Jane Dotson
Medicaid is a federal-state programme that assists specific low-income people, families, children, pregnant women, the elderly, and people with disabilities in covering medical expenses. It can serve as both a primary and secondary insurer, and some people are enrolled in both Medicaid and Medicare at the same time, being referred to as dual eligible. When an individual has employer-based or other private commercial insurance, Medicaid acts as the payer of last resort, meaning that it will be the last plan to contribute to a medical bill. This raises the question of whether secondary health insurance is necessary when one has Medicaid, and if so, how it works.
| Characteristics | Values |
|---|---|
| Number of Americans covered by Medicaid | 72 million |
| Medicaid as secondary insurance | Works with other insurance coverage options, including Medicare, marketplace insurance plans, and employer-provided health insurance |
| Medicaid as primary payer | Pays up to the limits of its coverage, then sends the rest of the balance to the secondary payer |
| Medicaid beneficiaries | Have better access to care than uninsured people, are less likely to postpone or go without needed care due to cost, and have comparable access to people with private insurance |
| Medicaid coverage | Services required by federal law, optional benefits like prescription drugs and home care, non-emergency medical transportation, and comprehensive benefits for children |
| Medicaid financing | Jointly financed by states and the federal government but administered by states within broad federal rules |
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What You'll Learn
Medicaid as a secondary payer
Medicaid is the primary program providing comprehensive health and long-term care coverage to around 83 million low-income people in the United States. It accounts for one-fifth of healthcare spending and more than half of spending on long-term care. Medicaid is jointly financed by states and the federal government but administered by states within broad federal rules.
Medicaid interacts with other payers when beneficiaries have other sources that are legally liable for the payment of their medical costs. These may include private insurance, Medicare, other public programs, workers' compensation, and amounts received for injuries in liability cases. The program also interacts with the State Children's Health Insurance Program (CHIP) when states provide Medicaid coverage to beneficiaries using CHIP funds.
In most cases, Medicaid acts as the payer of last resort for most services. Under the program's third-party liability (TPL) rules, other legally responsible sources are generally required to pay for medical costs incurred by a beneficiary before the Medicaid program will do so. As a condition of eligibility, Medicaid enrollees must identify potential third-party sources of coverage and assign the Medicaid agency the right to pursue third-party liability on their behalf.
Coordination of Benefits (COB) refers to the activities involved in determining Medicaid benefits when an enrollee has coverage through an individual, entity, insurance, or program that is liable to pay for healthcare services. For example, if a beneficiary has employer-provided health insurance, they can keep Medicaid as secondary insurance. In this case, the primary payer pays up to the limits of its coverage and then sends the remaining balance to the secondary payer.
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Medicaid's role as the payer of last resort
Medicaid is the primary program providing comprehensive health and long-term care coverage to around 83 million low-income people in the United States. It accounts for one-fifth of healthcare spending and more than half of spending on long-term care. Medicaid is jointly financed by states and the federal government but is administered by states within broad federal rules.
Medicaid is generally the payer of last resort. This means that if a Medicaid enrollee has another source of health care coverage, that source is expected to pay its share before Medicaid pays. Federal regulations refer to amounts owed by non-Medicaid payers as third-party liability (TPL).
States have encountered several challenges in their efforts to meet TPL requirements, including:
- Difficulties obtaining complete, accurate, and up-to-date coverage information from Medicaid enrollees and providers.
- Difficulties obtaining timely and reliable coverage information from third parties.
- Technical issues related to third-party coverage information received and electronic billing of Medicaid claims with third parties.
- Lack of federal prompt payment requirements and penalties for third parties that do not cooperate with states' efforts to meet TPL requirements.
- Difficulties coordinating TPL with out-of-state third parties, TRICARE (the U.S. military's healthcare program), and Medicare.
Despite these challenges, Medicaid plays a crucial role in ensuring access to care for low-income individuals and families. Research shows that Medicaid beneficiaries have better access to care than uninsured individuals, and Medicaid eligibility during childhood is associated with positive health outcomes.
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Medicaid eligibility criteria
Medicaid is a joint federal and state program that provides health coverage to over 77.9 million Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. It is the single largest source of health coverage in the United States. Eligibility for Medicaid depends on a combination of factors, including income, family size, age, pregnancy or parenting status, and citizenship.
Firstly, to be eligible for Medicaid, individuals must meet certain non-financial criteria. They must be residents of the state in which they are receiving Medicaid and must be either citizens of the United States or certain qualified non-citizens, such as lawful permanent residents. Additionally, some eligibility groups are limited by age or by pregnancy or parenting status.
