If you’re over 65, you qualify for Medicare, a federally funded program that also covers those under 65 with certain disabilities. For those who need additional assistance, they are eligible for Medicaid, a state-administered program for low-income individuals. But there are millions of people who qualify for both programs, as Medicaid offers critical support for Medicare beneficiaries with limited incomes, helping to ease the financial burden of health care costs.
But it’s not always easy to navigate the two programs simultaneously.
“Dual eligibles deal with a highly complex system, with Medicare covering medical and pharmacy needs, while Medicaid addresses costs, like premiums, copays and long-term care,” says Eric Roberts, an associate professor at the University of Pennsylvania’s Perelman School of Medicine and senior fellow at the Leonard Davis Institute of Health Economics. “This intricate overlap creates challenges in coordinating care, ensuring coverage and managing costs for a vulnerable population with significant health and financial needs.”
Who Are Dual Eligibles?
In 2023, more than 13 million individuals were eligible for both Medicare and Medicaid. There are two main types of dual-eligible beneficiaries:
— Full-benefit beneficiaries: Eligible for Medicaid coverage for health care services that Medicare does not cover
— Partial-benefit beneficiaries: Eligible for Medicaid, but receive restricted benefits, often to cover specific costs, such as Medicare Part A or Part B premiums, deductibles and copayments
Nearly three-quarters of dual eligibles are “full-benefit” enrollees who receive comprehensive Medicaid services, including long-term care not covered by Medicare. The remaining “partial-benefit” enrollees receive assistance primarily for Medicare premiums and cost-sharing.
Despite representing a small portion of overall beneficiaries, dual eligibles account for a disproportionate share of both Medicare and Medicaid spending, with an estimated 33% of traditional Medicare and 32% of Medicaid expenditures. This higher spend results from individuals with multiple chronic conditions, disabilities and complex health and social support needs.
Dual-eligibles represent a diverse population, including:
— Older adults with limited financial resources (47%)
— Individuals with disabilities (37%)
— Younger people unable to work due to health impairments (38% under age 65)
— Individuals facing complex health needs (26% have five or more chronic conditions)
— Diagnosed with Alzheimer’s disease or other dementias (11%)
— Physical limitations (50% have at least one limitation in activities of daily living)
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How to Qualify for Medicare
Medicare and Medicaid eligibility are handled and determined separately.
You automatically qualify for Medicare at age 65 if you’re already receiving benefits from Social Security. Most beneficiaries sign up during the initial enrollment period that starts three months before the 65th birthday and ends three months afterwards.
You may also qualify to receive Medicare benefits regardless of age if you have a disability that prevents you from working and are receiving Social Security disability benefits, if you live with end-stage renal disease or have amyotrophic lateral sclerosis (ALS).
Medicare beneficiaries typically apply for benefits just once.
When the time comes to apply for Medicare or Medicaid, follow these steps:
— Applying for Medicare: Enroll online through the Social Security Administration’s website, by calling them at 800-772-1213 or visiting a local Social Security office in person. The Social Security website has a “Find an Office” tool that will help you locate the nearest office.
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How Do Medicare Beneficiaries Become Eligible for Medicaid?
Medicare beneficiaries can become eligible for Medicaid if they meet specific income and asset requirements set by their state:
— Income limits: To qualify for Medicaid, beneficiaries must have income that is below a certain level that varies by states. Individuals must have an income at or below 100-138% of the federal poverty level to qualify.
— Asset limits: Medicaid also considers assets, or “resources,” which may include savings, property and investments. The asset limits are typically lower than the income limits. For example, in many states, individuals must have assets below $2,000 for an individual or $3,000 for a couple, though some states may allow higher limits or exclude certain assets, such as a primary home.
— Level of need: Some Medicaid benefits, like long-term care or home- and community-based services, may require an assessment of functional limitations or medical necessity.
Depending on income levels, individuals may qualify for different programs that assist with Medicare expenses, such as premiums, deductibles and copayments.
These programs include:
— Qualified Medicare beneficiary (QMB) program: For individuals with incomes at or below 100% of the Federal Poverty Level (FPL). Medicaid helps cover Medicare premiums, deductibles, coinsurance, and copayments.
— Specified low-income Medicare beneficiary (SLMB) program: For individuals with incomes between 100% and 120% of the FPL. Medicaid pays for Medicare Part B premiums only.
— Qualifying individual (QI) program: For individuals with incomes between 120% and 135% of the FPL. Medicaid also pays for Medicare Part B premiums, but funding is limited and provided on a first-come, first-served basis.
— Qualified disabled and working individual (QDWI) program: For certain disabled individuals with incomes up to 200% of the FPL, Medicaid covers Medicare Part A premiums.
How to apply for Medicaid
Applying for Medicaid involves determining eligibility and submitting an application through your state’s Medicaid office. Use tools like the Medicaid eligibility checker on HealthCare.gov
or your state’s Medicaid website to see if you qualify.
“I strongly encourage people to plan ahead for long-term care and not wait until they run out of money in retirement and then apply for Medicaid,” says Kenton Johnston, an associate professor of medicine at Washington University in St. Louis School of Medicine. “Most states have very strict income and asset limit requirements in place that prevent people from using Medicaid instead of their own assets to cover long-term care, including preventing them from transferring those assets to family members and then applying.”
[READ: What Medicare Does Not Cover.]
Overlapping Coverage
One of the biggest challenges for dual-eligible individuals is understanding whether Medicare or Medicaid pays for specific medical equipment or services.
