How States and the Federal Medicare Program Work Together
Key Takeaways
- 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.
- Forty states and Washington D.C. have expanded Medicaid benefits; the other 10 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?
Forty states and Washington D.C. have adopted Medicaid expansion. At the start of 2024, the following 10 states have rejected Medicaid expansion:
- Alabama
- Florida
- Georgia
- Kansas
- Mississippi
- South Carolina
- Tennessee
- Texas
- Wisconsin
- Wyoming
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 annual income is below a certain limit: under $21,870 for individuals or $29,580 for married couples, as of 2023. 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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How is Medicaid funded?
How do I enroll in Extra Help for prescription drugs?
You may automatically be eligible if you have Medicare and:
- Are dual eligible with Medicaid.
- Receive Medicare Savings Program help to pay your Part B premiums.
- Claim Supplemental Security Income (SSI) benefits.
Sources
- Medicaid. Medicaid.gov.
- Eligibility. Medicaid.gov.
- Status of State Medicaid Expansion Decisions: Interactive Map. KFF.org.
- Financial Management. Medicare.gov.
- Lower prescription costs. Medicare.gov.
This website is operated by GoHealth, LLC., a licensed health insurance company. The website and its contents are for informational and educational purposes; helping people understand Medicare in a simple way. The purpose of this website is the solicitation of insurance. Contact will be made by a licensed insurance agent/producer or insurance company. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. Our mission is to help every American get better health insurance and save money.
Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.