Secondly, income is a significant factor in determining eligibility for Medicaid. It is a program for low-income individuals whose income and resources are below certain levels. The Affordable Care Act established a new methodology for determining income eligibility based on Modified Adjusted Gross Income (MAGI). MAGI considers taxable income and tax filing relationships to determine financial eligibility. Income levels in relation to the federal poverty level vary for different groups. For infants up to one year of age and pregnant individuals, the income level is 223% of the federal poverty level, while for children one year of age through 18 years of age, it is 154%. These income levels are subject to yearly adjustments.
It is important to note that eligibility rules differ among states, and some states have expanded their Medicaid programs to cover a wider range of individuals. In general, Medicaid gives health coverage to some individuals and families, including children, parents, pregnant women, elderly people with certain incomes, and people with disabilities. Certain states may also have additional options for coverage, such as individuals receiving home and community-based services and children in foster care.
Finally, individuals who are blind or disabled but do not meet the MAGI eligibility criteria may still be eligible for Medicaid. They can apply at their Local Department of Social Services (LDSS), where a referral will be made to the State Disability Review Unit (SDRU) to determine if they meet the disability criteria.
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Medicaid's benefits and coverage
Medicaid is a federal-state programme that provides comprehensive health and long-term care coverage to low-income individuals, families, children, pregnant women, the elderly, and people with disabilities in the United States. While all states are required to provide some Medicaid benefits, the specific benefits and coverage offered vary across states.
Medicaid benefits can be categorised into mandatory and optional benefits. Prescription drugs, vision services, dental care, and most home care are among the optional benefits covered by all states. Other optional benefits include case management, physical therapy, and occupational therapy. In recent years, states have expanded coverage to include behavioural health services, addressing social determinants of health, such as nutrition and housing.
Mandatory benefits refer to those that all states are required to provide by law. These benefits include comprehensive coverage, early and periodic screening, diagnostic and treatment services, and hospice benefits. Additionally, all states must provide uninterrupted Medicaid coverage to former foster children until they turn 26, provided they received Medicaid benefits when they turned 18.
Medicaid coverage is based on financial need, and eligibility requirements vary by state. Factors such as income, household size, family status, disability, age, and other criteria may be considered. Individuals with limited Medicaid coverage can apply for full-benefit coverage through Medicaid or a Marketplace insurance plan, which offers savings based on income. However, it is important to note that a Marketplace health plan typically costs more and may not provide additional benefits.
Medicaid also coordinates with other insurance programmes, such as Medicare. Individuals with both Medicare and full Medicaid coverage are considered "dually eligible." In such cases, Medicare pays first for Medicare-covered services, while Medicaid may cover additional costs, such as prescription drugs that Medicare does not cover.
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Medicaid and Medicare coordination
Medicaid and Medicare can work together for individuals eligible for both programs, known as "dual eligible" beneficiaries. The Federal Coordinated Health Care Office, or the Medicare-Medicaid Coordination Office, ensures that these individuals have seamless access to high-quality healthcare.
Medicaid can act as a secondary insurer, coordinating with other health insurance coverage options, including Medicare, marketplace insurance plans, and employer-provided health insurance. In such cases, the "primary payer" pays up to the limits of its coverage, then sends the remaining balance to the "secondary payer." This is referred to as "third-party liability" (TPL), where the primary payment for care falls on any available third-party resources before Medicaid.
Coordination of Benefits (COB) refers to the process of determining Medicaid benefits when an enrollee has additional coverage. For example, if an individual has primary insurance that does not cover all the costs of a service, their Medicaid coverage may pay the remaining costs as the secondary payer. However, some providers may refuse to see patients with Medicaid, regardless of whether their commercial insurance would cover the costs.
The Medicare-Medicaid Coordination Office aims to improve dual eligible individuals' understanding of their coverage and simplify the processes for accessing their entitled benefits. They also work to eliminate regulatory conflicts between Medicare and Medicaid rules and improve care continuity.
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Frequently asked questions
Secondary health insurance is an additional insurance plan that covers any medical costs that your primary insurance does not.
Medicaid can act as the "payer of last resort", meaning it will cover any remaining costs that your primary insurance does not. This is referred to as "third-party liability" (TPL).
Eligibility for Medicaid varies by state and is often dependent on income and resources. Some people are eligible for both Medicare and Medicaid and are referred to as "dual eligibles".
Medicaid offers benefits not normally covered by other insurance, like nursing home care and personal care services. It may also cover copayments and coinsurances.