In most cases, Medicare serves as the primary health insurer, covering medical care and pharmacy needs. Medicaid complements Medicare by covering premiums, copayments and the costs of long-term care in Medicaid-certified nursing homes. Occasionally, both programs cover the same services or equipment, creating additional confusion.
“I’ve heard some dual eligibles who have gone to Medicaid to get their wheelchair covered, it gets denied, and they are told to talk to Medicare about it first,” Roberts explains. “The opposite happens as well with dual eligibles going to Medicare first and then being told to reach out to Medicaid first for wheelchair coverage. Unfortunately, the burden is often on the individual to be persistent with both programs to get the right coverage. That’s challenging, especially for a population with such complex needs.”
The following services and equipment may be covered by both Medicare and Medicaid, including:
— Durable medical equipment (DME): This includes wheelchairs, walkers, hospital beds, oxygen equipment and prosthetics. Medicare typically pays first if the equipment is deemed medically necessary, while Medicaid may cover remaining copayments or items not fully covered by Medicare.
— Home health care services: This includes skilled nursing, physical therapy, occupational therapy and speech-language pathology services provided at home. Medicare covers short-term, medically necessary care, while Medicaid may provide additional long-term care services or cover costs not paid by Medicare.
— Mental health services: This includes inpatient and outpatient mental health care, therapy and counseling. Medicare generally covers treatment under Part A and Part B, while Medicaid may offer enhanced or longer-term mental health services.
— Preventive and screening services: This includes vaccines, mammograms and diabetes screenings. Medicare pays first for these services, and Medicaid may cover additional screenings or copayments.
— Nursing home and skilled nursing facility (SNF) care: This includes short-term rehabilitation in a skilled nursing facility and long-term custodial care. Medicare covers short-term rehabilitation, up to 100 days, while Medicaid covers long-term care if the individual qualifies financially.
— Prescription drugs: Medicare Part D (prescription drug coverage) covers most prescription drugs, but Medicaid may cover additional medications not included in the Part D formulary or help with costs like premiums and deductibles.
Medicare Advantage Dual Eligible Plans
For dual eligibles, Medicare Advantage offers specific plans, called Dual Eligible Special Needs Plans (D-SNPs). First authorized under a 2003 federal measure, these plans now operate in 45 states and the District of Columbia, enrolling approximately 3.8 million dually eligible beneficiaries.
D-SNPs combine Medicare Part A and Part B and often Part D into a single plan. They also include extra benefits, including dental and vision services, and provide care coordination tailored to meet the unique needs of dual-eligible beneficiaries. Medicaid will cover services Medicare doesn’t, such as long-term care as well as premiums, copayments and deductibles. Sometimes, a D-SNP and Medicaid will both cover benefits, like dental and vision services.
Although Medicare is supposed to pay for a benefit before Medicaid, dual coverage of similar benefits can create confusion for individuals.
How to Remain Dual Eligible
Remaining dual eligible for both Medicare and Medicaid requires meeting the financial and program-specific criteria for each program. Once enrolled, Medicare coverage is permanent, but Medicaid requires annual re-enrollment or renewal.
“The process ensures that beneficiaries still meet the eligibility requirements, particularly by verifying income and asset levels,” Roberts says. “The re-enrollment process and timing varies by state.”
Medicaid beneficiaries are required to keep countable assets like savings, investments or secondary properties within the state’s limits.
State and Community Resources on Dual Eligibility
Choosing a Medicare and Medicaid plan is highly complex, and most people will need navigational assistance. It is crucial to understand whether your physicians and health care providers are in-network at the Medicare and Medicaid plans you choose.
“For people with a lot of health care needs, navigating prior authorization programs in Medicaid can be especially burdensome,” Johnston says. “Having a family member, friend or support from a local community organization in this process is very helpful.”
Johnston adds that there are several state-level resources available to help individuals navigate the complexities of dual eligibility for Medicare and Medicaid.
These organizations include:
— Administration for Community Living (ACL): The ACL is a federal agency that works to promote the well-being and independence of older adults and individuals with disabilities. Through partnerships with state and local organizations, the ACL ensures access to resources and services that can assist with understanding and applying for dual eligibility programs.
— Area Agencies on Aging (AAA): Area Agencies on Aging are community-based organizations that offer support tailored to older adults. They provide a wide range of services, including assistance with Medicare and Medicaid enrollment, understanding benefits, and connecting individuals to local resources. These agencies can be especially helpful for navigating the eligibility requirements for dual programs.
— State Health Insurance Assistance Program (SHIP): SHIPs are free counseling programs available in every state, designed to help Medicare beneficiaries understand their coverage options. SHIP counselors provide unbiased, one-on-one assistance with topics like Medicare benefits, Medicaid dual eligibility, enrollment processes and resolving billing issues. SHIP services are particularly valuable for those who need help coordinating the benefits of both programs.
Bottom Line
Currently, there is no single system that combines Medicare and Medicaid plans for dual-eligible beneficiaries. Instead, they must navigate both programs separately to maximize their benefits and receive essential health benefits provided by both programs.
“Under the current system, there is this unintended issue where it’s like having two insurance cards that don’t talk to each other,” Roberts says.
As a result, dual eligibles can face difficulties working with two different insurance programs, but by understanding out-of-pocket costs, services across different programs and extra benefits, like dental and vision services, beneficiaries can be better equipped to navigate the complex system to receive the care they need.
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