Whether you need supplemental insurance depends on which program covers you first

If you have both Medicare and Medicaid, you do not buy a separate supplemental policy. Medicaid itself acts as your supplemental coverage — it pays Medicare's deductibles, copayments, and coinsurance. The two programs work together automatically once both know about each other. Your Medicaid program handles the secondary payment without you filing separate claims or choosing a plan.

The situation is different if you have Medicare but no Medicaid. In that case, you may want to buy a Medigap policy (supplemental insurance sold by private insurers) to cover what Medicare does not pay. But if Medicaid is already covering those gaps, you have no reason to pay for Medigap on top of it.

The key is making sure both programs know you have the other. Many people with both are called dual may be able to access or dually may be able to access, and the coordination between the two is automatic once you enroll in both. If you have applied for Medicaid but have not yet been approved, or if you recently became may be able to access for Medicare, contact your state Medicaid office to confirm they have your Medicare information on file.

Key Takeaways

  • Medicaid covers the out-of-pocket costs that Medicare does not pay, so you do not need to buy a separate Medigap policy if you have both programs.
  • The two programs coordinate automatically once both are aware you have the other, with Medicaid paying second.
  • You must report your Medicare enrollment to your state Medicaid program so they can process claims correctly.
  • If you have Medicare but Medicaid has denied you or you do not yet may have access to, then a Medigap policy may reduce your out-of-pocket costs.
  • Medigap policies are sold by private insurance companies and have their own enrollment periods and costs.

How Medicare and Medicaid coordinate when you have both

When you are enrolled in both programs, Medicare is always the primary payer. This means Medicare processes your claim first and pays its share of the bill. Medicaid then receives the claim and pays what Medicare did not cover — the deductible, copay, or coinsurance amount.

You do not choose this order or file anything extra. The provider's billing office sends the claim to Medicare first. Once Medicare pays, the remaining balance automatically goes to Medicaid. From your perspective, you show your Medicare card at the doctor's office, and the billing staff handles the rest. In most cases, you owe nothing out of pocket.

This coordination only works if both programs have current information about you. When you enroll in Medicare (usually at age 65), you must tell your state Medicaid office right away. If your state has not been notified, Medicaid may not know to pay the secondary portion, and you could receive a bill you should not have to pay.

What happens if you have Medicare but Medicaid denied you

If you applied for Medicaid and were denied, or if your income is slightly above your state's Medicaid limit, you have Medicare coverage but no secondary payer. In this situation, you will owe Medicare's deductibles and copayments yourself unless you buy a Medigap policy.

A Medigap policy is insurance sold by private companies like AARP, Humana, or United Healthcare. It covers some or all of the costs that Medicare leaves with you. The amount you pay in premiums, and what the policy covers, varies by company and by which "plan letter" you choose (plans are labeled A through N). Unlike Medicaid, Medigap is not free — you pay a monthly premium in addition to your Medicare Part B premium.

Medigap enrollment has strict timing rules. You have the best rates and broadest choice if you enroll within six months of turning 65 or first enrolling in Medicare Part B. If you miss that window, insurers can charge you more or deny you coverage based on your health history. Because of this, if you think Medicaid will deny you, it is worth explore for Medigap during your initial Medicare enrollment period rather than waiting.

The difference between Medicaid coverage and Medigap coverage

Medicaid is a joint federal and state program that covers low-income people of any age. It covers the full range of medical services — doctor visits, hospital stays, prescription drugs, dental, vision, and long-term care — depending on your state. Medicaid has no premiums, no deductibles, and no copayments in most states (some states charge small copays). If you may have access to for Medicaid, it is always the better deal than Medigap.

Medigap is supplemental insurance that only works alongside Medicare. It does not cover services Medicare does not cover — so it will not pay for dental, vision, hearing aids, or long-term care. It only fills in the gaps that Medicare leaves (deductibles and copayments). Medigap has monthly premiums that range widely depending on your age, location, and the plan you choose. For someone on a fixed income, Medigap can be expensive.

