The Health Law Resource

The Medicaid-Medicare Relationship

Provided by the Health Care Financing Administration ("HCFA")

NOTE: These summaries are very brief, simple versions of complex subjects. They should be used only as general overviews and guides to the Medicare and Medicaid programs.

The Medicaid - Medicare Relationship

Most aged and/or disabled persons who are very poor are covered under both the Medicaid and Medicare programs. These persons may receive the Medicare services for which they are entitled as well as other services available under that State's Medicaid program. As each State elects for its Medicaid Plan, services (such as hearing aids, eyeglasses and nursing facility care beyond the 100 days covered by Medicare) may be provided to these persons by the Medicaid program. And the Medicaid program pays all of the cost-sharing portions of Medicare Part A and B for these fully-eligible persons.

In addition, there are other Medicare beneficiaries (QDWIs, QMBs or SLMBs - see below) who are not fully eligible for Medicaid, but who do receive some help through a State Medicaid program's payment of part or all of the person's Medicare premiums and cost-sharing expenses. Persons identified as Qualified Disabled and Working Individuals ("QDWIs") who lost Medicare benefits because of their return to work are allowed to purchase Medicare HI and SMI coverage. However, the HI premium (but not the SMI premium) must be paid by the State Medicaid program for QDWIs with incomes below 200 percent of the Federal Poverty Level.

Other Medicare beneficiaries who may receive some assistance are those known as Qualified Medicare Beneficiaries ("QMBs") and those known as Specified Low-Income Medicare Beneficiaries ("SLMBs"). For the QMBs, (those Medicare beneficiaries who have incomes below the FPL and resources at or below twice the standard allowed under the SSI program), the State pays all the Medicare cost-sharing expenses and premiums for Medicare HI and SMI. For the SLMBs, (beneficiaries with resources like QMBs, but with slightly higher incomes: less than 110 percent of FPL in 1993 and 1994, and less than 120 percent in 1995), the Medicaid program pays (only) the SMI premiums.

Medicaid is always to be the "payor of last resort"; thus if a person is a Medicare beneficiary, then payments for any services covered by Medicare are made by the Medicare program before any payments are made by the Medicaid program.

Acknowledgements: The written portions, including the summaries of the Medicaid and Medicare programs, were prepared by Mary Onnis Waid in the Office of the Actuary, Health Care Financing Administration, N3-01-23, 7500 Security Blvd. Baltimore, MD 21244-1851. Phone (410)-786-6921. The national health expenditures data and estimates were prepared by the Office of National Health Statistics, also in the Office of the Actuary, HCFA. Historical information was extracted from the Vol. 56, No. 4, Winter, 1993 edition of the Social Security Bulletin.

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