If I Have Medicare and Medicaid Do I Need a Supplement?

Navigating health insurance can be complex, especially when managing multiple programs. Many individuals enrolled in both Medicare and Medicaid wonder if additional supplemental insurance is necessary. This article clarifies the roles of Medicare and Medicaid and addresses the common question about the need for supplemental coverage when both are present.

Medicare’s Coverage

Medicare is a federal health insurance program primarily for individuals aged 65 or older, younger people with certain disabilities, and people with End-Stage Renal Disease. Original Medicare consists of two main parts: Part A and Part B. Part A, known as Hospital Insurance, helps cover inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health services. In 2025, the Medicare Part A inpatient hospital deductible is $1,676 per benefit period, with daily coinsurance applying for extended stays and skilled nursing facility care.

Medicare Part B, or Medical Insurance, covers doctor’s services, outpatient care, medical supplies, and preventive services. Beneficiaries typically pay a monthly premium, which is $185 per month for most individuals in 2025. After meeting an annual deductible, set at $257 in 2025, Medicare generally pays 80% of the Medicare-approved amount for most Part B services, leaving the beneficiary responsible for the remaining 20% coinsurance. Additionally, Medicare Part D provides outpatient prescription drug coverage through private insurance plans, which beneficiaries can choose to enroll in.

Medicaid’s Role

Medicaid operates as a joint federal and state program designed to provide health coverage to individuals and families with limited income and resources. Eligibility for Medicaid is determined by income and asset limits, which can vary based on the specific state and household composition.

The program generally covers a wide array of medical services, including doctor visits, hospital stays, long-term care services, and prescription drugs. A significant aspect of Medicaid is that it often involves very low or no out-of-pocket costs for eligible beneficiaries. While core benefits are federally mandated, the specific scope of services and eligibility criteria can differ from one state to another.

How Medicare and Medicaid Coordinate

Individuals who qualify for both Medicare and Medicaid are referred to as “dual eligible” beneficiaries. In these situations, Medicare functions as the primary payer for Medicare-covered services. This means Medicare pays its share of the healthcare costs first, as it would for any other beneficiary.

Following Medicare’s payment, Medicaid acts as the secondary payer. Its role is to cover the remaining out-of-pocket costs associated with Medicare-covered services, such as deductibles, copayments, and coinsurance. Furthermore, Medicaid may also cover services that Medicare does not, including long-term care, certain dental services, eye exams, and non-emergency medical transportation, depending on state-specific programs.

Medicare Supplement Plans

Medicare Supplement Insurance plans, often called Medigap policies, are private insurance policies designed to work alongside Original Medicare. These plans help cover some of the out-of-pocket expenses that Original Medicare does not, such as deductibles, copayments, and coinsurance.

Medigap plans are standardized by federal law, meaning that plans of the same letter (e.g., Plan G, Plan N) offer the same basic benefits regardless of the private insurance company selling them. For example, most Medigap plans cover the Medicare Part A deductible, which is $1,676 in 2025, and the 20% Part B coinsurance. It is important to note that Medigap policies do not include prescription drug coverage; for that, a separate Medicare Part D plan is necessary.

The Need for a Supplement

For individuals who have both Medicare and full Medicaid coverage, generally, a Medicare Supplement plan is not necessary. This is because Medicaid already fulfills the function of a supplemental policy by covering most, if not all, of the out-of-pocket costs that Original Medicare leaves behind. Medicaid pays the deductibles, coinsurance, and copayments for Medicare-covered services, making a separate Medigap policy redundant.

Dual eligible individuals also have access to Medicare Advantage Special Needs Plans (D-SNPs), which are designed specifically for them. These plans integrate Medicare and Medicaid benefits, often offering additional benefits and typically having no monthly premium, providing another avenue for comprehensive coverage without the need for a Medigap plan.