Medicare and other insurance: who pays first

Many people reach 65 with health coverage they already like: a plan through work, a spouse's plan, retiree coverage from a former employer, COBRA, TRICARE, VA care, or Medicaid. The question that follows is the same every time: once Medicare starts, which one pays the bill? The answer decides whether you need Part B right away, whether a claim gets paid at all, and whether adding a Medicare drug plan could cost you the coverage you have now.

Medicare calls this coordination of benefits. Everything in this guide comes from the Centers for Medicare & Medicaid Services' booklet How Medicare Works with Other Insurance (CMS Product No. 02179, February 2026) and the "Who pays first?" pages on Medicare.gov, both listed at the end. CMS notes that its booklet does not cover every situation and is not a legal document, so for a case that does not fit the patterns below, the phone numbers in the last section are where to get a definite answer.

Primary and secondary: the basic idea

When you have Medicare and other coverage, each one is a "payer." The insurance that pays first, the primary payer, pays up to the limits of its coverage. The one that pays second, the secondary payer, only pays if there are costs the primary insurance did not cover and the secondary payer covers that service. CMS says the same rules apply whether you have Original Medicare, a Medicare Advantage Plan (with or without drug coverage), or a Medicare drug plan.

Being secondary does not mean paying the leftovers automatically. A secondary payer can still decline a service it does not cover, and you may owe whatever neither one pays. That is why the order matters: if a claim goes to the wrong payer first, it can be delayed or denied.

CMS lists the factors that decide the order:

• The type of coverage you have.
• Your age.
• Whether you are retired.
• Whether you have Medicare because of a disability or End-Stage Renal Disease (ESRD).

Medicare does not know about your other coverage on its own

CMS is direct about this: Medicare does not automatically know you have other coverage. Insurers must tell Medicare when they are responsible for paying first, and your doctor, employer or insurer may ask you questions so they can report it. If you are in a Medicare Advantage Plan or a Medicare drug plan, you are responsible for answering your plan's questions about other coverage.

CMS's example is Harry, who just turned 65 and still works for a company with 20 or more employees. His group health plan reports his coverage to Medicare so Medicare knows to pay his claims second. The practical step for everyone is the same: tell every doctor, hospital and pharmacy about all the coverage you have, so the bill goes to the right payer first.

Still working at 65: the 20-employee rule

This is the situation that confuses the most people. If you are 65 or older and have group health coverage based on your own or your spouse's current employment (self-employment counts), the size of the employer decides who pays first:

When the group plan is primary and does not pay the whole bill, your provider should send the bill to Medicare for secondary payment. You may still owe what neither covers. CMS adds a protection worth knowing: employers with 20 or more employees must offer employees 65 and older the same health benefits, under the same conditions, that they offer employees under 65, and the same goes for spouses if the employer covers spouses at all.

The small-employer row is the one with real money in it. If the employer has fewer than 20 employees, Medicare pays first, and the group plan only fills in behind it. Without Medicare in place, the primary payer is missing. Ask your benefits office in writing how the plan pays for people with Medicare before you decide to put off Part B.

Federal employees

CMS says Federal Employees Health Benefits (FEHB) coverage works the same way as other group health plans, and that FEHB plans pay first for current federal employees.

Out-of-network care while the employer plan is primary

If you are 65 or older, still working, and in an employer HMO or PPO that pays first, CMS warns that care outside the plan's network may be paid by neither the plan nor Medicare. Call the plan before you go out of network.

If you turn down the employer's plan

Medicare pays its share of covered services even if you do not take your or your spouse's employer coverage. But CMS cautions that if you decline employer coverage when it is first offered, you might not get another chance, and if you drop it later you may not be able to get it back. You might also be denied retiree coverage later if you were not in the plan while working. Talk to the benefits administrator before deciding.

Retiree coverage from a former employer

Once you are 65 or older and retired, the order flips: Medicare pays first and your (or your spouse's) retiree plan pays second. This is where people get hurt by waiting. Medicare.gov warns that retiree coverage might not pay your medical costs during any period when you were eligible for Medicare but did not sign up, and that you may need both Part A and Part B to get full benefits from the retiree plan.

CMS also lists what retiree coverage does not promise:

• Employers and unions are not required to offer retiree coverage at all.
• They can change benefits or premiums, or cancel the coverage, at any time.
• Some offer only limited coverage, such as "stop loss" coverage that starts paying only when your out-of-pocket costs reach a set amount.
• A plan you keep after retiring may have different rules and may not work with Medicare the way it did while you were working.

If you are not sure how your plan pays with Medicare, CMS suggests getting the plan's benefit materials or the summary plan description, and calling the former employer's benefits administrator.

COBRA is not a reason to delay Part B

COBRA is the federal law that may let you temporarily keep employer or union coverage after your job ends, or after you lose coverage as a dependent. CMS calls it continuation coverage. In general it applies to employers with 20 or more employees, though some states require insurers of smaller employers to offer something similar.

