Paul Sanchez
Medicaid is a federal-state program that helps cover medical costs for people with limited incomes and resources. Eligibility rules vary by state, and beneficiaries must identify third-party sources of coverage. When an individual has Medicaid and other insurance, each type of coverage is called a payer. Medicaid often acts as the payer of last resort, with other sources paying up to their coverage limits first. In some cases, Medicaid may cover services and drugs that other insurance doesn't, and it can provide additional benefits like non-emergency medical transportation and comprehensive services for children.
| Characteristics | Values |
|---|---|
| Medicaid eligibility criteria | Limited income and resources |
| Medicaid coverage | Non-emergency medical transportation, prescription drugs, vision services, dental care, home care, and long-term care |
| Medicaid interaction with other payers | When beneficiaries have other legally liable sources for medical costs, e.g., private insurance, Medicare |
| Medicaid as a payer | Primary or secondary payer, depending on coverage limits of other insurance |
| Medicaid beneficiaries' responsibility | Identify potential third-party sources of coverage and assign the Medicaid agency to pursue third-party liability |
| Medicaid and Medicare | People with both are "dually eligible"; Medicare pays first for Medicare-covered services, and Medicaid pays last |
| Medicaid and private insurance | May make arrangements for private plans to pay providers for Medicaid-covered services |
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What You'll Learn
Medicaid and Medicare: Dual eligibility and payment order
Medicaid and Medicare are two different government-funded healthcare programs. Medicare is a federal program, and eligibility is consistent across states. To be eligible for Medicare, one must be a U.S. citizen or a legal U.S. resident for at least 5 years before applying. Additionally, one must be at least 65 years old, have a qualifying disability, or have end-stage renal disease or Lou Gehrig's disease.
Medicaid, on the other hand, is a joint federal and state program that helps cover medical costs for certain low-income individuals, families, children, pregnant women, the elderly, and people with disabilities. The rules around eligibility for Medicaid vary across states, with each state setting its own requirements within federally set parameters. Generally, applicants must meet their state's rules for income and resources and be residents of the state.
If a person is eligible for both Medicare and Medicaid, they are considered "dually eligible." To be dually 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).
When a person is dually eligible, Medicare typically pays for health services first, and then Medicaid covers any remaining costs up to its payment limits. If a person chooses to join a Medicare Advantage Plan, there are special plans for dual eligibles that may offer additional benefits and lower costs. These plans may include Medicare drug coverage (Part D) and programs such as the Program of All-Inclusive Care for the Elderly (PACE) that help individuals receive care outside of a nursing home.
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Medicaid as the payer of last resort
Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. The rules around who is eligible for Medicaid differ across states.
Medicaid is generally the "payer of last resort". This means that if an enrollee has another source of health care coverage, that source must pay its share before Medicaid pays. Federal regulations refer to amounts owed by non-Medicaid payers as "third-party liability" (TPL). By law, all other sources of coverage must pay claims under their policies before Medicaid will pay for the care of an eligible individual. This requirement is implemented by federal rules that require states to take reasonable measures to identify potentially liable third parties and process claims accordingly. Medicaid enrollees must also cooperate with state efforts to pursue other sources of coverage.
Several challenges have been identified in state efforts to meet TPL requirements. These include difficulties in obtaining complete, accurate, and up-to-date coverage information from enrollees and providers, as well as issues coordinating TPL with out-of-state third parties and with specific programs like TRICARE (the US military health care program).
If a Medicaid enrollee has another source of health care coverage, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage and then sends the rest of the balance to the "secondary payer". If an enrollee has Medicare and full Medicaid coverage ("dual eligibility"), Medicare pays first for Medicare-covered services. Medicaid pays last, after Medicare and any other health insurance.
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Medicaid and private insurance: Wrap-around coverage
Medicaid and private insurance wrap-around coverage is a complex topic, and there are ongoing discussions and legislative proposals surrounding it. Here is some information on what wrap-around coverage is and how it works:
Medicaid and Private Insurance Wrap-Around Coverage:
Medicaid premium assistance programs allow individuals to use Medicaid funds to purchase private health insurance as an alternative to receiving coverage directly through the state Medicaid program. This approach is known as "wrap-around coverage" or "premium assistance." This has been an option for a long time, but it is not widely used and has seen low enrollment. One reason for the low uptake is that relatively few Medicaid enrollees can afford or access private coverage. For example, in eight states with pre-ACA premium assistance programs surveyed in 2014, enrollment ranged from 93 people in Nevada to over 26,000 in Texas.
