Most Americans understand that when they turn 65, Medicare will become their main health insurance plan. However, many Americans are less familiar with another health care program, Medicaid, and what it means if they are eligible for both Medicare and Medicaid. If you are dual eligible, Medicaid may pay for your Medicare out-of-pocket costs and certain medical services that aren’t covered by Medicare.
What is Medicaid?
Like Medicare, Medicaid is a health care coverage program funded by the federal government. It was established to help low-income individuals access health care coverage. Unlike Medicare, however, Medicaid is partially funded by state governments. This means that states have the flexibility to design their Medicaid programs to best meet the needs of their residents as long as the program meets the minimum federal guidelines. As a result, Medicaid eligibility, services, and cost-sharing1 policies will vary state-by-state, while the Medicare program is consistent across all states.
How do I know if I qualify for Medicaid and Medicare?
Over 10 million individuals are currently enrolled in both Medicaid and Medicare.2 These individuals are known as “dual eligible beneficiaries” because they qualify for both programs. As long as you meet the federal qualifications for Medicare eligibility and the state-specific qualifications for Medicaid eligibility, you will qualify as a dual eligible. To qualify for Medicare, individuals generally need to be 65 or older; or have a qualifying disability; or be diagnosed with End-Stage Renal Disease.
There are several levels of assistance an individual can receive as a dual eligible beneficiary. The term “full dual eligible” refers to individuals who are enrolled in Medicare and receive full Medicaid benefits. Individuals who receive assistance from Medicaid to pay for Medicare premiums or cost sharing are known as “partial dual eligible”.
Full dual eligible coverage: Qualifications for Medicaid vary by state, but, generally, people who qualify for full dual eligible coverage are recipients of Supplemental Security Income (SSI). The SSI program provides cash assistance to people who are aged, blind, and disabled to help them meet basic food and housing needs. The 2016 income eligibility limit for SSI is roughly $733 per month for an individual and $1,100 per month for a couple.1 Additional assets are limited to $2,000 for an individual and $3,000 for a couple. Qualifying assets typically include things like checking and savings accounts, stocks, real estate (other than your primary residence), and vehicles if you own more than one.
Partial dual eligible coverage: Individuals who are partial dual eligible typically fall into one of the following four “Medicare Savings Program” (MSP) categories.
|Qualified Medicare Beneficiary (QMB) Program||Income less than 100% of the federal poverty level (FPL):
|Helps pay for Part A and/or Part B premiums, deductibles, coinsurance, and copayments|
|Specified Low-Income Medicare Beneficiary (SLMB) Program||Income between 100% and 120% FPL
|Helps pay for Part B premiums|
|Qualifying Individual (QI) Program||Income between 120% and 135% FPL
|Helps pay for Part B premiums|
|Qualified Disabled Working Individual (QDWI) Program||Income less than 200% FPL
|Pays the Part A premium for certain people who have disabilities and are working|
Note: Income levels differ for Alaska and Hawaii.
Asset limits are determined at any point in time. For example, at application, eligibility determination, and eligibility redetermination.
Federal law defines income and resource standards for full Medicaid and partial dual eligible categories, but states have the option to raise those limits above the Federal minimum standard.
Assets (resources) are different from income and can include things like cash, bank accounts, investments, and property.
The following graphic illustrates how these MSP categories relate to the different Medicare programs.
Your state’s Medicaid eligibility office will help you determine which program you are eligible for and if there are any additional state-specific programs available.
What does Medicare and Medicaid pay for?
Medicaid is known as the “payer of last resort.” As a result, any health care services that a dual eligible beneficiary receives are paid for first by Medicare, and then by Medicaid. For full dual eligible beneficiaries, Medicaid will cover the cost of care of services that Medicare does not cover or only partially covers (as long as the service is also a Medicaid-covered service). Such services may include, but are not limited to:
- Nursing home care
- Care at an intermediate care facility
- Long-term institutional care
- Home health services
- Personal care services (available in some states)
- Other home and community based services
- Transportation services
- Dental services (available in some states)
- Eye examinations for prescription glasses (available in some states)
The financial assistance provided to partial dual eligible beneficiaries is outlined in Figure 2.
What are my options for receiving care as a dual eligible?
People who qualify as dual eligible have several options for how their care is delivered, although the number of available options will vary at the state level.
Original Medicare: Some Medicare beneficiaries may choose to receive their services through the Original Medicare Program. In this case, they receive the Part A and Part B services directly through a plan administered by the federal government which pays providers on a fee-for-service (FFS) basis. In this case, Medicaid would “wrap around” Medicare coverage by paying for services not covered by Medicare or covering premium and cost sharing payments depending on whether the beneficiary is a full or partial dual eligible.
Medicare Advantage: Medicare Advantage plans are private insurance health plans that provide all Part A and Part B services. Many also offer prescription drug coverage and other supplemental benefits. Similar to Original Medicare, Medicaid wraps around the services provided by the Medicare Advantage plan and serves as a payer of last resort.
Medicaid Managed Care: Some states deliver care to the dual eligible population through Medicaid managed care programs or have established Medicaid managed care plans specific to the dual eligible population. Medicaid managed care is similar to Medicare Advantage in that states contract with private insurance health plans to manage and deliver the care. In some states, the Medicaid managed care plan is responsible for coordinating the Medicare and Medicaid services and payments, while in other states the payments related to Medicaid and Medicare are handled at the state/federal level and the Medicaid managed care plan is only responsible for coordinating Medicaid services.
Dual Eligible Special Needs Plans (D-SNP): Dual eligible beneficiaries may have the option of enrolling in a D-SNP in some states. These plans are specially designed to coordinate the care of dual eligible enrollees. Some plans may also be designed to focus on a specific chronic condition, such as chronic heart failure, diabetes, dementia, or End-Stage Renal Disease. These plans often include access to a network of providers who specialize in treating that condition as well as include a prescription drug benefit that is tailored to the condition.
Programs of All-Inclusive Care for the Elderly (PACE): Similar to D-SNPs, PACE plans provide medical and social services to frail and elderly individuals (most of whom are dual eligible). PACE operate through a “health home” type model, where an interdisciplinary team of health care physicians and other providers work together to provide coordinated care to their patients. PACE plans also focus on helping enrollees receive care in their homes or in the community and avoid nursing homes or other long-term care institutions.
Which plan should I choose?
Programs and plans may be limited depending on your state and service area. Additional programs may also be available. If you’re looking to learn more about what type of plan is right for you, feel free to contact our licensed insurance agents at 855-802-1206. They can answer your questions and direct you to your state’s Medicaid eligibility office for an official Medicaid eligibility determination. We are available to help you find a plan that meets your needs and is in your budget. You can call us from 6am to 7pm MT, Monday to Friday and 7am to 5pm MT on Saturday. We are closed on Sunday.
1 Cost sharing is the amount of your health care that you pay out of your own pocket. Typically, this includes costs like deductibles, coinsurance, and copayments.
4 Dual Eligible Beneficiaries Under Medicare and Medicaid Programs, Department of Health and Human Services, Centers for Medicare and Medicaid Services (February 2016).