If you have Medicare because you are 65 or older, or because of a disability, Medicare pays first and COBRA pays second. Medicare.gov is blunt about what that can mean: COBRA may pay only a small portion of your medical costs, and you may pay most of the costs yourself. Ask the COBRA plan what percentage it pays. The exception is ESRD, where COBRA pays first during a coordination period of up to 30 months, covered below.

CMS calls the COBRA decision "very complicated" for a reason: your COBRA election period, your Part B enrollment period and your Medigap Open Enrollment Period each have their own deadlines, they can overlap, and a choice about one can cost you rights under another. CMS recommends talking with your State Health Insurance Assistance Program (SHIP) before taking COBRA. SHIP counseling is free; find yours at shiphelp.org or through 1-800-MEDICARE. For the enrollment windows themselves, see Medicare enrollment periods explained, and for what a late signup costs, see Medicare late enrollment penalties.

One more COBRA detail from CMS: if a former employer goes bankrupt or out of business, federal COBRA rules may still protect you if another company in the same corporate organization offers a group health plan. If you cannot get COBRA, you may have the right to buy a Medigap policy even after your Medigap Open Enrollment Period has ended; your SHIP can tell you.

Drug coverage: the step that can cost you your plan

This is the warning CMS repeats in nearly every section, and it deserves its own heading. If you have employer or union coverage and add Medicare drug coverage (Part D), you may lose your employer or union coverage, including the non-drug health coverage, for yourself and for your spouse or dependents. CMS says you may not be able to get it back, and that this is true even if you get Extra Help. Call the benefits administrator before you join any Medicare drug plan.

The other drug rules from the same pages:

• Employers and unions notify you each year whether your drug coverage is "creditable," meaning it is expected to pay on average at least as much as Medicare drug coverage. Keep that notice.
• If your drug coverage is creditable, you can wait to join a Medicare drug plan without a penalty, as long as you do not go 63 days or more without creditable coverage.
• FEHB plans include creditable drug coverage, so federal retirees do not need a Medicare drug plan. If you get one anyway, you can keep FEHB, and in most cases Medicare pays first.
• Postal Service Health Benefits (PSHB) plans include Medicare drug coverage if you are eligible for Medicare.
• If you take COBRA and it includes creditable drug coverage, you get a Special Enrollment Period to join a Medicare drug plan without a penalty when COBRA ends. CMS also notes there may be reasons to take Medicare drug coverage instead of, or in addition to, COBRA.

Federal programs: VA, TRICARE, IHS, Black Lung and Medicaid

Veterans' benefits

If you have, or can get, both Medicare and VA benefits, you can get care under either one, but Medicare and the VA generally cannot pay for the same items or services. Each time you get care, you choose which benefit to use. Medicare pays for Medicare-covered services. The VA pays for VA-authorized services in a VA facility or an authorized non-VA facility, and Medicare does not pay for care you get at a VA facility.

If the VA authorizes care in a non-VA hospital but not every service during the stay, Medicare may pay for the Medicare-covered services the VA did not authorize. A doctor who bills the VA for VA-authorized care must accept the VA's payment in full and cannot bill you or Medicare for it. You can join a Medicare drug plan as a veteran, but you cannot use both for the same drug at the same time, and you lose access to the VA's Meds by Mail program.

TRICARE

The rule turns on active duty. If you are on active duty and have Medicare, TRICARE pays first and Medicare pays second. If you are not on active duty, Medicare pays first and TRICARE may pay second. At a military hospital or clinic, or any other federal provider, TRICARE pays, and Medicare usually does not pay for care from federal providers.

TRICARE For Life covers Medicare-eligible uniformed services retirees 65 or older, their eligible family members and survivors, and certain former spouses, and you must have both Part A and Part B to get it. CMS adds that most people with TRICARE who are entitled to Part A must also have Part B to keep TRICARE drug benefits. You do not need a Medicare drug plan with TRICARE; if you join one, the Medicare drug plan pays first and TRICARE second.

Indian Health Service

Generally Medicare pays first, before the IHS delivery system (facilities run by IHS, a tribe or tribal organization, or an urban Indian organization). If you also have non-tribal employer coverage, the same 20-employee rule applies: 20 or more employees, the group plan pays first; fewer than 20 and not in a larger multi-employer group, Medicare pays first. With a tribal health plan, Medicare pays first. Drugs you get through an Indian health facility stay at no cost to you.

Federal Black Lung Program

For care related to black lung disease, including drugs, the Federal Black Lung Program pays first if it covers the service, and Medicare will not pay for services the program covers. For everything else, Medicare pays first. If the program refuses a bill, ask your provider to send it to Medicare with a copy of the program's letter explaining why. The program's number is 1-800-638-7072.

Medicaid

Medicaid never pays first for services Medicare covers. It pays after Medicare, and in rare cases where there is other coverage too, after that coverage. Medicare covers your drugs, so you need a Medicare drug plan or a Medicare health plan with drug coverage; if you do not join one, Medicare enrolls you in one. With full Medicaid, or if you qualify for your state's Medicare Savings Program, you automatically qualify for Extra Help. See help paying for Medicare for those programs.

