When Is Medicare Primary Insurance?

In this article...
  • Coordination of benefits rules determine if Medicare is the primary insurance payer or secondary payer of medical claims when you also have other health insurance in addition to Medicare, such as through an employer, TRICARE, the VA or Medicaid.

Many retirees become eligible for Medicare or sign up for it even while they continue to carry health insurance from their own or their spouse’s employer or from other government insurance programs. This is perfectly acceptable. However, it does raise the question: Which insurer pays the medical bills first?

If you have Medicare and other health coverage, you need to understand when Medicare is your primary insurance, how it works with other insurance and what you need to do to make sure your coverage doesn’t lapse and you don’t miss out on important benefits.

What Is Coordination of Benefits?

When you have more than one form of health insurance, each insurance plan is known as a payer. When a beneficiary has more than one payer, they work together through rules known as coordination of benefits. The rules state which plan pays first.

What Are a Primary Payer and Secondary Payer?

If you have more than one health insurance plan, coordination of benefits determines which is the primary payer and which is secondary:

  • The insurance that pays first (primary payer) pays up to the limits of its coverage.

  • The one that pays second (secondary payer) only pays if there are costs the primary insurer didn't cover.

  • The secondary payer (which may be Medicare) may not pay all the uncovered costs.

  • If your group health plan or retiree health coverage is the secondary payer, you may need to enroll in Medicare Part B before your insurance will pay.

According to the Centers for Medicare & Medicaid Services (CMS), if the primary insurance company doesn't pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare. Medicare may make a conditional payment to pay the bill, and then later recover any payments the primary payer should've made.

When Is Medicare the Primary Payer?

Determining if Medicare is the primary payer depends on several things. Below are many, but not all, of the circumstances that may require coordination of benefits with Medicare.

You have Medicaid and Medicare:

  • Medicare pays first, and Medicaid pays second.

You are 65 or older and have group health plan coverage from your own or your spouse’s current employment:

  • If the employer has 20 or more employees, the group health plan pays first, and Medicare pays second.
  • If the employer has fewer than 20 employees and isn’t part of a multi-employer or multiple employer group health plan, Medicare pays first, and the group health plan pays second.

You belong to a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) plan through your employer and get services outside the employer plan’s network:

  • It’s possible that neither the plan nor Medicare will pay if you get care outside your employer plan’s network. Before you go outside the network, call your group health plan to find out if it will cover the service.

You are 65 or older, retired and have group health plan coverage from your spouse’s current employer:

  • If your spouse’s employer has 20 or more employees, your spouse’s plan pays first, and Medicare pays second.

You are under 65, disabled, retired and have group health plan coverage from your former employer:

  • Medicare pays first, and your group health plan (retiree) coverage pays second.

You are under 65, disabled, retired and have group health plan coverage based on a family member’s current employer:

  • If the employer has 100 or more employees, the large group health plan pays first, and Medicare pays second.
  • If the employer has less than 100 employees and isn’t part of a multi-employer or multiple employer group health plan, Medicare pays first, and the group health plan pays second.
  • If the employer is part of a multi-employer or multiple employer group health plan, the group health plan pays first, and Medicare pays second.

You have Medicare due to End-Stage Renal Disease (ESRD) and group health plan coverage (including a retirement plan):

  • When you’re eligible for or entitled to Medicare due to ESRD, during a coordination period of up to 30 months, the group health plan pays first, and Medicare pays second. After the coordination period, Medicare pays first, and the group health plan pays second. If you originally got Medicare due to your age or a disability other than ESRD, and your group health plan was your primary payer, then it still pays first when you become eligible because of ESRD.

You have group health plan coverage, got Medicare because you turned 65 or because of a disability (other than ESRD), and you now have ESRD: Whichever coverage paid first due to your age or non-ESRD disability still pays first when you become eligible for Medicare because of ESRD:

  • If you originally got Medicare due to your age or a disability (other than ESRD) and Medicare paid first, Medicare continues to pay first even when you become eligible for Medicare because of ESRD.
  • If you originally got Medicare due to your age or a disability (other than ESRD) and your group health plan paid first, it continues to pay first when you become eligible because of ESRD.

You have Medicare due to End-Stage Renal Disease (ESRD), and COBRA coverage:

  • When you’re eligible for or entitled to Medicare due to ESRD, during a coordination period of up to 30 months, COBRA pays first. Medicare pays second, to the extent COBRA coverage overlaps the first 30 months of Medicare eligibility or entitlement based on ESRD.

You are covered by the Indian Health Services (IHS) or an IHS provider:

  • If you have group health plan coverage through an employer who has 20 or more employees, the group health plan pays first, and Medicare pays second.
  • If you have group health plan coverage through an employer who has less than 20 employees, Medicare pays first, and the group health plan pays second.
  • If you have a group health plan through tribal self-insurance, Medicare pays first, and the group health plan pays second.

You have been in an accident where no-fault or liability insurance is involved:

  • No-fault insurance or liability insurance pays first, and Medicare pays second for services related to the accident or injury.

You are covered under workers’ compensation because of a job-related illness or injury involved:

  • Workers’ compensation pays first for services or items related to the workers’ compensation claim. Medicare may make a conditional payment – a payment that must be repaid to Medicare when a settlement, judgment, award or other payment is made.

You are a Veteran and have Veterans’ benefits:

  • Generally, Medicare and the VA don’t pay for the same service or items. Medicare pays for Medicare-covered services or items. Veterans’ Affairs pays for VA-authorized services or items.

You are covered under TRICARE:

  • For active-duty military enrolled in Medicare, TRICARE pays first for Medicare-covered services or items and Medicare pays second.
  • For inactive-duty military enrolled in Medicare, Medicare pays first, and TRICARE may pay second.
  • TRICARE pays first for services or items from a military hospital or any other federal provider.
  • For active-duty military enrolled in Medicare, TRICARE pays first for Medicare-covered services or items, and Medicare pays second.
  • For inactive-duty military enrolled in Medicare, Medicare pays first, and TRICARE may pay second.
  • TRICARE pays first for services or items from a military hospital or any other federal provider.

You have black lung disease and are covered under the Federal Black Lung Benefits Program:

  • The Federal Black Lung Benefits Program pays for services related to black lung. Medicare pays first for all other health care not related to black lung disease.

You have COBRA continuation coverage:

  • If you have Medicare because you’re 65 or over or because you have a disability other than End-Stage Renal Disease (ESRD), Medicare pays first.
  • If you have Medicare based on ESRD, COBRA pays first. Medicare pays second to the extent COBRA coverage overlaps the first 30 months of Medicare eligibility or entitlement based on ESRD.

How Does Medicare Know You Have Other Coverage?

Medicare doesn’t automatically know if you have other coverage. However, insurers must report to Medicare when they’re responsible for paying first on your medical claims.

CMS advises you to tell your doctor and other providers if you have health coverage in addition to Medicare. This will help them send your bills to the correct payer to avoid delays.

In some cases your health care provider, employer or insurer may ask you questions about your current coverage so they can report that information to Medicare. You can also report your coverage information by calling the Benefits Coordination & Recovery Center (BCRC) toll-free at 1-855-798-2627. TTY users can call 1-855-797-2627.

About the Author

David Levine is an award-winning writer and editor whose work has been featured in the New York Times, New York Daily News, Sports Illustrated, American Heritage, U.S. News & World Report and others.

David has covered health, health insurance and health policy topics – among many others – since 2017. He earned a Bachelor's Degree in English from the University of Rochester and currently lives in Albany, New York.

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