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Who Pays First?

Do you have Medicare along with other health insurance? Then you need to know which insurer pays first. When you use your insurance benefits and there is more than one insurance company involved, the “coordination of benefits” rules decide who pays first. In Medicare terminology, the insurance that pays first is the primary company and the insurance that pays second is the secondary payer.

The primary insurance company will pay the medical bill up to the limits of the policy coverage, and if there is any remainder it is sent to the secondary payer.

Below are some of the more common coordination of benefits scenarios.

If you have retiree insurance (insurance from former employment)

• Medicare pays first (See note 1 below)

If you are 65 or older, have group health plan coverage based on your or your spouse’s current employment, and the employer has 20 or more employees.

• Your group health plan pays first.

If you are 65 or older, have group health plan coverage based on your or your spouse’s current employment, and the employer has fewer than 20 employees.

• Medicare pays first (See note 1 below)

If you are under 65 and disabled, have group health plan coverage based on your or a family member’s current employment, and the employer has 100 or more employees.

• Your group health plan pays first.

If you are under 65 and disabled, have group health plan coverage based on your or a family member’s current employment, and the employer has fewer than 100 employees.

• Medicare pays first (See note 1 below)

NOTES:

  1. If Medicare pays first (primary payer) and your employer is the secondary payer, in most cases you will need to enroll in Medicare Part B before your employer’s insurance will pay for Part B services. (Unfortunately, the Medicare & You booklet does not make this very clear.)

2. The primary payer will pay up to the limits of its coverage. The secondary only pays if there are costs the primary payer didn’t cover.

3. The secondary payer (which could be Medicare) might not pay all of the uncovered costs.

For more information you can download or read the official “Coordination of Benefits” booklet on my Resources page.