Introduction

Medicaid and Medicare are both government-funded insurance programs, but Medicaid is for financially limited persons of all ages, while Medicare is for persons who are age 65-and-over, and/or disabled. There are other important differences, which are detailed below. Seniors who are enrolled in both Medicaid and Medicare are known as “dual eligible,” and the two programs work together for them to provide more comprehensive healthcare coverage and fewer out-of-pocket expenses.

Compare and Contrast: Medicaid and Medicare

Medicaid and Medicare both cover basic healthcare expenses like physician’s visits, emergency room trips, hospital stays and skilled nursing care. However, Medicaid will cover long-term nursing home care while Medicare will not. Medicare only covers up to 100 days in a skilled nursing facility when it’s medically necessary, such as rehabilitating from a major event like a stroke or a surgery.

Medicaid will also cover long-term care services and supports for people who live in their own home, the home of a loved one, or, in most states, in assisted living facilities, adult foster homes or adult day care. Medicare offers some community long-term care options in care plans available through Medicare Advantage (Medicare Part C), but most Medicare coverage does not include long-term care.

The Centers for Medicare and Medicaid Services (CMS) oversees both programs. However, CMS works with individual states when it comes to Medicaid, which is administered by state agencies that can have their own programs, rules and eligibility requirements. Medicare, on the other hand, is administered by the federal government via CMS and the Social Security Administration, which handles Medicare applications.

As mentioned above, Medicaid is for financially limited persons. Applicants have to prove they meet their asset and income limits by submitting official financial documents – bank records, retirement account statements, Social Security benefits letters, home deeds, vehicle titles, etc. – along with their application. Most Medicaid long-term care programs also require applicants to need a Nursing Facility Level of Care (NFLOC), so states will also conduct a medical/functional assessment as part of the application process. Medicare applicants, on the other hand, do not need to meet financial limits or supply financial documents, and they only need to meet medical/functional requirements if they want to enroll in a Medicare Advantage (Part C) plan that offers long-term home and community based services as a supplemental benefit.

Requirements for Dual Eligibility

To be dual eligible, seniors must be:

1) Enrolled in Medicare Part A (hospital insurance) and/or Medicare Part B (medical insurance) or Medicare Part C (Medicare Advantage),

AND

2) Enrolled in full coverage Medicaid – Nursing Home Medicaid, Home and Community Based Services Waivers, or Aged, Blind and Disabled (ABD) Medicaid – OR one of Medicaid’s Medicare Savings Programs – Qualified Medicaid Beneficiary (QMB), Specified Low Income Medicare Beneficiary (SLMB) or Qualifying Individual (QI).

Medicare Requirements
To qualify for Medicare, applicants must be age 65 or older, or disabled, or have Lou Gehrig’s disease, or have end-stage renal disease. Applicants must also be a U.S. citizen or a legal U.S. resident having lived in the country for a minimum of five years before applying. There is no premium for Medicare Part A if one has met the work requirements, otherwise there is a premium, as there is for Medicare Parts B, C and D (prescription medication coverage). With Medicare Part C’s Medicare Advantage programs, beneficiaries receive Medicare Part A and B, and with some plans Part D, as well.

Medicaid Requirements
As mentioned, Medicaid applicants must meet asset and income limits that can vary by state, program and the applicant’s marital status. Nursing Home Medicaid applicants and most HCBS Waivers applicants are also required to need a Nursing Facility Level of Care. The financial eligibility requirements for Medicaid’s Medicare Savings Programs (MSPs) are less severe, but these programs do not provide healthcare coverage, they only help beneficiaries pay their Medicare premiums, and in some cases their Medicare deductibles and co-payments. Plus, being enrolled in an MSP automatically qualifies one for Extra Help (also called Low Income Subsidy), which helps cover the cost of Medicare Part D (prescription medication insurance).

Dual Eligible Benefits

For dual eligible seniors, Medicare is the primary payer for any expenses the senior’s Medicare plan would normally cover – physician’s visits, lab work, hospitalization, etc. If Medicare does not cover the full cost of any of those expenses, Medicaid (the secondary payer) will cover the remainder, as long as those services are part of the senior’s Medicaid plan.

Medicaid will pay the Medicare Part A and Part B premiums for dual eligible seniors who have full Medicaid coverage. Individuals who worked 10 years or more and paid into Medicare will receive Medicare Part A for free in most cases. However, for anyone who didn’t work, the full monthly premium for Medicare Part A in 2025 is $518. And the monthly premium for Part B in 2025 is $185. Medicaid will also pay Medicare Part A and B premiums for dual eligible seniors who are enrolled in one of the MSPs, as mentioned above, and some will receive help with co-payments and deductibles.

Dual eligible seniors who have full Medicaid (Nursing Home Medicaid, HCBS Waivers or ABD Medicaid) are covered for long-term care, while most seniors who only have Medicare are not, unless it’s part of their Medicare Advantage plan.

Nursing Home Medicaid covers all essential costs in nursing homes for eligible applicants. This includes room and board, as well as prescription medication, physician visits, skilled nursing, exercise/social activities, personal care assistance with the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting), and other services deemed medically necessary.

HCBS Waivers and ABD Medicaid cover long-term care services and supports for eligible seniors who live in their own home, the home of a loved one and, in most states, in assisted living residences, including memory care for Alzheimer’s disease and other dementias. The coverage depends on the program, state and individual, but it can include:

• In-home nursing visits
• Medication management
• Home modifications for safety and accessibility
• Personal Emergency Response Systems
• Assistive Technology
• Housekeeping services (shopping, cooking, light cleaning, laundry)
• Chore services
• Meal delivery
• Medical and non-medical transportation
• Adult day care
• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting)

Program of All-Inclusive Care for the Elderly

Although being dual eligible is not a requirement for admission into the Program of All-Inclusive Care for the Elderly (PACE), approximately 90% of program participants are dual eligible, according to the National PACE Association. PACE will coordinate all medical and non-medical coverage into one comprehensive plan for its members, including Medicaid and Medicare benefits for dual eligible seniors. PACE also administers hearing, vision and dental care, and PACE day centers provide daytime supervision, medical oversight, social activities, exercise programs and other care services. PACE is called LIFE (Living Independence for the Elderly) in some states. There are currently 185 PACE organizations operating in 33 states.

Qualifying and Applying

When it comes to seniors qualifying for Medicare, there is no gray area – they are either age 65 or not. Medicaid is a different story.

Seniors who don’t meet their asset or income limits for Medicaid eligibility may still be able to qualify. Depending on their situation, they would need to employ Medicaid Planning techniques like spending down, Half-a-Loaf or the Medically Needy Pathway. These strategies tend to be complicated, so consulting with a professional before attempting them on your own is recommended.