How States and the Federal Medicare Program Work Together
Written by: Aaron Garcia
Reviewed by: Michael Howard, Licensed Insurance Agent
Every state has resources for residents with lower incomes, including Medicaid and State Health Insurance Assistance Programs (SHIP).
States administer Medicaid, but the federal government pays for part of the program.
Thirty-nine states and Washington D.C. have expanded Medicaid benefits; the other 12 states factor income along with disabilities, family size and more.
Your SHIP will show you which resources are available for residents with lower incomes in your state, including Medicaid and Medicare Savings Programs.
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While Medicare is a federal program, your state of residence determines many of your health insurance options if you need help paying for your health insurance.
The most well-known example is Medicaid. Medicaid is a state-run program for residents with limited resources to afford health insurance. How much your state is willing to help depends primarily on whether it has expanded its Medicare coverage.
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What is Medicaid Expansion?
Initially, Medicaid eligibility was awarded based on disabilities, household size and family status. The Affordable Care Act (ACA) expanded that eligibility to include individuals and families based on income alone. The expansion of eligibility raises the number of people that qualify for Medicaid.
What are the Medicaid Income Limits?
States are given the option to determine eligibility based on the Federal Poverty Level (FPL). The amount of your income at or below FPL to qualify can vary based on whether your state of residence expanded Medicaid coverage. In states without expanded Medicaid, you won’t qualify without meeting certain income limits and other requirements.
How Do I Know If My State Chose Medicaid Expansion?
Thirty-eight states and Washington D.C. have adopted Medicaid expansion. At the start of 2022, the following 12 states have rejected Medicaid expansion:
- North Carolina
- South Carolina
- South Dakota
What Are State Health Insurance Assistance Programs?
If you want to see what low-income programs are available in your state, visit your local State Health Insurance Assistance Programs (SHIP). SHIPs are federally funded agencies that are run by the individual states.
Medicare Savings Plan
Your state may have resources available to help you pay for different medical costs. These can include your Medicare Part A and B premiums, deductibles and coinsurance. Four examples of these programs are:
- Qualified Disabled and Working Individuals (QDWI) Program
- Qualifying Individual (QI) Program
- Qualified Medicare Beneficiary (QMB) Program
- Specified Low-Income Medicare Beneficiary (SLMB) Program
Extra Help savings on prescriptions
You may qualify for lowered premiums and deductibles on your prescription drug plan if your income is $15,510 in 2022 or less per year ($30,950 for married couples). This assistance is called Extra Help, and it’s a Low-Income Subsidy (LIS) funded by the federal government.
If I’m a Medicare beneficiary, can I still get state Medicaid benefits?
Yes, many beneficiaries qualify for both Medicare and Medicaid. When a person is dual eligible, Medicare pays first, and Medicaid pays for services not covered by Medicare as the secondary payer. Dual-eligible coverage includes:
- Medicare coverage
- Physician services
- Hospital stays
- Prescription drugs
- Skilled nursing facility care
- Home health visits
- Hospice care
- Medicaid coverage
- Long-term nursing facility services
- Home health services
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