Medicare Coordination of Benefits: What You Need to Know to Get Started

Who Should Read This

This publication is useful for anyone who has Medicare and also has other health insurance or coverage. That includes people who are 65 or older, as well as younger people who have Medicare due to a disability or certain health conditions. It is also helpful for people who are still working and have coverage through an employer, as well as retirees who have coverage from a former employer. Spouses, caregivers, and family members who help manage healthcare decisions for a loved one with Medicare will also find this information valuable.

This publication is especially helpful if you:

• Have Medicare and coverage from an employer or union
• Have both Medicare and Medicaid
• Are covered under a spouse or partner's health plan
• Have veterans benefits or TRICARE along with Medicare
• Are unsure which insurance pays first when you get care

Quick Overview

This publication from the Centers for Medicare and Medicaid Services explains how Medicare works alongside other types of health insurance. It helps people understand which insurance pays first and which pays second when a person has more than one type of coverage. The publication covers key terms, rules for different coverage situations, and steps people can take to make sure their claims are handled correctly.

Key Takeaways

• When you have more than one insurance plan, there are rules that determine which one pays first — this is called coordination of benefits
• The insurance that pays first is called the primary payer, and the one that pays after is called the secondary payer
• Medicare is not always the primary payer — it depends on your specific situation and the type of other coverage you have
• Employer group health plans may pay before Medicare if your employer has 20 or more employees and you are still working
• If you have both Medicare and Medicaid, Medicare pays first and Medicaid pays second
• It is important to keep your Medicare records updated with accurate information about any other insurance you have
• The Medicare Coordination of Benefits Contractor helps manage information about other coverage to make sure claims are paid correctly

Publication Summary

What Is Coordination of Benefits?

Coordination of benefits is the process used to decide which insurance plan pays first when a person has more than one type of health coverage. Having more than one plan does not mean you get paid more than the actual cost of your care. Instead, the two plans work together to cover costs, with one paying first and the other picking up some or all of the remaining costs.

Primary and Secondary Payers

The plan that pays first is called the primary payer. It pays up to the limits of its coverage. The plan that pays second is called the secondary payer. It may pay for costs that the primary payer did not cover, but it does not always pay all remaining costs. In some cases, you may still have out-of-pocket costs even after both plans have paid.

When Medicare Pays First

Medicare acts as the primary payer in several common situations. If you have Medicare and you are retired, Medicare generally pays before any retiree coverage from a former employer. If your employer has fewer than 20 employees and you are still working, Medicare usually pays first. Medicare also pays first for people who have Medicare due to a disability if their employer has fewer than 100 employees.

When Medicare Pays Second

There are also situations where Medicare pays second. If you are still working and your employer has 20 or more employees, the employer group health plan pays first and Medicare pays second. For people with Medicare due to a disability, if the employer has 100 or more employees, the employer plan pays first. If you have Medicare and are covered by a spouse's employer plan, the same size rules apply.

Medicare and Medicaid

People who have both Medicare and Medicaid are sometimes called dual eligible. For these individuals, Medicare always pays first. Medicaid acts as the payer of last resort, meaning it pays after all other available coverage has been applied. Medicaid may help cover costs like copayments, coinsurance, and some services that Medicare does not cover.

Medicare and TRICARE

TRICARE is health coverage for active duty and retired military members and their families. If you have both Medicare and TRICARE, Medicare generally pays first and TRICARE pays second. However, there are some exceptions for active duty service members. It is important to understand how these two programs interact to avoid unexpected bills.

Medicare and Veterans Benefits

Veterans benefits through the Department of Veterans Affairs are separate from Medicare. These two programs do not coordinate benefits with each other in the same way other plans do. Veterans may receive care through VA facilities using their VA benefits, or they may choose to use Medicare for care outside of VA facilities. You generally cannot use both for the same service at the same time.

Keeping Your Information Updated

It is very important to make sure Medicare has accurate and current information about any other health coverage you have. This helps ensure your claims are sent to the right payer first. The Medicare Coordination of Benefits Contractor, also known as the BCRC, is responsible for collecting and managing this information. If your coverage changes, contact Medicare to update your records so your claims are handled without delay.

What to Do If a Claim Is Not Paid Correctly

Sometimes a claim may not be paid in the right order. If you believe a mistake was made, you can contact Medicare or your other insurer to ask questions and request a review. Keeping records of your insurance cards, explanation of benefits statements, and any correspondence from your insurers can help resolve issues more quickly.

Frequently Asked Questions

What does it mean when Medicare is the secondary payer?

When Medicare is the secondary payer, it pays after your other insurance has paid its share. Your other insurance, such as an employer plan, pays first up to its coverage limit. Medicare then considers paying some or all of the remaining balance, depending on the situation.

Does having two insurance plans mean all my costs are covered?

Not necessarily. Having two plans helps reduce out-of-pocket costs, but it does not always mean everything is paid in full. Each plan has its own rules and limits. There may still be costs you are responsible for after both plans have paid.

What if my employer has exactly 20 employees — which insurance pays first?

The 20-employee threshold is important. If your employer has 20 or more employees, the employer group health plan generally pays first and Medicare pays second. If your employer has fewer than 20 employees, Medicare usually pays first. The exact count matters, so check with your employer or benefits administrator if you are unsure.

How does Medicare know about my other insurance?

Medicare uses a process called the Medicare Secondary Payer program to gather and track information about other coverage. The Medicare Coordination of Benefits Contractor collects this information from employers, insurers, and other sources. You can also report changes in your coverage directly to Medicare by calling 1-800-MEDICARE.

What happens if my claim is sent to the wrong payer first?

If a claim is paid out of order, it can cause delays and confusion. You may receive unexpected bills or have trouble getting reimbursed. Contact both insurers and Medicare to explain the situation and ask for the claim to be reviewed and reprocessed correctly. Keeping clear records of all your coverage helps resolve these situations faster.

Access the Full Publication

Publication Number: CMS Product No. 11546
Publication Date: January 2026
Length: 4 pages