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  • Wiser Medicare

What is Medicaid and How Can It Help Seniors?

Updated: Apr 21, 2023

So you picked the Medicare solution you felt was best for you, either Original Medicare or Medicare Advantage. Now, unexpected inflation and some of life's curveballs are putting pressure on your budget, and your health care costs are feeling heavy. What are your options?


One of the alternatives for seniors who are having trouble affording Medicare coverage -- besides the financial assistance programs available through Medicare – is to seek support through Medicaid. Let's look at what Medicaid is, how it works, and how to access it.


What is Medicaid?

Medicaid is a program the federal government funds together with the states – that is administered by state agencies along federal guidelines. It provides free or low-cost health care coverage to several low-income populations, including seniors.


While it's available nationwide, coverage and eligibility vary from one state to another, as opposed to Original Medicare which is consistent across America.


The program became operational in 1965, enrolling about 4 million people in its first year. One by one, states set up their state-level programs to benefit from federal law. Today, over 85 million Americans of all ages benefit from Medicaid.


What does Medicaid cover?


Medicaid's benefits vary by state – and by age since it covers newborns to seniors. Federal rules require coverage of inpatient and outpatient hospital services, doctors, x-rays and labs, medical transportation and family planning. Other services, such as prescription drugs and physical therapy, are optional, with each state deciding what to cover.


But what sets Medicaid apart from Medicare the most – especially where older adults are concerned – is that it covers long-term care. In fact, most nursing home residents in America are covered under Medicaid – with Medicare handling their medical needs.


How do seniors qualify for Medicaid?


Medicaid is available to Americans of all ages: "adults, children, pregnant women, elderly adults, and people with disabilities." Of interest to Medicare beneficiaries, it includes people 65 and older – plus those who are blind or have disabilities and receive income from the Social Security Administration.


In contrast with Medicare, Medicaid's eligibility is based on income and specific limits to assets or resources. Rules vary by state, so contacting your state's Medicaid office can clarify its particular requirements.


Takeaway action step: As you're contacting your state Medicaid office, you can also check an up-to-date eligibility chart by state provided by the American Council on Aging.

The key is to remember that you can be enrolled in both Medicaid and Medicare (whether yours is Original Medicare or Medicare Advantage). Beneficiaries of both programs are called "Medicare dual eligible" and are broken into two groups, as follows:

  • Partial dual eligible, if you have Medicare and are eligible for Medicaid help in paying some Medicare premiums, copays and coinsurance.

  • Full-benefit dual eligible, if you have Medicare, are eligible for Medicaid help in paying some Medicare premiums, copays and coinsurance, and also receive some Medicaid-only benefits like long-term care.


Once again, the group you fall into depends on your state's eligibility requirements. Over 12 million Medicare beneficiaries are dual eligible: about one-third are partial dual eligible, and two-thirds are full-benefit dual eligible.


Typically, your path to becoming dual eligible would start with you being enrolled in Medicare. You would likely access Medicaid's additional coverage because you or someone else realizes you need help for income reasons or due to a severe disability. However, it can happen in reverse, with you being covered by Medicaid first, then qualifying for Medicare by age or disability.


You may be enrolled automatically in Medicaid for several reasons, including signing up for a program like Supplemental Nutrition Assistance Program (SNAP), receiving Supplemental Security Income (SSI) or staying in a skilled care facility longer than Medicare's limited coverage.


How does Medicaid work with Medicare?


Because each state offers its own combination of Medicaid programs, how it interacts with Medicare will likely also vary. However, it can help you pay for services that Medicare doesn't cover. As a dual eligible, you will be enrolled automatically in one of the following four Medicare Savings Programs (MSPs), based on their differing eligibility requirements:

  • Qualified Medicare Beneficiary (QMB)

  • Specified Low-income Medicare Beneficiary (SLMB)

  • Qualifying Individual (QI)

  • Qualified Disabled Working Individual (QDWI)


The benefits of being Medicare-Medicaid dual eligible include the following:


  • Providing premium assistance. QMB pays your Medicare Part A and Part B premiums. SLMB and QI pay your Medicare Part B premium, and QDWI pays your Medicare Part A premium.


  • Providing cost-sharing help. If you qualify for QMB, you don't pay Medicare's cost-sharing, including deductibles, coinsurances and copays.


  • Providing prescription drug help. If you enroll in an MSP, you'll also be enrolled in Extra Help. This federal program helps you pay Part D prescription drug costs: monthly premiums, annual deductibles and prescription copayments.


  • Providing secondary insurance. Medicare is a primary payer – meaning it pays its portion first – and Medicaid is a secondary. Those services that both programs cover are first paid for by Medicare, with Medicaid covering the difference up to the state's payment limit.


  • Offering care coordination. Some states may require beneficiaries to enroll in Medicaid private health plans called Medicaid Managed Care (MMC), with optional enrollment in Medicare Advantage plans to coordinate the various benefits better.


In short, combining Medicare and Medicaid provides a reassuring safety net for seniors with limited income and adults with disabilities.


Dual eligibility and long-term care


Takeaway action step: Make sure to call 1-800-MEDICARE or contact your local Medicaid office to learn if you would qualify for long-term care assistance as a dual eligible – or what it would take to do so.


 

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