Jeffrey Wade
Medicaid is a health insurance plan jointly funded by federal and state governments to provide coverage to Americans with low incomes. It can be used as both a primary and secondary insurer. When used as a secondary insurer, it covers the copay from the primary insurer as long as the service is covered by Medicaid. It is possible to have Medicaid and private insurance at the same time, in which case, the private insurance plan will typically be the primary coverage, and Medicaid will be supplemental.
| Characteristics | Values |
|---|---|
| Whether Medicaid can be combined with other insurance coverage | Yes, it is not unusual to combine Medicaid and other insurance coverage |
| Who pays first | The primary payer pays up to the limits of its coverage, then sends the remaining balance to the secondary payer |
| Medicaid as a primary payer | Medicaid can work as both a primary or secondary insurer |
| Medicaid as a secondary payer | If your primary insurance covers a service, they will pay the appropriate amount for that coverage, and send the remaining balance to your Medicaid coverage |
| Medicaid and Medicare | If you have both, Medicare pays first and Medicaid serves as the secondary payer |
| Medicaid and private insurance | If you are eligible for both, your private insurance plan will usually be the primary coverage, and your Medicaid coverage will be supplemental |
| Medicaid and employer-sponsored insurance | You can maintain your employer-sponsored insurance plan as your primary coverage while also qualifying for Medicaid, which will pay for any qualifying expense that your primary plan doesn't cover |
| Medicaid beneficiaries | Medicaid provides health insurance coverage for more than 72 million Americans |
| Medicaid beneficiaries and access to care | Medicaid beneficiaries have substantially better access to care than people who are uninsured |
| Medicaid beneficiaries and out-of-pocket costs | Federal rules generally limit out-of-pocket Medicaid costs |
| Medicaid beneficiaries and race | Relative to White children and adults, Medicaid covers a higher share of Black, Hispanic, and American Indian or Alaska Native (AIAN) children and adults |
| Medicaid beneficiaries and income | Eligibility for Medicaid is dependent on having a low income |
| Medicaid beneficiaries and age | In 2023, Medicaid covered nearly 4 in 10 children, over 8 in 10 children in poverty, and almost half of adults in poverty |
| Medicaid and prescription drugs | Medicaid pays for a limited number of drugs that are excluded from Medicare Part D coverage |
| Medicaid and long-term care | Medicaid is the primary payer for long-term care in the United States, covering 61% of total spending |
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What You'll Learn
Medicaid as a secondary insurer
Medicaid is a federal-state programme that assists specific low-income people, families, and children, as well as pregnant women, the elderly, and people with disabilities, in covering medical expenses. It also assists other adults in covering medical expenses. Medicaid offers benefits that Medicare does not, such as nursing home care and personal care services. Medicaid can serve as both a primary and secondary insurer.
When a beneficiary has employer-based or other private commercial insurance, Medicaid acts as the "payer of last resort", meaning it will be the last to contribute to a medical bill and may cover copayments and coinsurances. This is known as "third-party liability" (TPL), which means that any third-party resources are responsible for the primary payment, and not Medicaid. All other sources of healthcare coverage must pay claims first before Medicaid will cover any costs under federal law.
For those with both Medicare and Medicaid, also known as "dual-eligible" beneficiaries, Medicare pays first, and Medicaid serves as the secondary payer. Dual-eligible beneficiaries can expect to pay little to nothing out of pocket, as Medicare will pay its share before handing the bill to Medicaid, which will pay its share, including any copayments and coinsurances. These beneficiaries are often automatically enrolled in a Medicare Savings Program (MSP), which covers the Medicare Part B premium and may offer additional services.
Medicaid can also be used in conjunction with private insurance. In this case, the private insurance will be the primary payer and will receive the bill first. If they cover the service, they will pay the appropriate amount, and whatever is left will be sent to Medicaid. If the primary insurance does not cover the service but Medicaid does, then Medicaid will pay the entire amount.
It is important to note that some providers may not accept Medicaid, even if the patient has commercial insurance that covers the service. As such, it is recommended to mention both insurances and check with any new providers.
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Medicaid with private insurance
Medicaid is a health insurance plan jointly funded by federal and state governments to provide coverage to Americans with low incomes, children, pregnant women who meet certain requirements, and those eligible for Supplemental Social Security Income. Private insurance includes plans offered by employers, Obamacare plans purchased through the Health Insurance Marketplace, or those purchased directly through private insurance companies.
It is possible to have both Medicaid and private health insurance at the same time. In many cases, if an individual is eligible for both, their private insurance plan will be the primary coverage, and their Medicaid coverage will be supplemental. In such cases, the private insurance will pay up to the limits of its coverage, and then send the remaining balance to Medicaid, which will then pay its share.
However, Medicaid beneficiaries may have other sources that are legally liable for payment of their medical costs, such as private insurance, Medicare, other public programs such as the Ryan White program, workers’ compensation, and amounts received for injuries in liability cases. In these cases, third-party sources are generally required to pay for medical costs incurred by a beneficiary before the Medicaid program. 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.
There are some advantages and disadvantages to having both Medicaid and private insurance. For example, if an individual's private insurance is provided by their employer, maintaining this coverage likely means continuing to pay substantial costs for premiums. Considering that Medicaid eligibility is dependent on having a low income, the yearly premiums for private health insurance could make up a significant amount of an individual's budget.
