Jane Dotson
Medicare and Medicaid are both government-funded health insurance programs, but they cater to different demographics. Medicare is a federal program for seniors and disabled persons, while Medicaid is a state-federal program for low-income individuals, families, children, pregnant women, the elderly, and people with disabilities. While Medicare is not financially restricted, Medicaid has income and resource limits that vary by state. Individuals who are eligible for both Medicare and Medicaid are called dual eligibles and can receive benefits from both programs. Medicare is the primary source of health insurance coverage for dual-eligible individuals, while Medicaid provides supplemental coverage. Dual-eligible individuals can receive their benefits through traditional Medicare, Medicare Advantage plans, or plans designed specifically for dual-eligible individuals.
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What You'll Learn
Dual eligibility requirements
To be eligible for both Medicare and Medicaid, individuals must meet the eligibility requirements for both programs and be enrolled in both. This is known as being "dual eligible".
Medicare is a federal health insurance program for seniors and disabled persons, and eligibility requirements are consistent across states. To qualify for Medicare, one must be a US citizen or a legal US resident who has resided in the US for at least the preceding five years. One must also be at least 65 years old, or disabled, or have end-stage renal disease, or have Lou Gehrig's disease (amyotrophic lateral sclerosis). There are no income or asset limits for Medicare eligibility.
Medicaid, on the other hand, is a joint federal and state program that helps cover medical costs for certain low-income people, families and children, pregnant women, the elderly, and people with disabilities. The eligibility requirements for Medicaid vary by state, and there are income and asset limits. Generally, to qualify for Medicaid, one must meet the state's rules for income and resources, as well as other rules such as being a resident of the state. Some states allow individuals to “spend down" their income that is above the state's Medicaid limit by paying non-covered medical expenses until their income is lowered to a level that qualifies for Medicaid.
To be considered "dual eligible", individuals must be enrolled in Medicare Part A (hospital insurance) and/or Medicare Part B (medical insurance). As an alternative to Original Medicare (Parts A and B), individuals may opt for Medicare Part C (Medicare Advantage), which is managed by Medicare-approved private insurance companies. To be dual eligible, individuals must also be enrolled in either full-coverage Medicaid or one of Medicaid's Medicare Savings Programs (MSPs). Full-coverage Medicaid covers physician visits, hospital services (inpatient and outpatient), laboratory services, and X-rays.
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Medicare Advantage plans
Most Medicare Advantage plans are either HMOs, which generally cover only care provided by in-network doctors, hospitals, and other health providers, or PPOs, which also offer access to out-of-network providers but at a higher cost. Medicare Advantage enrollees can access providers only through more limited provider networks. All Medicare Advantage plans are required to have such networks for doctors, hospitals, and other providers.
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Medicaid eligibility
Medicaid is a joint federal and state program that provides health coverage to financially needy individuals of any age. It is the single largest source of health coverage in the United States, covering over 77.9 million Americans.
Eligibility for Medicaid is based on financial need, and each state has its own requirements. Generally, to be eligible for Medicaid, you must meet your state's rules for income and resources, and be a resident of the state. Some states have a resource limit, and allow you to "spend down" your income to qualify. Some individuals are exempt from the Modified Adjusted Gross Income (MAGI)-based income counting rules, including those whose eligibility is based on blindness, disability, or age (65 and older).
Medicaid offers benefits not normally covered by Medicare, like nursing home care and personal care services. People who have both Medicare and full Medicaid coverage are “dual eligibles”. Medicare pays first when you’re a dual eligible, and Medicaid pays last, after Medicare and any other health insurance you have.
To be considered dually eligible, persons must be enrolled in Medicare Part A (hospital insurance), and/or Medicare Part B (medical insurance). As an alternative to Original Medicare (Part A and Part B), persons may opt for Medicare Part C (Medicare Advantage). To be dual eligible, persons must also be enrolled in either full-coverage Medicaid or one of Medicaid’s Medicare Savings Programs (MSPs).
There are efforts underway to improve how dual-eligible individuals in Medicare Advantage SNPs receive their Medicare and Medicaid benefits. There have been concerns that separate coverage arrangements make it more difficult for dual-eligible individuals to navigate different coverage rules and provider networks.
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Medicare Part A, B, and C
Medicare is a federal health insurance program for US citizens or legal US residents aged 65 or older, or for those under 65 with certain disabilities or conditions. There are different parts to Medicare, each covering different services.
Medicare Part A
Medicare Part A covers inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. Part A is often referred to as "hospital insurance". Most people are not charged a monthly premium for Part A. However, for those who do, the monthly premium cost in 2025 will be $518. People who have worked but not met the full work requirements can purchase Part A at a reduced rate of $285 per month. Part A is free for those who have worked and paid Medicare taxes for at least 10 years, or in some cases, because of their spouse's work.
Medicare Part B
Medicare Part B is medical insurance. Enrollees must pay a monthly premium of $185 and an annual deductible of $257. Most people pay a monthly premium for Part B, the amount of which depends on their income level.
Medicare Part C
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare (Part A and Part B). It is a bundled plan that includes Part A, Part B, and usually Part D. Medicare Advantage plans are run by private insurance companies that follow rules set by Medicare. These plans offer different rules, costs, and coverage restrictions that can affect how and when you receive care. To enroll in a Medicare Advantage plan, you must already be enrolled in Medicare Parts A and B.
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Coordination of benefits
Medicare and Medicaid are often confused, but there are distinct differences between the two. Medicare is a federal health insurance program for seniors and disabled persons with no financial restrictions. On the other hand, Medicaid is a state and federal medical assistance program for low-income people, families, children, pregnant women, the elderly, and people with disabilities.
Some individuals are eligible for both Medicare and Medicaid and are called "dual eligibles". To be considered a dual eligible, a person must be enrolled in Medicare Part A (hospital insurance) and/or Medicare Part B (medical insurance). They must also be enrolled in either full-coverage Medicaid or one of Medicaid's Medicare Savings Programs (MSPs).
In the case of dual eligibles, Medicare is typically the primary payer, and Medicaid is the secondary payer. However, there are concerns that the benefits for dual eligibles are poorly coordinated, leading to lower-quality care and higher costs. Efforts are being made to improve the coordination of benefits for dual eligibles, such as the Financial Alignment Initiative authorized under the Affordable Care Act.
The Centers for Medicare and Medicaid (CMS) have also implemented changes, such as requiring FIDE SNPs to provide all Medicare and some Medicaid benefits under the same parent organization starting in 2021. From 2025, CMS will require FIDE SNPs to have exclusively aligned enrollment, meaning dual eligibles will receive their Medicare and Medicaid benefits from the same organization.
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Frequently asked questions
Dual coverage, or dual eligibility, means that an individual is enrolled in both Medicare and Medicaid. Medicare is the primary source of health insurance coverage, and Medicaid provides supplemental coverage.
Medicare is a federal health insurance program for seniors and disabled persons with no financial restrictions. Medicaid is a state and federal program that helps cover medical costs for low-income people, families, children, pregnant women, the elderly, and people with disabilities.
To be considered dually eligible, a person must be enrolled in Medicare Part A (hospital insurance) and/or Medicare Part B (medical insurance). Additionally, they must be enrolled in either full-coverage Medicaid or one of Medicaid's Medicare Savings Programs (MSPs).
Dual coverage provides a range of services and financial support to meet the diverse needs of the individual. Medicare Advantage plans, for example, can provide access to doctors who do not accept Medicaid payments. Medicaid also covers some drugs and services that Medicare does not.