When an individual has both Medicaid and private insurance, each type of coverage is called a "payer." The "primary payer" pays up to the limits of its coverage and then sends the remaining balance to the "secondary payer." Wrap-around benefits can add complexity for beneficiaries, providers, and states. This is especially true when broad benefits, such as EPSDT, are involved, as they may not be fully included in private coverage.
State Implementation and Challenges:
States have shown interest in Medicaid premium assistance models, but there is limited data on how well these programs work. Some states, like Indiana, have discontinued their programs due to low utilization and high administrative burdens. Arkansas has also faced challenges, with reports that beneficiaries struggle to access certain benefits provided under their Medicaid wrap coverage.
Legislative Proposals:
There have been recent reports of potential new funding to help states fill gaps in private coverage for people who lose Medicaid coverage. These funds would be made available through Section 1115 waivers and would use Medicaid to subsidize or "wrap around" private insurance. However, it is unclear if these funds will make up for the anticipated loss of federal expansion funding.
In conclusion, while Medicaid and private insurance wrap-around coverage has been an option for a while, it is not widely utilized, and there are complexities and challenges associated with its implementation. Legislative proposals aim to address funding gaps, but it remains to be seen if they will sufficiently mitigate the impact of federal funding cuts.
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Medicaid eligibility and third-party liability
Medicaid beneficiaries can have one or more additional sources of coverage for healthcare services. Third-Party Liability (TPL) refers to the legal obligation of third parties (insurers or programs) to pay part or all of the expenditures for medical assistance under a Medicaid state plan. TPL administration and performance activities are generally set by the state and should be accompanied by state oversight.
Coordination of Benefits (COB) refers to the activities involved in determining Medicaid benefits when an enrollee has coverage through a third party that is liable to pay for healthcare services. Individuals eligible for Medicaid assign their rights to third-party payments to the State Medicaid Agency. States are required to take all reasonable measures to identify potentially liable third parties and process claims accordingly. This includes gathering information about other sources of health coverage when individuals apply for medical assistance and conducting data matches to identify third-party resources.
Medicaid is typically the payer of last resort, meaning that all other sources of coverage, including Medicare and private health insurance carriers, must pay claims under their policies before Medicaid will pay for the care of an eligible individual. This is implemented through the Medicaid TPL requirements, which are governed by Medicaid statute and regulation. Federal rules require states to identify potentially liable third parties and process claims accordingly, with Medicaid enrollees cooperating in these efforts.
Having other insurance does not affect Medicaid eligibility. In most cases, other insurance will pay providers before Medicaid, and Medicaid can only be billed for the amount that other insurance does not cover.
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Medicaid and access to certain providers
Medicaid is a federal-state program that helps cover medical costs for people with limited incomes and resources. The eligibility criteria and coverage vary across states, and it covers around one-fifth of the population in the United States. Medicaid provides coverage for specific populations, including children, adults in poverty, adults with disabilities, and individuals with special healthcare needs.
Medicaid beneficiaries have better access to care than the uninsured, and their out-of-pocket costs are generally limited by federal rules. Their access to certain providers is comparable to those with private insurance. However, gaps in access to specific providers, such as psychiatrists and dentists, persist. These gaps may be due to provider shortages, lower physician payment rates, and lower physician participation in Medicaid compared to private insurance.
States have implemented comprehensive, risk-based managed care plans to improve access to services, enhance care coordination, and make costs more predictable. These plans, called Medicaid Managed Care Organizations (MCOs), provide acute and long-term care to Medicaid enrollees. States have increased their reliance on MCOs, which include a mix of private for-profit, private non-profit, and government plans.
The 2024 Managed Care rule aims to strengthen timely access to care by establishing maximum wait time standards for routine appointments and enhancing monitoring and enforcement. However, there are concerns about potential changes to Medicaid through congressional debates and executive actions that may impact coverage, financing, and access to care.
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Frequently asked questions
In all states, Medicaid offers health coverage to children, parents, pregnant individuals, elderly people with certain incomes, and people with disabilities. Some states have expanded their programs to cover adults below a specific income level.
You may be able to continue seeing your current doctor for a short period until you find another provider who accepts Medicaid. However, you must ask your state's Medicaid program for confirmation.
Some states allow you to "spend down" your income to meet the Medicaid limit. This involves paying non-covered medical expenses and cost-sharing until your income qualifies for Medicaid. Contact your State Medical Assistance (Medicaid) office for more information.
In this case, each type of coverage is called a "payer." Medicare, as the primary payer, pays up to its coverage limits and then sends the remaining balance to Medicaid, the secondary payer. If Medicaid doesn't cover the remaining balance, you may be responsible for the costs.
Medicaid provides benefits such as non-emergency medical transportation and comprehensive services for children, known as Early Periodic Screening Diagnosis and Treatment (EPSDT).
