Many people look forward to turning 65 because they can get their health care from Medicare.
Medicare is the federal government’s health insurance program that falls under the Centers for Medicare & Medicaid Services (CMS). It is available to most 65-year-olds (plus some younger people with disabilities) who meet particular citizen and residence requirements.
Original Medicare is made up of Part A (hospital insurance) and Part B (medical insurance). Because Original Medicare does not cover prescription drugs, private insurers offer standalone Medicare Part D plans under the guidelines of CMS.
And Medicare Part C, also called Medicare Advantage, is a private alternative that contracts with the government to replace your Original Medicare Part A and Part B services, plus some other services such as prescription drug, vision and dental care.
Takeaway Action Step: You can contact Medicare about eligibility at 1-800-772-1213 or 1-800-MEDICARE or through the Social Security Administration Website.
There are costs associated with Medicare – including premiums, deductibles, coinsurance and copayments that not everyone can afford. For example, virtually everyone will pay the Medicare Part B monthly premium of $170.10 in 2022. And that’s where Medicaid might come in.
What is Medicaid, and how does it fit in?
Medicaid is also a government medical assistance program under the CMS umbrella, but individual states administer it. However, instead of qualifying by age or disability, Medicaid is available to financially needy people regardless of age.
If you are approved for both Medicare and Medicaid, you are said to be “dual eligible.” So how do you receive financial support for your health care costs?
To qualify as dual-eligible, you must be enrolled either in Original Medicare’s Part A and/or Part B or in Medicare Advantage. For Medicare Advantage, you might be pointed to specific plans called Special Needs Plans (SNPs), one of which (D-SNP) is specifically tailored towards dual-eligibles. Note that D-SNPs are not available everywhere.
And you must be enrolled in one of two other programs: (1) full coverage Medicaid or (2) one of Medicaid’s “Medicare Savings Programs,” or MSPs.
Full coverage Medicaid offers much of what Medicare Part A and Part B do: doctor visits, in-patient and out-patient hospital services, lab work and x-rays. It also pays for nursing home care and possibly some limited in-home care. Services that Medicare covers are first paid by Medicare (as the primary payer) and any balance is paid by Medicaid (as the secondary payer).
Medicare Savings Programs do not offer the same coverage as full coverage Medicaid, but they do help with the payment of Medicare premiums, deductibles or copayments.
There are four different Medicare Savings Programs, each with its specific benefits, as well as income and resource thresholds (which may change from year to year):
Qualified Medicare Beneficiary (QMB) Program
Specified Low-Income Medicare Beneficiary (SLMB) Program
Qualifying Individual (QI) Program
Qualified Disabled and Working Individuals (QDWI) Program
All but the QDWI Program will help you pay for Medicare Part B premiums and automatically make you eligible to get “Extra Help.” This program, also called the Part D Low-Income Subsidy (LIS), will help with Medicare prescription drug costs.
Takeaway Action Step: To check your eligibility for the different Medicare Savings Programs, contact your state’s Medicaid office or your State Health Insurance Assistance Program (SHIP).
The Benefits of Being Dual-Eligible
The result of being enrolled in both Medicaid and Medicare is that you may receive greater medical coverage with lower out-of-pocket expenses.
However, what is available to you will depend on the state where you live and is too varied to describe here. For example, states may calculate income and assets differently, so you could be eligible despite having income and resources above the stated limit.
If your interest in Medicaid is triggered by needing its long-term care, you may need to do some advance planning to qualify. Medicaid employs what it calls a “look-back period” (usually five years) starting from when you apply. This lets Medicaid review your assets over the prior years to ensure you haven’t transferred them to others to qualify.
To help in the process, the American Council on Aging provides a non-binding Medicaid Eligibility Test for a fee to check your eligibility status before you fill out a formal Medicaid application with your state. In addition to the results, it will suggest the best route to get help qualifying and applying. Solutions range from state agencies to private Medicaid planners. (Wiser Medicare has no affiliation with the American Council on Aging.)
Takeaway Action Step: To discover what your state offers, learn the income and resource limits, and apply for Medicaid, contact your state’s Medicaid office.