Medicare because of a disability, under 65

For people under 65 who have Medicare because of a disability (other than ESRD), CMS sorts it by where the group coverage comes from:

• Coverage from a former employer (retiree coverage): Medicare pays first, because the coverage is not based on active employment. You need both Part A and Part B to get full benefits from the retiree plan.
• Coverage from your, your spouse's or a family member's current employer with 100 or more employees (or a smaller employer in a multi-employer group where one company has at least 100): the group plan pays first and Medicare second. CMS calls these "large group health plans," and they cannot treat a member differently because the member is disabled and has Medicare.
• Current employer with fewer than 100 employees, not in such a group: Medicare pays first.

CMS's example is Mary, who works full time for a company with 120 employees and covers her husband, who has Medicare because of a disability. Her plan pays first for him and Medicare second. Note the different threshold: 20 employees for people 65 and older, 100 employees for people under 65 with a disability.

If you have received Social Security or Railroad Retirement Board disability benefits for less than 24 months, you are not eligible for Medicare yet, and your group plan is your only payer. After 24 months you are enrolled in Medicare automatically. CMS notes there is no 24-month wait for people with ALS.

End-Stage Renal Disease: the 30-month coordination period

ESRD has its own rule. Once you become eligible for Medicare because of permanent kidney failure, a 30-month coordination period begins. During it, your group or retiree plan keeps paying first regardless of the employer's size, whether you are working or retired, and even if the plan says its policy is to pay second to Medicare. If the plan does not pay covered services in full during those months, Medicare may pay second for all Medicare-covered services, not only kidney care. After 30 months, Medicare pays first.

COBRA follows the same pattern for ESRD: COBRA pays first during a coordination period of up to 30 months, then Medicare pays first. And if you already had Medicare because of age or another disability before ESRD, whichever coverage was paying first keeps paying first.

Accidents, injuries and workers' compensation

For care related to an accident or injury, other insurance comes before Medicare. No-fault insurance (auto, homeowners and commercial plans that pay regardless of fault) pays first for related care. So does liability insurance, including auto, homeowners, product, malpractice, and uninsured or underinsured motorist coverage. If you have a liability claim for medical expenses, CMS says you or your lawyer should notify Medicare as soon as possible. Workers' compensation pays first for items, services and drugs related to a work illness or injury.

Conditional payments

These claims can take time. If the insurer does not pay promptly, usually within 120 days, your provider may bill Medicare, and Medicare may make a "conditional payment" so you do not pay out of your own pocket while the claim is pending. It is conditional because it has to be repaid: if you later get a settlement, judgment, award or other payment, you are responsible for making sure Medicare is repaid. CMS gives the example of Joan, hit by another driver whose insurer disputed fault; Medicare paid the hospital, and when the case settled, Joan had to repay Medicare.

Medicare cannot make a conditional payment when there is an open Ongoing Responsibility for Medicals case, or an open Workers' Compensation Medicare Set-aside Arrangement, for that injury. If no-fault or liability insurance denies the bill or is found not liable, Medicare pays first for Medicare-covered services, and you still owe your normal share.

Workers' compensation settlements

When a workers' compensation claim settles, some of the money may go into a Workers' Compensation Medicare Set-aside Arrangement for future care related to the injury. CMS's rules for that money: use it only for related care that Medicare would otherwise cover, including drugs, even if you have Medicare Advantage or a Medicare drug plan; do not use it for other injuries or for things Medicare does not cover, such as dental work; spend it all before Medicare pays for related care; and keep detailed records of what you bought. CMS also says to call the Benefits Coordination & Recovery Center as soon as you file a workers' compensation claim.

Marketplace plans once Medicare starts

If you already have Medicare, CMS says it is generally against the law for someone who knows that to sell you a Health Insurance Marketplace policy, even if you have only Part A or only Part B. If you had a Marketplace plan before Medicare, you can keep it, but once Part A starts, any premium tax credits or other savings end and you pay full price. If you keep it after aging into Medicare, Medicare pays first.

A quick reference

When your coverage changes, and where to call

Insurers have to report coverage changes to Medicare, but CMS says it can take time to show up in Medicare's records. If it does not, call the Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY 1-855-797-2627). Have your Medicare card ready and be prepared to give your name, the health plan's name and address, your policy number, and the date the coverage was added, changed or stopped and why. Then tell your doctors, and ask your plan to confirm it reported the change.

The same center answers questions about who pays first, and it handles repayment when Medicare made a conditional payment. For TRICARE For Life, Medicare lists 1-866-773-0404 (TTY 1-866-773-0405); for the VA, 1-800-827-1000; for Medicare itself, 1-800-MEDICARE (1-800-633-4227).

If you are approaching 65 with coverage through work, the two numbers to check before you decide anything are how many people your employer (or your spouse's employer) employs, and whether your drug coverage notice says "creditable." Those two facts answer most of this guide for you.