If you have Medicare plus another health plan, federal Medicare Secondary Payer rules decide which one pays your bill first. You do not get to choose. In 2026 the shortest version is this: if your employer has 20 or more workers and you are covered through a current job, the employer plan pays first and Medicare pays second. If the employer has fewer than 20 workers, Medicare pays first. Retiree coverage, COBRA, TRICARE for Life, and Medicaid all pay after Medicare. Workers' compensation and auto insurance pay first for anything related to the injury.
The plan that pays first is the primary payer. It processes the claim up to the limits of its coverage. Whatever is left goes to the secondary payer, which may cover some or all of the remaining cost. Neither plan pays more than it would have paid on its own, and the two combined will not necessarily cover 100 percent of the bill.
Who Pays First in 2026: The Full Chart
| Your situation | Pays first | Pays second |
|---|
| Age 65+, working, employer has 20 or more employees | Group health plan | Medicare |
| Age 65+, working, employer has fewer than 20 employees | Medicare | Group health plan |
| Under 65 with a disability, employer has 100 or more employees | Group health plan | Medicare |
| Under 65 with a disability, employer has fewer than 100 employees | Medicare | Group health plan |
| End-stage renal disease, first 30 months of Medicare | Group health plan | Medicare |
| End-stage renal disease, after 30 months | Medicare | Group health plan |
| Retiree coverage from a former employer | Medicare | Retiree plan |
| COBRA (entitled to Medicare based on age or disability) | Medicare | COBRA |
| COBRA with ESRD, first 30 months | COBRA | Medicare |
| TRICARE, not on active duty | Medicare | TRICARE |
| TRICARE, on active duty | TRICARE | Medicare |
| Medicaid | Medicare | Medicaid |
| Workers' compensation (injury-related care) | Workers' comp | Medicare |
| Auto or no-fault insurance (accident-related care) | No-fault insurer | Medicare |
| Liability insurance (claim-related care) | Liability insurer | Medicare |
| Black lung benefits (black-lung-related care) | Black lung program | Medicare |
| Medigap (Medicare Supplement) | Medicare | Medigap |
VA coverage is the exception that does not fit the chart. Medicare and VA health benefits do not coordinate on the same bill. You choose which system to use for each episode of care. If you go to a VA facility with VA authorization, VA pays. If you use a non-VA provider, Medicare pays and VA generally does not. Filing one bill with both is not an option.
Why the Employee Count Matters So Much
The 20-employee line is the single most consequential rule in coordination of benefits, because it determines whether you can safely delay Part B while you keep working.
If your employer has 20 or more employees and you are actively working, that group plan is primary. Medicare considers that coverage creditable, so you can delay Part B without a late enrollment penalty and pick it up later through an eight-month Special Enrollment Period that starts when the job or the coverage ends.
If your employer has fewer than 20 employees, Medicare is primary. Small group plans are allowed to pay as though you already have Medicare Parts A and B, whether or not you actually enrolled. Skip Part B in that situation and you can be left holding roughly 80 percent of your outpatient bills yourself, because the employer plan pays only its secondary share and Medicare pays nothing. Small-employer workers approaching 65 should confirm in writing with the employer's benefits administrator how the plan pays before deciding to delay.
For people under 65 who have Medicare because of a disability, the threshold is 100 employees, not 20. For people with end-stage renal disease, employer size does not matter at all during the 30-month coordination period.
The 30-Month ESRD Coordination Period
If you qualify for Medicare because of permanent kidney failure requiring dialysis or a transplant, and you also have group health coverage, the group plan pays first for 30 months. Employer size is irrelevant, and so is whether the coverage comes from a current job, retiree benefits, or COBRA.
The 30-month clock starts the month you become eligible for or entitled to Medicare based on ESRD, whichever comes first, not the month you enroll. When the 30 months end, Medicare becomes primary and the group plan drops to secondary. Dialysis centers and transplant programs track this date closely, but it is worth knowing your own start date because a miscounted clock produces months of misrouted claims.
What Medicare Actually Costs in 2026
Coordination determines who pays first, not whether you owe anything. Here are the 2026 Medicare cost-sharing amounts that a secondary payer may or may not cover for you.
| 2026 Medicare cost | Amount |
|---|
| Part B standard monthly premium | $202.90 |
| Part B annual deductible | $283 |
| Part A inpatient hospital deductible (per benefit period) | $1,736 |
| Part A coinsurance, days 61 to 90 | $434 per day |
| Part A lifetime reserve day coinsurance | $868 per day |
| Skilled nursing facility coinsurance, days 21 to 100 | $217 per day |
| Part D maximum deductible | $615 |
| Part D out-of-pocket cap | $2,100 |
| Insulin cap per month, per covered product | $35 |
The Part D out-of-pocket cap rose from $2,000 in 2025 to $2,100 in 2026. The Medicare Prescription Payment Plan, which spreads drug costs into capped monthly payments instead of large charges at the pharmacy counter, now auto-renews from year to year unless you opt out. Every Part D plan is required to offer it.
Higher-income enrollees pay income-related monthly adjustment amounts on top of the standard Part B and Part D premiums. Those surcharges are based on the tax return from two years earlier, so 2026 premiums reflect 2024 income.
How Medicare Learns About Your Other Coverage
Medicare does not automatically know what other insurance you have. The Benefits Coordination and Recovery Center, or BCRC, is the CMS contractor that maintains the record of every Medicare beneficiary's other coverage. It builds that record from three sources: quarterly reporting from group health plans under Section 111 of the MMSEA, mandatory reporting from liability, no-fault, and workers' compensation insurers, and information you report yourself.
