Key Takeaways

• Medicare often pays after other health insurance plans, but that doesn’t mean it stops being relevant or necessary. Understanding the primary vs. secondary payer rules helps you avoid delayed claims or denied services.

• If you’re 65 or older and covered by another plan—through work, a spouse, or retirement benefits—you still need to know how Medicare coordinates benefits to protect yourself from unexpected medical bills.

Medicare Doesn’t Disappear When You Have Other Coverage

If you’re eligible for Medicare and have another form of health insurance, you might assume you can delay or avoid Medicare altogether. But the truth is: Medicare doesn’t go away. It simply shifts roles depending on your specific circumstances.

Whether you’re still working, retired with coverage from a former employer, or covered by your spouse’s plan, Medicare often still plays a key part in your health coverage. Knowing who pays first can prevent costly misunderstandings and coverage gaps.

Understanding How Medicare Coordinates Benefits

Medicare follows a set of coordination of benefits rules to determine which payer is responsible for your medical costs first. These rules aren’t optional—they are based on federal law and apply to all Medicare beneficiaries.

What Is a Primary vs. Secondary Payer?

• The primary payer pays first for any covered services.

• The secondary payer may pay some or all of the remaining costs, depending on its rules and your plan’s details.

If Medicare is your secondary payer, it only steps in after the primary insurance has paid its share. If Medicare is primary, it pays first, and the other insurance fills in (if it offers secondary coverage).

1. Still Working? Employer Coverage Affects Medicare’s Role

If you’re 65 or older and still working, the size of your employer matters more than you might think.

• 20 or More Employees: Your employer’s group health plan pays first, and Medicare pays second.

• Fewer Than 20 Employees: Medicare usually becomes the primary payer, and your employer coverage becomes secondary.

This rule also applies if you’re covered under a spouse’s employer plan.

If you don’t enroll in Medicare when it is supposed to be primary, your employer plan may not pay your claims—leaving you with the full cost.

2. Retired? Former Employer Coverage Doesn’t Replace Medicare

Many retirees have health benefits from a former employer. These plans often act as a Medicare supplement rather than a replacement.

• In these cases, Medicare is always primary, and retiree coverage is secondary.

• If you fail to enroll in Medicare Parts A and B when eligible, your retiree plan may refuse to pay.

You need to keep Medicare active to keep these employer-sponsored retiree benefits working properly.

3. Have COBRA? It’s Almost Always Secondary

COBRA coverage lets you continue an employer health plan after leaving a job, typically for 18 to 36 months. But COBRA doesn’t outrank Medicare.

• If you qualify for Medicare before electing COBRA, Medicare pays first.

• If you qualify for Medicare after enrolling in COBRA, your COBRA may end early.

Either way, COBRA coverage is generally secondary to Medicare. Enroll in Medicare on time to avoid high out-of-pocket expenses.

4. TRICARE and CHAMPVA: Special Federal Coverage

Military retirees and their dependents may have TRICARE or CHAMPVA. These programs work with Medicare, but not instead of it.

• If you have TRICARE for Life, you must enroll in Medicare Parts A and B for your TRICARE coverage to continue.

• CHAMPVA also requires enrollment in both Parts A and B.

Medicare is primary, and TRICARE/CHAMPVA pays after Medicare.

5. Veterans Affairs (VA) Coverage Doesn’t Coordinate with Medicare

VA benefits cover care in VA facilities only. Medicare, by contrast, covers care from any provider that accepts Medicare.

• VA and Medicare do not coordinate. Neither is secondary to the other.

• You must choose one system or the other for each specific service.

Enrolling in Medicare allows you to access more doctors and hospitals, particularly outside the VA system.

6. Marketplace or Individual Insurance? Medicare Takes Priority

If you have an individual plan through the Health Insurance Marketplace, it’s important to know that once you become eligible for Medicare:

• You are no longer eligible for premium subsidies.

• Medicare becomes your primary coverage.

You should enroll in Medicare during your Initial Enrollment Period (IEP), even if you want to keep your marketplace plan. Failing to enroll on time may result in late enrollment penalties and coverage gaps.

7. Medicaid and Medicare: Dual Eligibility Means Shared Costs

If you’re eligible for both Medicare and Medicaid—often called “dual eligible”—each program covers different things:

• Medicare pays first for services it covers.

• Medicaid may pay Medicare premiums, deductibles, and coinsurance.

Medicaid is always the payer of last resort. It can act as a safety net to reduce your out-of-pocket burden.

When You Must Act: Key Timelines to Enroll

Timing is everything when it comes to Medicare coordination. Missing deadlines can cost you money and create gaps in coverage.

Initial Enrollment Period (IEP)

• Starts 3 months before your 65th birthday

• Includes your birth month

• Ends 3 months after your birthday month

Delaying enrollment during your IEP could trigger late penalties unless you qualify for a Special Enrollment Period.

Special Enrollment Period (SEP)

You may qualify for a SEP if:

• You’re still working and have employer coverage

• You lose other coverage unexpectedly

SEPs typically last 8 months after your job or coverage ends. During this time, you can enroll in Part B without penalty.

Mistakes That Could Leave You Without Coverage

Failing to understand how Medicare interacts with your other coverage can lead to serious consequences:

• You may become responsible for the full cost of services if the primary payer declines the claim.

• You might lose employer or retiree benefits if you don’t enroll in Medicare when required.

• You can face late enrollment penalties that increase your Medicare costs for life.

Always confirm with your benefits administrator or a licensed agent whether you should enroll in Medicare, even if you have other coverage.

Medicare Is Still a Central Piece of Your Coverage

Even if you have another health plan, Medicare is not optional once you’re eligible. It either takes the lead or fills in the gaps. The key is knowing which role it plays so you can make sure you’re covered from every angle.

Don’t assume your other plan replaces Medicare. In most cases, it doesn’t—and acting on that assumption can be costly.

If you have questions about how Medicare works with your current insurance or need help with enrollment timing, get in touch with a licensed agent listed on this website to walk through your options step by step.