As of February 2021, 12 million Americans were eligible for both programs. These beneficiaries are referred to as dual-eligible. Understanding how the programs work together will help you make the most of your healthcare experience.
Dual Eligibility Criteria
Medicare eligibility is the same regardless of where you live. It is set by the federal government. To be eligible for Medicare, you need to be 65 years or older or have a qualifying disability. In addition, you must also meet U.S. citizenship or permanent legal residency requirements.
Medicaid eligibility, on the other hand, varies geographically. Although the federal government sets the minimal program requirements, the program itself is run by the individual states. Each state has the option to adjust its eligibility standards.
Medicaid is intended to offer health care to individuals with low income across various categories: children, pregnant women, parents, seniors, and individuals with disabilities. With the passage of the Affordable Care Act, adults without children could also be covered if their state accepted the terms of Medicaid Expansion.
It could be the case that you are eligible for Medicaid benefits based on your income and assets. Another way to meet the criteria for Medicaid is to qualify for benefits from one of the Medicare Savings Programs offered through your local Medicaid office. If you are eligible for Medicare and meet the criteria for Medicaid or one the following four programs, you may be dual-eligible.
Qualified Medicare Beneficiary (QMB) ProgramSpecified Low-Income Medicare Beneficiary (SLMB) ProgramQualifying Individual (QI) ProgramQualified Disabled Working Individual (QDWI) Program
Prescription Drugs Costs
Medicaid requires that you sign up for prescription drug coverage through Medicare, whether that be with a Part D plan or a Medicare Advantage plan with prescription drug benefits, also known as an MA-PD plan.
If you partake in the Extra Help program, a low-income subsidy for prescription drug benefits, however, you must enroll in Original Medicare (Parts A and B) and Part D, not a Medicare Advantage plan.
It may be the case that some medications not covered by your Medicare plan will be covered by Medicaid.
Nursing Home Costs
With millions of seniors affected by dementia and other chronic conditions, many people are unable to physically care for themselves. Nursing home care is a benefit that is necessary for many people.
Although Medicare does pay for short stays in skilled nursing facilities after a hospitalization, it does not contribute to long-term nursing care. After qualifying hospital stays in 2022, your Part A benefits will pay for all nursing home expenses up to 20 days. For days 21 to 100, you will pay a copayment of $194.50 per day, and for nursing home stays longer than that, you will pay the full amount.
Medicaid, unlike Medicare, does cover long-term nursing home care. Those who are dual-eligible may use Medicaid to pay for long-term nursing home care. As many as two-thirds of nursing home stays are paid for by Medicaid.
Health Services Not Covered by Medicare
Medicare is not an all-inclusive program. With rare exceptions, Original Medicare (Medicare Part A and Part B) does not cover dental, hearing, and vision screening. That leaves beneficiaries to scramble for dentures, hearing aids, or corrective lenses (contact lenses or eyeglasses). People who decide to enroll in Medicare Advantage (Medicare Part C) may choose a plan that offers coverage for some of these services.
If your state Medicaid program offers these services, you may benefit from the added coverage. Not all states will offer coverage and if they do, it may not be available to everyone who qualifies for Medicaid.
Paying for Your Health Care
Generally speaking, Medicare pays first and Medicaid pays second. What costs Medicare leaves on the table can oftentimes be taken care of by Medicaid. The amount paid by Medicaid, however, has a limit that is set by each state.
Medicare Savings Programs, if you qualify for one, can help cover additional costs.
For those who qualify for the QMB program: Medicaid will pay your Medicare costs, including Part A premiums, Part B premiums, deductibles, coinsurance, and copayments. This is the case even if a Medicare service is not usually covered by Medicaid or if you see a healthcare provider who does not accept Medicaid for payment.
For those who qualify for other Medicare Savings Programs: These programs also reduce out of pocket costs but are not as extensive in their benefits. In this case, states do not have to pay if the Medicare service is not also a Medicaid service or if the beneficiary saw a Medicare provider who is not also a Medicaid provider.
Summary
Medicare is run by the federal government and Medicaid is run by the states. Although they are different programs, millions of people qualify for both. Using these programs together may decrease your overall out-of-pocket healthcare costs, reduce the cost of long-term nursing home care, and may increase the number of services covered.
A Word From Verywell
Don’t assume that because you are on Medicare that you don’t qualify for Medicaid. In fact, for millions of seniors, the exact opposite is true. If you are struggling to make ends meet in your retirement years, look to see if you are also eligible for Medicaid. This may be the most reasonable way to cut your healthcare costs.
