Who Pays First? Medicare and Other Insurance

When you have Medicare plus other coverage, one payer settles the bill first and the other may cover some of what is left. Federal Medicare Secondary Payer (MSP) rules decide the order — it is not a choice you or your provider make. This overview walks through the most common situations for people in Texas and nationwide.

What does "who pays first" actually mean?

The primary payer pays a covered claim first, up to the limits of its coverage; the secondary payer may then pay some or all of what the primary payer did not, but only for services both plans cover. The secondary payer does not automatically pay everything left over. If Medicare is secondary, your provider must bill the primary payer first, then send Medicare the claim with the primary payer's decision. This coordination process is called Coordination of Benefits (COB).

Still working at 65 with employer coverage — who pays first?

The size of the employer decides the order when you keep a group health plan (GHP) through your own or a spouse's current job. Federal MSP rules draw the line at 20 employees:

If the employer has 20 or more employees, the group plan is primary and Medicare is secondary — a reason some people delay Part B while they keep working. If the employer has fewer than 20 employees, Medicare pays first, so enrolling in Part B on time usually matters. Rules for multi-employer plans can vary, so confirm your specific plan's terms.

If you are under 65 and on Medicare because of disability

For people entitled to Medicare due to disability who have coverage through current employment (their own or a family member's), the threshold is 100 employees, not 20. If the employer has fewer than 100 employees, Medicare generally pays first; if it has 100 or more, the group plan pays first.

What about retiree coverage after you stop working?

Medicare pays first once the employment ends. If you are 65 or older, no longer working, and covered by an employer or union retiree plan, Medicare is primary and the retiree coverage pays second. Retiree coverage is not tied to a current job, so it does not push Medicare into the secondary spot the way active-employment coverage can.

Does COBRA pay before or after Medicare?

Medicare generally pays first when you have both Medicare and COBRA. For someone 65 or older, or under 65 with a disability, who is entitled to Medicare and also has COBRA continuation coverage, Medicare is primary and COBRA is secondary. Because Medicare usually pays first here, review your options carefully before relying on COBRA alongside Medicare.

There is a narrow exception for End-Stage Renal Disease (ESRD): during the first 30 months of Medicare eligibility or entitlement based on ESRD, a group health plan or COBRA pays first; after that 30-month coordination period, Medicare pays first.

How does VA coverage work with Medicare?

VA benefits and Medicare do not coordinate on the same claim — you generally choose one or the other for each episode of care. In most cases you must use a VA facility (or a VA-authorized provider) for the VA to cover a service, and Medicare will not pay for care you receive through the VA. When you use non-VA providers, Medicare rules apply instead. Many veterans keep both so they have options, but the two programs typically do not pay on the same bill. Because VA coordination has its own rules, confirm specifics with the VA and at Medicare.gov before care.

What if my care involves workers' comp, no-fault, or liability insurance?

Those types of coverage pay first for the related injury, and Medicare generally does not pay for that same care. When treatment is for a job-related illness or injury, workers' compensation is responsible first. When care relates to an auto accident or other incident covered by no-fault or liability insurance, that insurer pays first for accident-related services. Medicare is not the primary payer for the injury those policies cover.

Because these cases can take time to settle, Medicare may make a conditional payment so bills are not left unpaid while a claim is contested. A conditional payment is essentially a loan: if a settlement, judgment, award, or other payment later comes through, Medicare is entitled to be repaid.

Who handles recovery and coordination questions?

The Benefits Coordination & Recovery Center (BCRC) is the official point of contact. Medicare uses the BCRC to keep other-insurance records current and to recover conditional payments after a settlement. Report an accident or injury, a change in employment or health coverage, or a question about whether Medicare is primary or secondary to the BCRC at 1-855-798-2627 (TTY 1-855-797-2627), Monday–Friday, 8 a.m.–8 p.m. ET. Do not ignore a letter from the BCRC — responding promptly helps avoid claim problems later.

Quick reference: common coordination situations

Where to confirm your own situation

Coordination depends on details — employer size, whether the job is current, the reason for Medicare eligibility, and the type of other coverage. Because these rules and any related figures change over time, verify your specific case at Medicare.gov, by calling 1-800-MEDICARE (1-800-633-4227), or by contacting the BCRC for recovery and coordination questions. The federal guide "Medicare & Other Health Benefits: Your Guide to Who Pays First" covers additional scenarios in detail.

See also: Medicare Basics — Parts A, B, C & D, Medicare & ACA Enrollment Windows, Medicare Supplement (Medigap) Plans & Underwriting, Medicaid & Dual-Eligible Levels at a Glance.