Differentiating Medicare and Medicaid
Persons who are eligible for both Medicare and Medicaid are called “dual eligibles”, or sometimes, Medicare-Medicaid enrollees. Since it can be easy to confuse the two terms, Medicare and Medicaid, it is important to differentiate between them. While Medicare is a federal health insurance program for seniors and disabled persons, Medicaid is a state and federal medical assistance program for financially needy persons of all ages. Both programs offer a variety of benefits, including physician visits and hospitalization, but only Medicaid provides long-term nursing home care. Particularly relevant for the purposes of this article, Medicaid also pays for long-term care and supports in home and community based settings, which may include one’s home, an adult foster care home, or an assisted living residence. That said, in 2019, Medicare Advantage plans (Medicare Part C) began offering some long-term home and community based benefits.
The Centers for Medicare and Medicaid Services, abbreviated as CMS, oversees both the Medicare and Medicaid programs. For the Medicaid program, CMS works with state agencies to administer the program in each state, and for the Medicare program, the Social Security Administration (SSA) is the agency through which persons apply.
Definition: Dual Eligible
To be considered dually eligible, persons must be enrolled in Medicare Part A, which is hospital insurance, and / or Medicare Part B, which is medical insurance. As an alternative to Original Medicare (Part A and Part B), persons may opt for Medicare Part C, which is also known as Medicare Advantage. (Original Medicare is managed by the federal government, while Medicare Advantage plans are managed by Medicare approved private insurance companies). Via Medicare Advantage, program participants receive Medicare Part A, Part B, and often Part D, which is prescription drug coverage.
In addition, persons must be enrolled in either full coverage Medicaid or one of Medicaid’s Medicare Savings Programs (MSPs). Full coverage Medicaid covers physician visits, hospital services (in-patient and out-patient), laboratory services, and x-rays. Medicaid also pays for nursing home care, and often limited personal care assistance in one’s home. While some states offer long-term care and supports in the home and community thorough their state Medicaid program, many states offer these supports via 1915(c) Medicaid waivers. (Note that unlike the state Medicaid plan, Medicaid waivers are not entitlement programs, which means there are participant caps on enrollment. Therefore, waitlists for services may exist). While MSPs do not provide the same coverage as listed above, they do provide assistance paying for Medicare premiums, and may also cover Medicare deductibles and co-payments.
Benefits of Dual Eligibility
Persons who are enrolled in both Medicaid and Medicare may receive greater healthcare coverage and have lower out-of-pocket costs. For Medicare covered expenses, such as medical and hospitalization, Medicare is always the first payer (primary payer). If Medicare does not cover the full cost, Medicaid (the secondary payer) will cover the remaining cost, given they are Medicaid covered expenses. Medicaid does cover some expenses that Medicare does not, such as personal care assistance in the home and community and long-term skilled nursing home care (Medicare limits nursing home care to 100 days). The one exception, as mentioned above, is that some Medicare Advantage plans cover the cost of some long term care services and supports. Medicaid, via Medicare Savings Programs, also helps to cover the costs of Medicare premiums, deductibles, and co-payments.
Long-Term Care Benefits
Medicaid provides a wide variety of long-term care benefits and supports to allow persons to age at home or in their community. Medicare does not provide these benefits, but some Medicare Advantage began offering various long term home and community based services in 2019. Benefits for long term care may include the following. This list is not exhaustive, and all benefits may not be available in all states.
- Adult Day Care / Adult Day Health
- Personal Care Assistance (at home, adult foster care homes, and assisted living facilities)
- Medical / Non-Medical Transportation
- Respite Care (to give the primary caregiver a break)
- Congregate Meals / Meal Delivery
- Home Health Aide / Skilled Nursing
- Home Modifications (widening of doorways, installation of ramps, addition of pedestal sinks to allow wheelchair access, etc.)
- Personal Emergency Response Systems
- Housekeeping / Chore Services
- Companion Services
- Transition Services (from nursing home back to home)
- Therapies (physical, occupational, and speech)
- Medication Administration
Both Medicaid and Medicare will provide Durable Medical Equipment, such as wheelchairs and walkers.
Since Medicare is a federal program, eligibility is consistent across the states. Persons must be U.S. Citizens or legal residents residing in the U.S. for a minimum of 5 years immediately preceding application for Medicare. Applicants must also be at least 65 years old. For persons who are disabled or have been diagnosed with end-stage renal disease or Lou Gehrig’s disease (amyotrophic lateral sclerosis), there is no age requirement. Eligibility for Medicare is not income based. Therefore, there are no income and asset limits.
