People with Medicare who are also eligible for Medicaid because of high medical expenses can get Medicare prescription drug coverage no matter if they are in the Original Medicare Plan or a Medicare Advantage Plan or if they have existing prescription drug coverage.
What do people with Medicare and Medicaid need to know about Medicare prescription drug coverage?
People with Medicare and Medicaid automatically qualify (and don’t need to apply) for extra help paying for Medicare prescription drug coverage. This means they may pay only a small copayment when they fill prescriptions covered by their Medicare drug plan.
In very limited cases, Medicaid may cover certain drugs that aren't covered by Medicare prescription drug coverage. Except in these limited cases, Medicaid can't cover drugs for people who are enrolled, or who could be enrolled, in a Medicare drug plan.
If a person has Extra Help paying for Medicare prescription drug costs, will the Extra Help affect his or her eligibility for Medicaid?
. A person's eligibility for Extra Help doesn't affect their eligibility for Medicaid. As noted above, the individual's Medicaid will make them automatically eligible for Extra Help.
However, it's possible that Extra Help could affect the way a person becomes eligible for Medicaid. A person whose income is too high to qualify for Medicaid might still be able to get Medicaid
if their uncovered medical costs or cost sharing
(such as premiums and deductibles) exceed their available income
. In this situation, most states permit a person to "reduce" their countable income by subtracting the medical expenses and cost-sharing from their income. This process is called the "spend down
When a person who qualifies for Medicaid through a spend down (and is eligible for Extra Help), the Extra Help the person gets will potentially reduce the medical expenses they would otherwise use to meet spend down. This might change the speed that the person meets their spend down to qualify for Medicaid.
The example below shows how qualifying for Extra Help may affect Medicaid eligibility.
Julie has Medicare and gets $700 a month in Social Security. Her income is too high for her to qualify for Medicaid in her state. Her state’s Medicaid income limit is $500 a month, which means she must have at least $200 a month in medical expenses to spend down to the state's limit. She pays $150 a month out-of-pocket for prescription drugs and $75 most months for visits to her doctors, for a total of $225 per month. After she has $200 in medical expenses, she qualifies for Medicaid. Medicaid pays the additional $25 of her medical expenses, leaving her with $500 for other expenses. Julie gets Medicaid and automatically qualifies for Extra Help paying Medicare prescription drug costs for the rest of the calendar year, even if she doesn't qualify for Medicaid in some later months because she has lower medical expenses..
Julie gets Medicaid and automatically qualifies for Extra Help paying Medicare prescription drug costs for the rest of the calendar year, even if she doesn’t qualify for Medicaid in some later months because she has lower medical expenses.
With Extra Help and a Medicare drug plan, Julie pays no monthly premium, has no deductible, and pays only small copayments. Her copayments will be $1 for each of her 10 generic prescriptions, for a total of $10. She spends $75 for her doctor visits, for a total of $85 in medical expenses. Her medical expenses are no longer high enough to qualify for Medicaid (she doesn’t exceed her $200 limit under spend down). But the Extra Help she gets increases the income available to her.
She now has $615 available for other expenses, $115 more than she had before getting the Extra Help.
During a month where Julie's medical expenses for items other than prescription drugs are high, she will qualify for Medicaid once she has medical expenses of at least $200
. For example, Julie has another $210 in medical expenses (like doctor visits) and $10 in total prescription drug copayments for a total of $220. She meets her spend down amount and qualifies for Medicaid. She can still rely on the Medicaid program in months when she has higher medical expenses.
What if a person is notified that he or she no longer qualifies for Extra Help as of January 1 next year?
Month with High Medical Expenses
Month with Low Medical Expenses
Month with High Medical Expenses
|Julie’s Medicaid Spend down Requirement--$200 in Medical Expenses to reach $500 in Monthly Income
|Julie’s Drug Spending
|Other Medical Expenses
|Julie’s Total Medical Expenses
|Meets spend down requirement and qualifies for Medicaid?
|Julie’s out-of-pocket spending for Medical Care
||$200 (Medicaid pays $25)
||$200 (Medicaid pays $20)
|Julie’s cash available for other expenses
Each fall, Medicare uses data from the states to decide whether a person will continue to automatically qualify for Extra Help for the coming year.
Using the example above, let’s say Medicare determines that Julie no longer automatically qualifies for Extra Help. Medicare reviews data from her state for a month where she doesn't qualify for Medicaid (month 2). Medicare sends her a gray letter saying she doesn't automatically qualify and encourages her to apply for Extra Help through Social Security to see if she qualifies based on her income and resources. Even though she no longer automatically qualifies, Julie may still qualify for Extra Help if she applies.
After not qualifying (month 2), Julie can meet spend down again in a later month (month 3). Her state tells Medicare, and she gets a letter from Medicare saying she automatically qualifies for Extra Help beginning from the month she qualified for Medicaid at least until December 31 of the same year.
For more information about Medicare prescription drug coverage…
- Visit Medicare.gov/find-a-plan to get personalized information about Medicare
- Call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048
- Call your State Health Insurance Assistance Program (SHIP). Visit shiptacenter.org or call 1-800-MEDICARE for the phone number.
You have the right to get Medicare information in an accessible format, like large print, Braille, or audio. You also have the right to file a complaint if you feel you've been discriminated against. VisitMedicare.gov/about-us/nondiscrimination/accessibility-nondiscrimination.html, or call 1-800-MEDICARE (1-800-633-4227) for more information. TTY users can call 1-877-486-2048.
Source: CMS Pub. No. 11249-P