Medicare vs. Medicaid. What’s the Difference and Can You Have Both?

Many people confuse Medicare and Medicaid. The names sound similar, and both are government healthcare programs, but they work very differently.

Understanding the difference is important because the programs you qualify for can directly affect what you pay for healthcare, prescription medications, premiums, deductibles, and other medical expenses.

Here’s a simple explanation of Medicare, Medicaid, Dual Eligibility, and Medicare Savings Programs.

What Is Medicare?

Medicare is a federal health insurance program.

Most people become eligible for Medicare at age 65. Some people under 65 may also qualify because of certain disabilities or medical conditions.

For most people qualifying for Medicare based on age, income does not determine whether they are eligible.

Because Medicare is a federal program, its basic eligibility rules are generally consistent throughout the United States.

Medicare includes different parts that cover different types of healthcare services, including hospital care, outpatient medical services, and prescription medications.

What Is Medicaid?

Medicaid is a joint federal and state healthcare program.

Unlike Medicare, financial eligibility is an important part of determining whether someone qualifies for Medicaid.

Depending on the eligibility category and state, factors may include income, household circumstances, family size, age or disability status, and assets or financial resources in certain Medicaid categories.

Another important difference is that Medicaid rules and benefits can vary from state to state.

Someone who qualifies for Medicaid in one state may encounter different eligibility requirements or benefits after moving to another state.

Can You Have Medicare and Medicaid at the Same Time?

Yes.

Medicare and Medicaid do not necessarily replace one another. For people who qualify for both programs, they can work together.

A person who qualifies for both Medicare and Medicaid is commonly referred to as Dual Eligible.

Medicare generally pays first for Medicare covered healthcare services. Depending on the person’s Medicaid eligibility, Medicaid may then help with certain healthcare expenses Medicare does not fully cover.

For eligible seniors and individuals with disabilities, having both programs can significantly reduce out of pocket healthcare expenses.

What Are Medicare Savings Programs?

Full Medicaid is not the only program that may help people with Medicare expenses.

There are also Medicare Savings Programs, commonly called MSPs, designed to assist people who meet specific financial eligibility requirements.

These include:

• QMB, Qualified Medicare Beneficiary

• SLMB, Specified Low Income Medicare Beneficiary

• QI, Qualifying Individual

Depending on which program a person qualifies for, assistance may include payment of the Medicare Part B premium and, in certain circumstances, additional Medicare cost sharing.

Many people may qualify for assistance but never apply because they simply don’t know these programs exist.

That is why it is important to check eligibility rather than assume your income is too high or that assistance isn’t available.

One of the Most Preventable Medicaid Problems: Missing a Renewal

One issue families should pay particular attention to is Medicaid renewal or redetermination.

Sometimes Medicaid coverage ends because required information wasn’t submitted by the deadline, not necessarily because the person was determined financially ineligible.

For example, a renewal notice may have been sent to an old address.

A letter may have been overlooked or mistaken for routine mail.

Additional documentation may have been requested but never submitted.

Or the renewal deadline may simply have been missed.

A paperwork problem can quickly become a healthcare coverage problem.

4 Ways to Help Protect Your Medicaid Coverage

1. Keep your information current.

Make sure your address, telephone number, and other important contact information are updated with the appropriate state Medicaid agency. Keep your information with Social Security current as well.

2. Don’t ignore official correspondence.

Open and carefully review notices concerning Medicare, Medicaid, Social Security, and your healthcare benefits, even when the envelope doesn’t appear urgent.

3. Pay attention to deadlines.

If Medicaid requests a renewal, redetermination, verification, or additional documentation, respond by the deadline listed in the notice.

4. Moving to another state? Check your Medicaid eligibility again.

Medicaid does not simply follow you from one state to another. Because Medicaid programs are administered by individual states, you generally need to apply for Medicaid in your new state.

Medicare and Medicaid: Do You Still Need Medigap?

This is another important question.

If you have both Medicare and Medicaid, be careful before purchasing a Medicare Supplement insurance policy, also known as Medigap.

Depending on your Medicaid eligibility, you may already receive assistance with some of the expenses that Medigap policies are designed to cover.

Federal rules also generally prohibit an insurance company from knowingly selling a Medigap policy to someone who has Medicaid, except in limited circumstances.

Before paying another monthly insurance premium, make sure you understand exactly what your existing Medicare and Medicaid benefits already cover.

Understanding Your Benefits Can Save You Money

Medicare and Medicaid can feel complicated, especially when you add Medicare Advantage, prescription drug coverage, Medigap, Medicaid, and Medicare Savings Programs into the conversation.

But the basic distinction is simple.

Medicare is primarily federal health insurance based on age or qualifying disability.

Medicaid is a federal and state program with financial and other eligibility requirements that can vary by state.

Some people qualify for both.

Even if you don’t qualify for full Medicaid, you may want to find out whether a Medicare Savings Program could help with some of your Medicare expenses.

Most importantly, don’t lose valuable coverage simply because a renewal notice was missed.

Stay informed, keep your information updated, respond to benefit notices on time, and review your eligibility whenever your financial circumstances or state of residence changes.

Knowledge can save you money and help prevent an unnecessary interruption in healthcare coverage.

Disclaimer

This article is provided for educational purposes only. It is not legal, financial, medical, or insurance advice and does not recommend any specific Medicare, Medicaid, Medicare Advantage, Medigap, or prescription drug plan. Eligibility, benefits, coverage, and costs depend on individual circumstances and may vary by state and program.