Medicare almost always pays first when people are retired, enrolled in Medicare, and entitled to one or more other types of health benefits. Usually retiree benefits from former employers or unions, or other forms of supplemental coverage, such as Medigap insurance, pay second. Other government programs, such as Medicaid, TRICARE For Life or the Indian Health Service, pay last.
Payments to providers from these types of health insurance work together through Medicare’s coordination of benefits system. This system ensures that your medical bills are paid on time without you having to submit a whole lot of paperwork or take any other action. It may not work perfectly every time, and there may be some occasions when you need to submit a bill, but on the whole this system saves you a lot of time and effort. Here’s how it works:
Each type of insurance you have, Medicare included, is known as a payer. If you have more than one payer, Medicare’s coordination of benefits rules determine which pays first (or second or third). When you go to a doctor or other provider, the bill is sent to the first payer (the primary payer), which pays what it owes. If that amount doesn’t fully meet the bill, the remainder goes to the next payer (the secondary payer) and maybe even a third. Mostly, all you do is check the statements that each of these payers sends you and pay for anything that’s not covered.
But Medicare doesn’t automatically know what other health coverage you have, if any. So you need to fill out the Medicare Initial Enrollment Questionnaire. You can access the questionnaire by creating a personal online account at www.mymedicare.gov, or by calling Medicare’s Benefits Coordination & Recovery Center toll-free at 855-798-2627 (TTY: 1-855-797-2627).
Note that there is no coordination of benefits between Medicare and the Veterans Affairs health system. If you have VA coverage as well as Medicare, your bills are sent to the VA if you use VA doctors and other providers, or to Medicare for all others.
For more information, see the official publication “Medicare and Other Health Benefits: Your Guide to Who Pays First” (PDF).