The term “dual eligible” refers to individuals who qualify for and are enrolled in both Medicare and Medicaid, two distinct government health programs. Medicare is a federal program primarily covering those aged 65 or older, younger people with certain disabilities, or those with End-Stage Renal Disease, without regard to income. Medicaid, conversely, is a joint federal and state program providing health coverage to people with limited income and resources. This dual status is complex because it involves two different systems of coverage, but it provides beneficiaries with significant financial protection and broader access to medical services. This status is particularly beneficial for low-income individuals who would otherwise struggle to manage the out-of-pocket costs associated with Medicare. Understanding the interaction between these two programs is necessary to demystify what dual eligibility means for coverage and personal medical costs.
Defining Dual Eligible Status and Categories
Dual eligible beneficiaries fall into different categories that determine the level of Medicaid assistance they receive. The most comprehensive status is Full Benefit Dual Eligible (FBDE), meaning the individual qualifies for the full range of Medicaid benefits in addition to their Medicare coverage. FBDEs receive full coverage for services not covered by Medicare, such as long-term services and supports, and automatically qualify for the Extra Help program to cover prescription drug costs.
The other main category involves Partial Benefit Dual Eligibles, who are enrolled in a Medicare Savings Program (MSP). These MSPs provide financial assistance to help pay for Medicare premiums and cost-sharing, but they do not grant full Medicaid benefits. The four main MSPs, like the Qualified Medicare Beneficiary (QMB) program, cover the Part A and Part B premiums, deductibles, coinsurance, and copayments, depending on the specific program.
Requirements for Qualification
To achieve dual eligible status, a person must meet the separate eligibility criteria for both Medicare and Medicaid. The first requirement is meeting the conditions for Medicare enrollment, which is not based on income or assets. This generally means being 65 or older, having received Social Security Disability Insurance benefits for 24 months, or having End-Stage Renal Disease.
The second, more restrictive requirement is qualifying for Medicaid, which mandates passing a financial means test for both income and financial resources (assets). Medicaid income limits are tied to the Federal Poverty Level (FPL), and the exact thresholds vary significantly by state and by the specific Medicaid pathway being used. For instance, a single person may need to have an income below a certain percentage of the FPL.
In addition to income, applicants must also meet strict limits on countable assets, such as bank accounts and investments. These resource limits are generally low, often set at $2,000 for an individual, though they can be higher for some Medicare Savings Programs. The necessity of meeting these two separate sets of criteria makes dual eligibility a status primarily for the lowest-income Medicare beneficiaries.
Coordination of Coverage Between Programs
For dual eligible individuals, the two programs coordinate coverage through a specific hierarchy of payment known as coordination of benefits. Medicare is always designated as the primary payer for Medicare-covered services. This means that when a dual eligible person receives a covered medical service, the claim is first submitted to Medicare, which pays its share of the approved amount.
Medicaid then functions as the secondary payer, stepping in to pay the remaining costs for services also covered by Medicare. For Full Benefit Dual Eligibles, Medicaid covers the gaps left by Medicare, such as deductibles, coinsurance, and copayments, effectively resulting in little to no out-of-pocket spending for the beneficiary. This systematic coordination ensures that a health claim is paid correctly.
Impact on Out-of-Pocket Costs and Care
The practical result of dual eligibility is a substantial reduction, and often near elimination, of out-of-pocket health care expenses for the individual. Because Medicaid acts as the secondary payer for covered services, it pays the Medicare Part A and Part B premiums, deductibles, copayments, and coinsurance that the beneficiary would otherwise owe. This financial relief is significant, as it can save a person thousands of dollars annually in medical costs.
Dual status also expands the range of available medical services by providing access to benefits that Medicare does not cover. The most notable of these expanded benefits is coverage for long-term services and supports (LTSS), such as extended nursing home stays or home and community-based care. Medicaid is the main payer for this type of long-term care, which is not covered by Medicare, providing a safety net for individuals with significant functional needs. Beyond long-term care, full Medicaid benefits can also include coverage for services like routine vision, dental care, and non-emergency medical transportation.