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Medicaid with Medicare
Medicaid and Medicare are both health insurance plans, but they cater to different groups of people. Medicaid is a health insurance plan jointly funded by federal and state governments to provide coverage to Americans with low incomes, including children, adults, pregnant women, people with disabilities, and seniors. Medicare, on the other hand, is a federal health insurance program primarily for individuals aged 65 and above and some people under 65 with certain disabilities or conditions.
It is possible to have both Medicaid and Medicare coverage simultaneously. In such cases, Medicare typically serves as the primary payer, covering its share of the costs first, and then Medicaid acts as the secondary payer, covering any remaining expenses. This coordination ensures that individuals with both coverages have their medical costs effectively managed.
When an individual has both Medicare and Medicaid, they are considered "dually eligible." Medicare, as the primary payer, pays up to the limits of its coverage and then sends the remaining balance to Medicaid. This means that Medicare will cover Medicare-covered services first, and for services covered by both programs, Medicare pays first. Medicaid then steps in as the secondary payer, covering copayments and coinsurances that Medicare does not.
Being dually eligible for Medicare and Medicaid offers several advantages. Dual-eligible beneficiaries often automatically enrol in a Medicare Savings Program (MSP), which covers the Medicare Part B premium. They may also receive Extra Help with their drug costs, including assistance with Medicare Part D drug expenses. Additionally, Medicaid may pay for other drugs and services that Medicare does not cover, such as nursing home care and personal care services.
Combining Medicaid with other insurance coverage, such as Medicare, is not unusual. The coordination of benefits rules determines which insurance covers medical costs first. In most cases, having both coverages can provide comprehensive protection and ensure that individuals do not have to bear significant out-of-pocket expenses.
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Medicaid with employer-provided insurance
Medicaid is a health insurance plan jointly funded by federal and state governments to provide coverage to Americans with low incomes. Private insurance includes plans offered by employers. It is possible to have Medicaid and private health insurance at the same time, and there are advantages and disadvantages to doing so.
If you have Medicaid and private insurance, each type of coverage is called a "payer". The "primary payer" pays up to the limits of its coverage, then sends the rest of the balance to the "secondary payer". In most cases, your private insurance plan will be the primary coverage, and your Medicaid coverage will be supplemental.
If you have employer-provided insurance, you won't qualify for savings on a Marketplace plan. In 2025, a job-based health plan is considered "affordable" if your share of the monthly premium in the lowest-cost plan offered by the employer is less than 9.02% of your household income. If your employer's plan meets this standard, you won't qualify for a premium tax credit if you buy a Marketplace insurance plan instead.
If you are no longer eligible for Medicaid, you should reach out to your employer immediately. You typically only have 60 days from the date you lose Medicaid coverage to request a Special Enrollment Period (SEP). However, if you lost Medicaid eligibility on or before July 10, 2023, you can request an SEP until September 8, 2023. Employers also offer an annual open enrollment period when all employees can re-examine their coverage choices and make changes.
There are some disadvantages to keeping both Medicaid and employer-provided insurance. Maintaining employer-sponsored coverage likely means continuing to pay substantial costs for premiums. The average employee with an employer-sponsored insurance plan paid $6,575 per year in premiums in 2023 for a family plan and $1,401 for individual coverage. Considering that Medicaid eligibility is dependent on having a low income, the yearly premiums for private health insurance could make up a significant amount of your budget.
If you feel that your Medicaid coverage is as good as or better than your private plan, it may not be worth keeping your private insurance. However, if you choose to keep only Medicaid and you lose it for some reason, you may have missed the open enrollment period with your employer.
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Medicaid as a primary payer
Medicaid is a federal and state-administered program that provides comprehensive health and long-term care coverage to low-income individuals in the United States. It is the primary payer for long-term care, covering over half of the total spending in this area.
Medicaid interacts with other payers when beneficiaries have other sources that are legally liable for payment of their medical costs. These may include private insurance, Medicare, other public programs, workers' compensation, and amounts received for injuries in liability cases. In these cases, Medicaid may serve as a "wrap-around" coverage, supplementing the primary insurance.
Medicaid can act as both a primary and secondary insurer. When an individual has Medicaid and is also eligible for or enrolled in Medicare, Medicaid typically serves as the secondary payer. Medicare pays first and covers its share, then passes the remaining balance to Medicaid, which covers copayments and coinsurances. However, in certain instances, such as with prenatal and pediatric services, Medicaid may pay first and then seek reimbursement.
Medicaid is also the primary payer for specific services, such as non-emergency medical transportation and comprehensive benefits for children, known as Early Periodic Screening Diagnosis and Treatment (EPSDT) services. Additionally, in some states, Medicaid is the primary payer for prescription drugs and home care, which are considered optional benefits under federal Medicaid law.
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Frequently asked questions
Yes, it is not unusual to combine Medicaid and other insurance coverage. If you are eligible for both, your private insurance will likely be the primary coverage, and Medicaid will be supplemental.
Your primary insurance will receive the bill first and pay the amount appropriate for that coverage. The remaining amount will be sent to Medicaid, which will pay whatever is left, as long as the service is covered.
Yes, Medicaid will cover the copay from your primary insurance, as well as any other remaining costs, as long as the service is covered by Medicaid.