If you have both Medicare and Medicaid, you already have the better coverage. Medicaid covers everything Medigap does, plus many services Medigap does not. You should never be sold a Medigap policy while you have active Medicaid coverage — it would be a waste of money.

What to do if you are unsure whether your programs are coordinating

Call your state Medicaid office and ask them directly: "I have Medicare and Medicaid. Do you have my Medicare information on file?" Provide your Medicare number. They can tell you in minutes whether the coordination is set up correctly.

If they do not have your Medicare number, give it to them over the phone. They will update your file. You may also need to mail or upload a copy of your Medicare card to complete the record. Ask what documents they need and whether they can accept them by email or mail.

If you receive a bill for a service that should have been covered by Medicaid as secondary payer, do not pay it when ready. Contact your state Medicaid office with the bill and your claim number. They can investigate whether the claim was processed correctly and may be able to recover the payment from the provider.

State variations in how Medicaid covers Medicare costs

Every state's Medicaid program covers Medicare's deductibles and copayments for people who are dual may be able to access. However, the amount of coverage can vary slightly by state and by which Medicaid category you fall into (for example, Medicaid for seniors versus Medicaid for people with disabilities).

Some states also have special programs for dual may be able to access people that coordinate care differently. For example, some states run Medicare-Medicaid Plans (also called integrated plans) that combine both programs into one plan you enroll in. These are optional — you can stay in regular Medicare and Medicaid instead if you prefer. If your state offers one, you will receive information about it during your annual enrollment period.

To find out exactly what your state's Medicaid program covers for you, contact your state Medicaid office directly. The coverage is usually comprehensive, but the details matter if you are trying to predict your out-of-pocket costs.

When you might still want to look at Medigap even with Medicaid

In rare cases, someone with both Medicare and Medicaid might consider a Medigap policy. This could happen if your Medicaid coverage is about to end (for example, if your income is rising and you will soon exceed the limit) and you want to lock in Medigap rates before that happens. Once Medicaid ends, you lose the right to enroll in Medigap at standard rates, and insurers can charge you more or deny you based on health.

Another scenario is if you are moving to a different state and are unsure whether your new state's Medicaid will cover you when ready. In that gap period, Medigap could protect you from large bills. However, this is a complex situation and worth discussing with your state Medicaid office before you move.

In almost all other cases, if you have Medicaid, you do not need Medigap. The combination of Medicare and Medicaid is more comprehensive and costs you less.

Frequently Asked Questions

Can I have both Medicare and Medicaid at the same time?

Yes. Many people have both, especially those over 65 with low income. The two programs are designed to work together, with Medicare paying first and Medicaid covering what Medicare does not. You must enroll in both separately, but once you are in both, the coordination is automatic.

Do I have to pay premiums for Medicaid if I also have Medicare?

No. Medicaid has no premiums regardless of whether you have Medicare. You pay the standard Medicare Part B premium (currently around $165 per month, though this changes yearly), but Medicaid itself is free. Some states charge small copayments for certain services, but most do not.

What if my doctor's office says I need to buy Medigap?

They are mistaken or misinformed. If you have active Medicaid coverage, you do not need Medigap. Medicaid already covers the costs that Medigap would pay. Tell the office you have Medicaid as your secondary payer and ask them to resubmit the claim to Medicaid if they have not already done so.

Will Medicaid cover prescription drugs if I have Medicare?

Medicare Part D covers prescription drugs for everyone with Medicare. Medicaid will cover the copayments and deductibles that Part D leaves with you. Some states also cover drugs that Part D does not, depending on your specific Medicaid category. Contact your state Medicaid office to learn what drugs are covered in your situation.

What happens to my Medicaid if my income goes up?

If your income rises above your state's Medicaid limit, you will lose Medicaid coverage. At that point, you will have Medicare only, and you should enroll in a Medigap policy if you have not already. You have a special enrollment period (usually 60 days) to enroll in Medigap without penalty after Medicaid ends, so contact an insurer as soon as you know your coverage will end.