How Medicare and Medicaid Work Together When You Have Both

Medicare and Medicaid coordinate, but they are separate programs with different rules

If you have both Medicare and Medicaid, they work together to share the cost of your healthcare. Medicare pays first for the services it covers, then Medicaid steps in to pay some or all of what Medicare does not cover — including Medicare's deductibles, copayments, and coinsurance. This arrangement is called dual coverage, and it can lower your out-of-pocket costs significantly.

The two programs do not merge or combine. They remain independent, each with its own rules about what they cover and how much they pay. But because they coordinate, you do not have to file separate claims or pay one program and then ask the other for reimbursement. The coordination happens behind the scenes at the provider level.

Not everyone with Medicare qualifies for Medicaid. Medicaid is a state-run program with income and asset limits that vary by state. Some people have Medicare alone, some have Medicaid alone, and some have both. Understanding which programs you have and how they interact affects which doctors you can see, what you pay, and where you can receive care.

Key Takeaways

• Medicare pays first for covered services, and Medicaid covers some or all of the costs Medicare leaves behind, including deductibles and copayments.
• You must meet your state's Medicaid income and asset limits to have both programs; these limits differ by state and change yearly.
• Providers must accept both Medicare and Medicaid to treat you under dual coverage; some accept only one program or neither.
• Your state Medicaid program determines what extra services Medicaid covers beyond Medicare, such as dental, vision, or hearing aids.
• If you lose Medicaid, you remain on Medicare, but your out-of-pocket costs will increase because you lose the Medicaid cost-sharing help.

How the payment order works when you have both programs

When you receive a covered service, Medicare processes the claim first. It pays its share based on what it covers and what you have already paid toward your deductible. Then the claim automatically goes to Medicaid, which reviews what Medicare paid and what Medicare left unpaid.

Medicaid then decides whether to cover the remaining balance. If Medicaid covers that service, it pays up to the amount Medicaid allows for that service in your state. You are responsible for any difference between what Medicaid allows and what the provider charges, unless your state has rules that prevent balance billing.

This coordination means you typically do not receive a bill from the provider. The provider bills Medicare, receives Medicare's payment, then bills Medicaid for the rest. If both programs have paid, the claim is settled. If Medicaid does not cover the service or has already reached its limits, you may receive a bill for the remaining amount.

Income and asset limits that determine if you can have both

Medicaid is a needs-based program. To have both Medicare and Medicaid, your income and assets must fall below your state's limits. These limits are set by each state and change yearly, usually in January. Some states use the federal poverty level as their limit; others set their own higher or lower.

Income limits for dual coverage typically range from 75% to 100% of the federal poverty level, though some states are more generous. For 2024, the federal poverty level for a single person is around $15,000 per year, but your state's actual limit may be different. You should check your state Medicaid program's website or call your local Medicaid office to learn the current limit in your area.

Asset limits also vary. Some states count your savings, investments, and property toward a limit; others have removed asset limits entirely. If your assets exceed your state's limit, you may lose Medicaid even if your income qualifies. Life insurance, your home, and your car are usually not counted as assets, but the rules differ by state.

What Medicaid covers that Medicare does not

Medicare covers hospital stays, doctor visits, and some skilled nursing care, but it has gaps. Medicaid fills some of those gaps, though what it covers depends on your state. Common services Medicaid covers that Medicare does not include long-term nursing home care, personal care information, dental services, vision care, and hearing aids.

Your state Medicaid program decides which extra services to cover. Some states cover dental cleanings and basic care; others cover only emergency dental work. Some cover routine eye exams and glasses; others do not. If a service matters to you, ask your state Medicaid program whether it is covered in your state.

Medicaid also covers prescription drugs through its own formulary, which is separate from Medicare's drug coverage. If you are on both programs, your Medicaid prescription coverage usually takes priority over Medicare Part D, so you should not enroll in a Part D plan. Your state will tell you whether to use Medicaid or Medicare for prescriptions.

