By Daniel Petkevich
Jan 7, 2023
Medicare, Medicaid, and Medigap (also known as Medicare Supplement) often overlap; sometimes, people sign up for more than one plan. But is there ever a time when you should enroll in all three?
We want you to get the best benefits possible, so we'll walk you through everything you need to know.
Let's explore Medicare, Medicaid, and Medigap in more detail, get a sense of their differences, and discuss whether to enroll in more than one plan.
Medicare, Medicaid and Medigap all assist in covering your healthcare expenses. But they help different populations and meet unique needs.
Let's take a look at each plan.
Medicare is a health insurance program administered by the U.S. federal government.
It provides coverage to people ages 65+ and those with disabilities or ESRD (end-stage renal disease).
There are four parts to Medicare:
Part A — part of Original Medicare; covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home healthcare
Part B — part of Original Medicare; covers medically necessary services and preventive care, such as doctor visits, lab tests, and durable medical equipment
Part C (Medicare Advantage) — alternative to Parts A and B offered by private insurance companies; combines all the benefits of Parts A and B and often includes additional benefits, such as prescription drug coverage
Part D — prescription drug benefit that can be added to Original Medicare (Parts A and B) or a Part C plan
Medicaid is a joint federal and state program that provides health insurance to low-income individuals and families — including the elderly, individuals with disabilities, children, and pregnant women.
Medicaid might cover a wide range of medical services, such as:
Medicaid is administered by the states (rather than at a federal level). And each state has its own eligibility criteria and benefits. To be eligible for Medicaid, you must meet your state's income and asset requirements.
Medigap is a supplemental insurance policy that supplements Original Medicare (Part A and Part B).
It helps cover certain out-of-pocket costs — like copayments, coinsurance, and deductibles. However, it doesn't cover long-term care, vision, dental, hearing aids, private-duty nursing, and prescription drugs.
Medigap policies are offered by private insurance companies and are standardized by the federal government. You can choose from 10 Medigap plans depending on your requirements. Medicare Supplement Plan G offers the most comprehensive coverage for many of our clients.
Yes. You can benefit from Medicare and Medicaid if you're dually eligible. In other words, you have to meet the eligibility requirements for both Medicare and Medicaid.
To be dually eligible, you must meet the following conditions:
Be 65 years or older or have a disability (like ESRD)
Have a low income
Medicare covers 80% of your healthcare expenses, while Medicaid helps cover the remaining out-of-pocket costs left by Medicare Parts A and B.
In other words, Medicare covers services that Medicaid doesn't and vice versa.
For example, Medicare may cover your hospital stays, doctor visits, and lab tests, while Medicaid covers your additional expenses like premiums, prescription drugs, eyeglasses, hearing aids and long-term care. Both work together to maximize your benefits and provide comprehensive coverage.
To better understand how these two programs work together, you need to be familiar with two terms: coordination of benefits and crossover claims.
When a person has multiple health insurance plans (like Medicare and Medicaid), providers must coordinate their benefits to avoid overpaying or duplicating coverage. Coordination of benefits determines which health insurance plan should pay for a medical service or claim first.
"Primary" payer — the insurance plan that pays first
"Secondary" payer — the plan that pays second
In general, Medicare is the primary payer, and Medicaid is the secondary payer. This means Medicare will pay for covered medical services first, and Medicaid will pay for any remaining expenses not covered by Medicare — like copayments, deductibles and coinsurance.
A crossover claim is a medical claim submitted to multiple insurance plans. They're used when an individual has two insurance plans that coordinate their benefits.
For example, if you’re enrolled in both Medicare and Medicaid, your provider will submit the claim to Medicare. Medicare will process the claim first and apply any deductibles, coinsurance, or copayments. The claim will then be automatically forwarded to Medicaid. (Note: Your provider doesn't have to bill Medicaid separately for the deductible, coinsurance, or copayments that Medicare applied).
No. You don't need to enroll in a Medigap Plan if you're enrolled in Medicare and are eligible for full Medicaid benefits.
Most of your medical expenses are likely covered if you're dually eligible for Medicare and Medicaid
Insurance companies aren't permitted to sell Medigap policies to Medicare beneficiaries with full Medicaid coverage
Yes! Medigap plans are good for individuals who don't qualify for Medicaid. They're especially helpful if you have a high income or assets and need help with out-of-pocket costs not covered by Original Medicare (Parts A and B).
Medicare, Medicaid, and Medigap are all health insurance programs that cover your medical expenses. Medicaid is specifically designed to help low-income individuals pay for out-of-pocket costs. In contrast, Medigap plans often help high-income individuals — who aren't eligible for Medicaid — pay for their out-of-pocket costs.
You don't need to enroll in a Medigap Plan if you're eligible for both Medicare and Medicaid. Medicaid will likely cover most of your out-of-pocket expenses.
Having multiple health insurance plans can give you more comprehensive coverage. But it can also be confusing. At Fair Square Medicare, we have helped thousands of beneficiaries understand the ins and outs of Medicare and make informed decisions about their coverage. If you have any questions, give us a call at 1-888-376-2028.
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