As you approach your 65th birthday, becoming eligible for Medicare is a significant milestone. For individuals already enrolled in Medicaid, this transition isn't about choosing one program over the other. In fact, most low-income seniors can become "dual-eligible" for both Medicare and Medicaid, a status that provides extensive healthcare coverage with minimal out-of-pocket costs. Understanding how this transition works and what your eligibility options are is vital for a seamless shift in coverage.
The Dual-Eligible Advantage: How Medicare and Medicaid Work Together
Being dual-eligible means you have Medicare as your primary insurance and Medicaid as your secondary insurance. This powerful combination closes many of the coverage gaps that either program would have individually.
- Medicare pays first: For any medical service or supply covered by both programs, Medicare pays its share first.
- Medicaid pays second: After Medicare has paid, Medicaid steps in to cover most of the remaining costs, such as premiums, deductibles, and coinsurance.
- Expanded benefits: Medicaid can also cover certain services that Medicare doesn't, such as long-term care, some dental and vision services, and non-emergency medical transportation.
For most dual-eligible individuals, this means having comprehensive coverage with significantly reduced out-of-pocket expenses.
The Shift in Eligibility: From ACA to SSI Rules
One of the most important changes for someone on Medicaid is the shift in eligibility rules at age 65. Many people under 65 are enrolled in Medicaid through the Affordable Care Act (ACA) expansion, which relies solely on income based on Modified Adjusted Gross Income (MAGI). However, MAGI rules do not apply to those 65 and older.
At 65, your eligibility for Medicaid is re-evaluated based on new rules that consider both your income and assets. This can cause some individuals who qualified easily under ACA rules to no longer meet the more restrictive state income and asset limits for senior Medicaid. Even if your income is slightly too high for full Medicaid, you may still qualify for a Medicare Savings Program (MSP), which is a form of partial Medicaid that helps with Medicare costs.
Key considerations during the transition
To ensure a smooth transition and maximize your benefits, consider the following key points:
- Enroll in Medicare: It is critical to enroll in Medicare during your Initial Enrollment Period (IEP), which begins three months before you turn 65 and ends three months after. If you're already receiving Social Security benefits, you will be automatically enrolled. Otherwise, you must apply through the Social Security Administration.
- Confirm Dual-Eligible Status: The state Medicaid agency will re-evaluate your eligibility around your 65th birthday. You may need to complete new paperwork to confirm your income and assets meet the new standards for seniors.
- Explore Managed Care Plans: For dual-eligibles, a Dual-Eligible Special Needs Plan (D-SNP) may be an excellent option. A D-SNP is a type of Medicare Advantage plan that combines and coordinates both your Medicare and Medicaid benefits through a single, managed care plan. Many D-SNPs offer extra benefits not covered by Original Medicare, like dental and vision care.
- Consider Medicare Savings Programs (MSPs): Even if you don't qualify for full Medicaid, an MSP can help significantly. These programs, which vary by state, can pay for Medicare Part B premiums, deductibles, coinsurance, and copayments. Qualifying for an MSP also automatically enrolls you in Medicare's Extra Help program for prescription drugs.
How the Transition Changes Coverage and Cost
| Feature | Before 65 (Medicaid) | After 65 (Dual Eligible) |
|---|---|---|
| Primary Payer | Medicaid | Medicare |
| Secondary Payer | N/A | Medicaid |
| Eligibility Rules | Often based on MAGI (Modified Adjusted Gross Income) with no asset limit under ACA expansion. | Based on both income and assets, with more restrictive limits depending on the state. |
| Enrollment | Can enroll anytime if eligible. | Must enroll in Medicare during Initial Enrollment Period to avoid late penalties. |
| Out-of-Pocket Costs | Typically very low or $0, but may vary by state. | Generally very low or $0, as Medicaid covers most Medicare costs. |
| Long-Term Care | Covered by Medicaid (e.g., nursing home care). | Covered by Medicaid after Medicare has paid any covered services. |
| Prescription Drugs | Covered by Medicaid. | Covered through Medicare Part D, with cost assistance via Extra Help. |
Conclusion
Turning 65 while on Medicaid is not an event that will automatically cause you to lose your health coverage. Instead, it is a transition that opens the door to dual eligibility for both Medicare and Medicaid. This status provides a robust safety net, with Medicare acting as the primary payer and Medicaid covering remaining costs. The key is to be proactive: understand your state's eligibility requirements, enroll in Medicare on time to avoid penalties, and consider a D-SNP to streamline your care. Taking these steps will ensure you continue to receive the comprehensive and affordable healthcare you need as you enter this new phase of life.
How to get started
To begin your transition, contact your local State Health Insurance Assistance Program (SHIP) for free, unbiased counseling on your Medicare and Medicaid options. They can provide guidance specific to your situation and state.