Finding providers who accept both Medicare and Medicaid

Not all doctors, hospitals, or clinics accept both programs. Some accept only Medicare, some accept only Medicaid, and some accept neither. Before scheduling an appointment, always call the provider's office and confirm they accept both your Medicare and your Medicaid.

When you call, give them your Medicare number and your Medicaid number. Ask them to verify both in their system. Some providers accept Medicare but not Medicaid in your state, or vice versa. Confirming ahead of time prevents you from arriving for an appointment only to learn the provider cannot treat you under your coverage.

If you use a Medicare Advantage plan (Part C), your provider network is narrower than Original Medicare. You must use providers in your plan's network. If you also have Medicaid, the provider must accept both your Medicare Advantage plan and Medicaid. This can be harder to find, so network size matters when choosing a Medicare Advantage plan if you have Medicaid.

What happens to your coverage if you lose Medicaid

If your income rises above your state's Medicaid limit, you will lose Medicaid coverage. You remain on Medicare, but you lose the cost-sharing help Medicaid was providing. This means you become responsible for Medicare's deductibles, copayments, and coinsurance again.

If you lose Medicaid, you may want to enroll in a Medigap plan (supplemental insurance) to help cover Medicare's out-of-pocket costs. Medigap is private insurance sold by insurance companies. You have a limited window to enroll in Medigap without medical underwriting — usually 63 days after you lose Medicaid. If you miss this window, insurers can deny you or charge you more based on your health.

You should also check whether you may have access to for the Medicare Savings Program (MSP), which helps people with low income pay Medicare premiums and cost-sharing. MSP has higher income limits than Medicaid, so you might still may have access to even if you no longer may have access to for Medicaid. Contact your state Medicaid office to learn whether MSP is available to you.

How to learn about you have both programs and what your state covers

You can check your Medicare coverage by logging into your account at Medicare.gov or calling 1-800-MEDICARE. Your Medicare card shows your coverage type and your claim number.

To check your Medicaid coverage and what your state covers, contact your state Medicaid program directly. Each state runs its own Medicaid office. You can find your state's office by visiting Medicaid.gov and selecting your state, or by calling your local health department and asking for the Medicaid office phone number.

When you contact your state Medicaid program, ask them: whether you currently have Medicaid, what your income and asset limits are, what services your state covers beyond what Medicare covers, and whether you should enroll in Medicare Part D or use Medicaid for prescriptions. Having this information in writing helps you make decisions about your coverage.

Frequently Asked Questions

If I have both Medicare and Medicaid, do I need to enroll in Part D for prescriptions?

No. If you have Medicaid, your state covers prescriptions through Medicaid, and Medicaid usually takes priority. Enrolling in Part D when you have Medicaid can create conflicts and higher costs. Ask your state Medicaid program which program to use for prescriptions.

Can I have a Medicare Advantage plan if I also have Medicaid?

Yes, but it is more complicated. Your Medicare Advantage plan has a network of providers, and all of them must also accept your Medicaid for you to use them. Some providers accept Medicare Advantage but not Medicaid, which limits your choices. Original Medicare with Medicaid is often simpler.

What if a provider says they do not accept Medicaid?

You can still see that provider, but you will pay out of pocket. Medicare will pay its share, but Medicaid will not. You become responsible for the rest. If cost is a barrier, ask the provider whether they have a payment plan or whether they can refer you to another provider who accepts Medicaid.

Does having both programs mean I pay nothing for healthcare?

Not always. Both programs have limits on what they cover and how much they pay. Some services are not covered by either program. You may still have small copayments or coinsurance, or you may owe the difference if a provider charges more than Medicare and Medicaid allow.

If my income goes up slightly, will I lose Medicaid when ready?

No. Your income is usually checked once a year, often in the month you applied or in January. A temporary increase in income may not affect your coverage. But if your income stays above the limit, you will lose Medicaid at your next renewal. Report major income changes to your state Medicaid office to understand how they affect your coverage.