When your record is wrong, claims get denied or bounced back and forth between insurers for months. The most common triggers are retiring, a spouse retiring, a group plan ending, starting COBRA, an employer changing carriers, or a workers' compensation claim closing.
Report a change by calling the BCRC at 1-855-798-2627 (TTY 1-855-797-2627), Monday through Friday, 8:00 a.m. to 8:00 p.m. Eastern time. Have your Medicare number, the name of the other insurer, the policy number, the policyholder's name, and the exact start and end dates ready before you call.
Step by Step: Fixing a Coordination of Benefits Problem
- Read the Medicare Summary Notice or Explanation of Benefits. Look for language like "primary payer information on file" or a denial that says another insurer is responsible. That tells you Medicare believes something else pays first.
- Confirm which plan should actually be primary. Use the chart above. For employer coverage, verify the employee count with the benefits administrator, not with a coworker's guess.
- Call the BCRC at 1-855-798-2627 and give the correct dates. Ask the representative to read your coverage record back to you so you can catch a wrong termination date.
- Ask the other insurer to send a coverage termination letter if a plan ended. Providers and Medicare both accept this as proof.
- Ask the provider to rebill. Once the BCRC record is corrected, the claim has to be resubmitted. Corrections do not automatically reprocess old claims. Give the record a few days to update, then ask the billing office to refile.
- Do not pay a bill that is caught in a coordination dispute until the correct primary payer has processed it. Ask the provider to hold the account while it is resolved.
- Escalate if it stalls. Call 1-800-MEDICARE (1-800-633-4227) or contact your State Health Insurance Assistance Program, which offers free one-on-one counseling in every state.
Accidents, Settlements, and Conditional Payments
If you are hurt in a car accident, at work, or in a situation where someone else may be liable, that insurer pays first for related care. Those claims often take months or years to resolve, and Medicare will not leave you without care in the meantime.
Medicare can make a conditional payment, which is exactly what it sounds like: Medicare pays the bill on the condition that it gets repaid when the settlement, judgment, or award arrives. Repayment comes out of the settlement, and Medicare pursues it through the Medicare Secondary Payer Recovery Portal. Your attorney should handle the payoff calculation before funds are distributed.
Two practical points. Report any liability, no-fault, or workers' compensation claim to the BCRC as soon as it is filed, because unreported claims are the main reason recovery demands arrive years later as a surprise. And do not spend a settlement before the conditional payment amount is finalized. CMS enforcement of mandatory insurer reporting has tightened heading into 2026, which means fewer of these obligations slip through unnoticed.
Medicare Advantage and Medigap
Medicare Advantage (Part C) replaces Original Medicare as your coverage, so the plan sits in Medicare's spot in the payment order. If Medicare would have been secondary to your employer plan, your Medicare Advantage plan is secondary too. Advantage plans have network rules on top of that, which can complicate a secondary payment. Many people with active employer coverage stay on Original Medicare specifically to avoid that friction.
Medigap is different. It is not a competing payer. It is designed to pick up Original Medicare's deductibles and coinsurance after Medicare pays, and it never pays first. Medigap also does not coordinate with employer coverage, which is why buying a Medigap policy while an employer plan is still primary usually wastes premium dollars.
Health Savings Accounts and Medicare
Once you enroll in any part of Medicare, including premium-free Part A, you can no longer contribute to a health savings account. You can still spend the balance you already have.
The trap is retroactivity. If you enroll after 65, Part A can be backdated up to six months, though never earlier than your Medicare eligibility date. Contributions made during those retroactive months become excess contributions subject to tax. If you plan to keep contributing to an HSA while working past 65, stop contributions at least six months before you enroll in Medicare or claim Social Security, since claiming Social Security at 65 or later automatically enrolls you in Part A.
Frequently Asked Questions
Does having two insurance plans mean nothing is out of pocket?
No. The secondary payer pays only what it would have paid as the primary payer, minus what the primary already paid. If the secondary plan has a deductible you have not met, or the service is not covered under its rules, you still owe the balance.
Can I choose which plan pays first?
No. Medicare Secondary Payer rules are federal law, not a preference. Providers and insurers are required to bill in the correct order, and a plan that pays out of order can demand the money back.
What happens if I do not enroll in Part B while working for a small employer?
If your employer has fewer than 20 employees, Medicare is primary. The employer plan is permitted to pay as if Medicare already paid its share, even if you never enrolled. That can leave you responsible for a large portion of every outpatient bill. Verify with the benefits administrator before delaying Part B.
How long do I have to enroll in Medicare after losing employer coverage?
Eight months for Part A and Part B through a Special Enrollment Period that begins when the employment or the group coverage ends, whichever comes first. For Part C or Part D, the window is only two months. COBRA and retiree coverage do not extend the Part B window, because neither counts as coverage from current employment.
Does Medicaid pay before Medicare?
No. Medicaid is the payer of last resort. Medicare pays first, then Medicaid may cover remaining cost-sharing and some services Medicare excludes, such as long-term custodial care. People with both are called dual eligibles, and Medicare Savings Programs may also pay the Part B premium.
Who do I call when two insurers keep pointing at each other?
Start with the BCRC at 1-855-798-2627 to make sure Medicare's coverage record is right, since a wrong record is the usual cause. If the record is correct and the claim still bounces, call 1-800-MEDICARE or your State Health Insurance Assistance Program for free help.
Does a Medigap policy affect who pays first?
No. Medigap only pays after Original Medicare, and only on Medicare-approved charges. It cannot be primary, and it does not coordinate with employer group coverage.
What is a conditional payment?
A payment Medicare makes for care that another insurer is expected to cover eventually, such as after an accident. Medicare must be repaid from the settlement, judgment, or award. Report the claim to the BCRC when it is filed so the amount is tracked accurately from the start.
