Qualifying for Medicare hardly means free health care -- there are still premiums and deductibles. However, people who qualify for both Medicare and Medicaid (called “dual eligibility”) receive help paying their out-of-pocket costs.
Medicare is a federal program available to anyone 65 or older. It consists of four major parts, each of which have premiums and co-pays associated with them:
- Part A covers hospital stays and some limited nursing home stays
- Part B covers office visits, physician fees, medical equipment, home care, and preventative services
- Part C (called Medicare Advantage) permits Medicare beneficiaries to receive Part A and B benefits from private insurance companies
- Part D covers prescription medications
Medicaid is a joint federal and state program that provides health insurance to low-income adults, children, and people with disabilities. It is also the primary method of paying for nursing home care. To qualify for coverage, applicants must have limited assets and income.
To be considered dually eligible, beneficiaries can be enrolled in either Medicare and full Medicaid or in Medicare and one of Medicaid’s Medicare Savings Programs. Medicare Savings Programs are state programs, run through Medicaid, that provide help paying for Medicare premiums. When Medicare and Medicaid coverage overlap, Medicare always pays for the services first. If Medicare doesn’t cover the full cost, then Medicaid may cover the remaining cost. Medicaid may also cover some costs that Medicare does not cover, like long-term nursing home care.
The benefits available to dual eligible beneficiaries depend on which Medicaid program the beneficiary is enrolled in:
- Full Medicaid. Beneficiaries receive full Medicaid coverage. Because Medicaid is a state-run program, additional benefits can vary by state. Some states may pay Medicare’s Part B premiums. In addition, beneficiaries do not have to pay more than the amount allowed under the state’s Medicaid program for services by Medicare providers.
- Qualified Medicare Beneficiary (QMB) Program. Beneficiaries receive help paying Part A and Part B premiums, deductibles, coinsurance, and copayments.
- Specified Low-Income Medicare Beneficiary (SLMB) Program: Beneficiaries receive help paying Part B premiums.
- Qualifying Individual (QI) Program: Beneficiaries receive help paying Part B premiums but help is limited on a first-come, first-served basis.
- Qualified Disabled Working Individual (QDWI) Program. Pays Part A premiums for certain disabled and working beneficiaries under 65 who meet certain income and resource limits set by their state.
Medicaid Planning Strategies