Medicare and Medicaid — Dual Eligible

Medicare and Medicaid are two different programs, but nearly 12 million Americans qualify for both at the same time, according to the Centers for Medicare & Medicaid Services (CMS). If you are one of them, you are considered "dual eligible." Medicare, the federal health insurance program based on age or disability, pays first for covered services. Medicaid, the joint federal-state program for people with limited income, then covers most or all of what Medicare leaves behind, including premiums, deductibles, copays, and services Medicare does not cover at all, such as long-term nursing home care. This guide explains how Medicare and Medicaid coordinate for dual-eligible beneficiaries, the two categories of dual eligibility, and the Medicare Advantage plans built specifically for people who have both types of coverage.

What Dual Eligibility Means

Medicare is a federal health insurance program administered by CMS. Most people qualify at age 65, and some qualify earlier because of a disability. Medicaid is a joint federal-state program that pays for health care for people with limited income and assets. Each state runs its own Medicaid program within federal rules described at Medicaid.gov, so income limits and covered benefits vary by state.

When someone qualifies for both programs, Medicare acts as the primary payer. It pays first for doctor visits, hospital stays, and prescription drugs. Medicaid acts as the secondary payer and picks up costs Medicare does not cover in full, such as Medicare Part A and Part B premiums, deductibles, and coinsurance. In many states, Medicaid also covers services Medicare does not, including long-term nursing home care and certain home and community-based services.

Full vs. Partial Dual Eligibility

Not every dual-eligible person gets the same level of Medicaid coverage. There are two categories:

• Full dual eligibility means you qualify for your state's complete Medicaid benefits package in addition to Medicare. Full-benefit dual eligibles generally get coverage for doctor visits, hospital care, prescriptions, and long-term care, on top of what Medicare already pays.
• Partial dual eligibility means you qualify for one of the Medicare Savings Programs (MSPs): Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), or Qualifying Individual (QI). These programs use Medicaid funds to pay some or all of your Medicare premiums, deductibles, and coinsurance, but they do not include the full Medicaid benefits package. See our guide to Medicare Savings Programs for income limits and how to apply.

Which category you fall into depends on your income and assets compared with your state's Medicaid limits, so confirm current numbers with your state Medicaid agency before you apply.

How Medicare and Medicaid Coordinate Benefits

For dual-eligible beneficiaries, the payment order is consistent: Medicare pays first, Medicaid pays second. When you see a doctor or go to the hospital, the provider bills Medicare first, and Medicare pays its share based on your Part A and Part B coverage. Medicaid then reviews what is left, such as your deductible or 20% coinsurance under Part B, and pays some or all of that remaining amount, depending on your state's rules and which dual eligibility category you fall into.

This coordination generally means dual-eligible beneficiaries face little to no out-of-pocket cost for Medicare-covered services. Full-benefit dual eligibles typically also get Medicaid's Extra Help subsidy for Medicare Part D drug costs automatically, which lowers what they pay for premiums and prescriptions. Related costs are explained in our Medicare cost guide.

Dual Special Needs Plans (D-SNPs)

A Dual Special Needs Plan (D-SNP) is a type of Medicare Advantage plan built specifically for people who have both Medicare and Medicaid. D-SNPs coordinate your Medicare and Medicaid benefits under a single plan instead of managing two separate systems, and Medicare.gov maintains an overview of Dual Eligible Special Needs Plans. Compared with Original Medicare, D-SNPs often include extra benefits such as $0 monthly premiums, transportation to medical appointments, an over-the-counter (OTC) allowance, and routine dental, vision, and hearing coverage. For background on how Medicare Advantage differs from Original Medicare, see our Medicare vs. Medicare Advantage guide.

To enroll in a D-SNP, you generally need to be enrolled in both Medicare and Medicaid in the state where the plan operates, and plan availability, benefits, and provider networks vary by county and by carrier. Because D-SNPs coordinate directly with your state Medicaid program, losing Medicaid eligibility can affect your D-SNP enrollment, so keep your Medicaid renewal paperwork current.

Medicaid Rules Can Change by State

Medicaid eligibility rules are not fixed. States periodically adjust income limits, redetermination schedules, and in some cases add new requirements for certain Medicaid populations. If you're helping a family member who receives Supplemental Security Income (SSI) with a Medicaid application, see our guide on Medicaid work requirements for SSI applicants to understand who these rules typically affect.