Many beneficiaries have concerns that when they become eligible for Medicare or an employer-sponsored health insurance plan, they will lose eligibility for Medicaid. However, there are many options for individuals to maintain Medicaid and other insurance. Since it is a financial needs-based program, Medicaid is a payor of last resort. As a result, it encourages beneficiaries to pursue other health insurance options. By accessing other health insurance, that insurance then becomes the primary payer. Some states will require a Medicaid beneficiary to take Medicare if they are eligible. If their employer or a family member’s employer offers the beneficiary “cost-effective” employer-sponsored health insurance, the state may require the beneficiary to take the coverage, and in return, the state will pay the premium. When a beneficiary becomes eligible for new health care coverage, it is important to report this option to a Medicaid eligibility worker to clarify options and responsibilities.
In this blog we will show how Medicaid and Medicare can work together, and how Medicaid applies when a beneficiary becomes eligible for employer-sponsored health insurance.
Medicaid and Medicare
For beneficiaries that receive both SSI and Title II (SSDI) disability benefits, in most states they will eventually be eligible for both Medicare and Medicaid. When a person is eligible for both Medicare and Medicaid, they are “dually eligible” concerning their health insurance. It is also possible that a Title II disability beneficiary can have too much income for SSI but could be eligible for Medicaid through a Medicaid eligibility group that has a higher unearned income limit. (e.g., Medicaid Buy-in, Home and Community Based Service – HCBS waiver, Medically Needy). When this happens, the person will be eligible for both Medicare and Medicaid. When a Medicaid beneficiary has or can get Medicare, most state Medicaid agencies will require the beneficiary to enroll in the Medicare program. When a beneficiary has both Medicare and Medicaid coverage, Medicare always pays first., and Medicaid pays second. Dually eligible individuals often receive assistance with Medicare expenses including premiums, cost sharing, and deductibles.
Medicaid and Employer-Sponsored Health Insurance
In some states, if a beneficiary can get health insurance through their employer, spouses’ employer, or parents’ employer, the state requires the beneficiary to take it. When a Medicaid beneficiary becomes eligible to apply for another form of health insurance, the state Medicaid agency usually will require that the beneficiary report this new option to the Medicaid eligibility worker. The Medicaid staff will ask the beneficiaries for details about the health insurance policy (e.g., monthly premiums amount, deductible, coverage amount, services covered, etc.) With that information the Medicaid staff will determine if the plan is “cost effective.” If it is cost effective, in order to maintain Medicaid, the state may require the beneficiary to take the new health insurance option. Generally., if state Medicaid rules require beneficiaries to take the new option, the state will pay the monthly premium. This is called a Health Insurance Premium Payment (HIPP). In many cases, Medicaid will also pay for cost sharing associated with health insurance, including co-payments and deductibles. If Medicaid does not consider the plan cost effective, generally the state will not require the beneficiary to take the new health insurance option. The beneficiary could still choose to take it if he or she wants, but the state generally will not pay the premium.
Mission Possible has certified Community Work Incentives Counselors on staff to assist you with your health insurance concerns. Call us with questions or for more information 888-359-2366.
~Tina
Resource links used for this bog: https://vcu-ntdc.org/resources/ntcmanual.cfm
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