Often, persons are not charged a monthly premium to receive Medicare Part A (hospitalization insurance). For premium free coverage, a person (or his or her spouse) must have worked a minimum of 10 years and paid into Medicare. If one has to pay the full monthly premium, it is $471. (This figure and the following Medicare figures are all current for 2021). Some persons who have worked, but have not met the full work requirements, are able to purchase Medicare Part A at a reduced rate of $259 / month. The annual Part A in-patient hospitalization deductible is $1,484. After the deductible is met, one must pay a cost share (coinsurance) for services.
For Medicare Part B (medical insurance), enrollees pay a monthly premium of $148.50 in addition to an annual deductible of $203.
In order to enroll in a Medicare Advantage (MA) plan, one must be enrolled in Medicare Parts A and B. The monthly premium varies by plan, but is approximately $33 / month. Not all MA plans charge a monthly premium, but for those that do, the premium is in addition to one’s monthly Part A and Part B premiums, if applicable.
For Medicare Advantage plans that offer long-term home and community based services as a supplemental benefit, medical / functional requirements must be met to receive these benefits.
Eligibility requirements for Medicaid are not as straightforward as are the requirements for Medicare. This is because, as mentioned previously, Medicaid is a federal and state program. While the parameters of the program are federally set, each state can set their own rules within these guidelines. Even within the same state, there are a variety of pathways to Medicaid that have their own eligibility requirements.
Unlike with Medicare, Medicaid does have income and asset limits. In most cases, as of 2021, the individual income limit for institutional Medicaid (nursing home Medicaid) and Home and Community Based Services (HCBS) via a Medicaid Waiver is $2,382 / month. The asset limit is generally $2,000 for a single applicant. There is some variation of income and asset limits by state. (See Medicaid eligibility requirements by state). Applicants must also have a functional need for care, which generally equates to a level of care consistent to that which is provided in a nursing home. Learn more.
Medicare Savings Programs
The income and asset requirements for Medicare Savings Programs do not use the above financial criteria. There are three MSP programs that are relevant to the elderly. Most states use the limits below (current for 2021), but some states use different guidelines. For example, Alaska, Connecticut, the District of Columbia (DC), Indiana, Maine, Massachusetts, and Hawaii have higher income limits, and some states, such as Alabama, Arizona, Connecticut, Delaware, DC, Louisiana, Mississippi, New York, Oregon, and Vermont do not limit one’s assets.
Qualified Medicare Beneficiary (QMB)
The QMB program helps to pay the monthly premiums for Medicare Part A and Part B, share of costs, coinsurance, and deductibles. As a general rule of thumb, the income limit is 100% of the Federal Poverty Level (FPL), plus a $20 disregard. This means that a single applicant can have up to $1,093 / month in income and a married couple can have as much as $1,472 / month in income. The asset limits are higher than they are for full Medicaid. The limit for a single applicant is $7,970, and the limit for a married couple is $11,960.
Specified Low Income Medicare Beneficiary (SLMB)
The SLMB program helps pay the premium for Medicare Part B. Generally speaking, the income limit is 120% of the FPL, plus an additional $20 that is disregarded. An individual can have monthly income up to $1,308 and a married couple can have up to $1,762. The asset limit is $7,970 for an individual and is $11,960 for a married couple
Qualifying Individual (QI)
The QI program, which may also be referred to as Qualified Individual, also helps pay the monthly premium for Medicare Part B. The income limit is 135% of the FPL, plus a $20 disregard. This means a single applicant can have income up to $1,469 / month, and married couples, up to $1,980 / month. The assets are capped at $7,970 for an individual and $11,960 for a couple.
Becoming Medicaid Eligible
Please note that income and assets over the Medicaid limit(s) in one’s state is not cause for automatic disqualification. This is because there are Medicaid-compliant planning strategies intended to lower one’s countable income and / or assets in order to meet the limit(s). A word of caution: It is vital that assets not be given away a minimum of 5 years (2.5 years in California) prior to the date of one’s Medicaid application. (New York is in the process of implementing a 2.5 year look back for long-term home and community based services). This is because Medicaid has a look-back period in which past transfers are reviewed to ensure an applicant (and / or an applicant’s spouse) has not gifted assets or sold them under fair market value. If this rule has been violated, it is assumed the assets were transferred in order to meet Medicaid’s asset limit and a penalty period of Medicaid disqualification will be calculated.
How to Apply
To apply for Medicare, contact your local Social Security Administration (SSA) office.
To apply for Medicaid, contact your state’s Medicaid agency. Learn about the long-term care Medicaid application process. Prior to applying, one may wish to take a non-binding Medicaid eligibility test. The results of which will help families know if a loved one is might be eligible for Medicaid or if they need to work with a Medicaid planning professional to become eligible.