AARP Hearing Center
If you’re enrolled in Medicare and have coverage from Tricare for Life and retiree health insurance from a civilian job, Medicare pays first, the retiree health insurance pays second, and Tricare for Life pays third.
Having all three types of coverage is typical for retired military who take a civilian job after they leave the service.
Think of it like this: 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 a former employer or union or other forms of supplemental coverage such as Medigap insurance pay second. Other government programs, such as Medicaid or Tricare for Life, pay last.
The rules are different if you or your spouse is still working and you have coverage from an active employer. If the employer has 20 or more employees, the group health insurance pays first and Medicare pays second. For smaller employers, Medicare generally provides primary coverage at 65 and the employer’s coverage is secondary.
How do all three work together?
Using all three coverages for one claim is not unusual. Each type of insurance you have, including Medicare, is considered a payer. If you have more than one payer, Medicare’s coordination of benefits rules determine which policy pays first, second and third.
When you go to a doctor or other provider, the bill is sent to the first payer, Medicare in this case, which pays only what it covers. What’s left then goes to the secondary payer, which may cover some deductibles, copayments and expenses that Medicare doesn’t cover. Finally, the third payer may or may not cover the remaining costs.
Your retiree coverage could pay some of Medicare’s deductibles and copayments, and Tricare for Life may cover the remaining expenses.
But if you don’t sign up for Medicare at 65, the scenario changes. Your retiree coverage may not pay your claims. The rules are different for retired federal employees covered through the Federal Employees Health Benefits program.
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