care and compare Medicare Advantage plan options that may be available where you live. To get started, speak with a licensed insurance agent by calling TTY Users: 711 24 hours a day, 7 days a week.