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Coordination of Benefits When You Have Medicare

Probably one of the most confusing things about health insurance, with or without Medicare coverage, is when you have more than one insurance plan and want to understand who pays your medical bills. While it is difficult to anticipate each and every situation, there are some basics that can help you understand how Medicare and other insurance benefits coordinate their efforts.

Understanding How Payers Coordinate Benefits

Every type of insurance coverage you have – group health plan coverage, Medicare, Medicare Supplement Insurance – is designated as a “payer.” When there is more than one payer, there are rules concerning the coordination of benefits which decides who pays first, who pays second and so on. The primary payer will pay what it owes up to the limits of its coverage. The bill will then be forwarded to the secondary payer to pay for any costs uncovered by the primary payer. In some rare cases, there may even be a third payer.

“Be sure to notify your physician if you have Medicare Supplement Insurance,” advises Alan Weinstock, insurance broker at “It’s easy to think that Medicare will cover most of your needs and forget that your Medigap coverage is there to cover the gaps.”

Whether Medicare is your primary or secondary payer depends on several things. However, it is always important to advise your doctor and other medical providers about all the insurance coverage you have in order to help them coordinate your bills and to ensure they are submitted to the correct payer.

Rules on Whether Medicare is First or Second Payer

So who pays first all depends on your current insurance coverage, whether you’re working or retired and your age. There are many scenarios that dictate whether Medicare is the first or second payer; however, here are some of the more common situations. Keep in mind you are not eligible for Medicare unless you are 65 or older or disabled.

If you have other coverage from an employer (your own or your spouse’s), are over the age of 65 AND

  • You are retired, Medicare pays first

  • The employer has less than 20 employees, Medicare generally* pays first

  • The employer has 20+ employees, the employer pays first

  • You are disabled and the employer has less than 100 employees, Medicare pays first

  • You are disabled and the employer has 100+ employees, the employer pays first

*If your employer participates in a plan that is sponsored by two or more employers, the rules are slightly different.

In addition, generally the following types of coverage pay first: no-fault insurance (including automobile insurance), liability (including automobile insurance), black lung benefits and workers’ compensation. Medicaid and TRICARE only pay after Medicare, employer group health plans and/or Medigap have paid.

Understanding how your plans coordinate to give you complete health coverage is important to your peace of mind. You can contact Medicare at 1-800-633-4227 with further questions.

Post Author: Lisa Sharon