Medicaid and private insurance are two of the most prevalent health insurance options in the United States. While they differ in many ways, some people may wonder whether it’s possible to have both types of coverage. In this comprehensive guide, we’ll delve into the pros and cons of having Medicaid and private insurance simultaneously.
Key Takeaways
Medicaid is a health insurance plan jointly funded by federal and state governments, designed to provide coverage to Americans with low income. On the other hand, private insurance includes plans offered by employers, Obamacare plans purchased through the Marketplace, or those purchased directly through private insurance companies. You can have Medicaid and private health insurance at the same time, and there are some advantages and disadvantages to doing so. In many cases, if you’re eligible for both Medicaid and private insurance, your private insurance plan will be the primary coverage, and your Medicaid coverage will be supplemental.
Medicaid and Private Insurance Eligibility
Generally, you can buy private insurance through your employer (if your employer offers it), directly from an insurer, or via online marketplaces. For Medicaid, states generally must cover individuals with low incomes, children and pregnant women who meet certain requirements, and those eligible for Supplemental Social Security Income—although the exact requirements may differ slightly from state to state.
How Having Medicaid and Private Insurance Works
If you have both Medicaid and private insurance, it’s crucial to understand how they interact. This interaction is known as the “coordination of benefits” (COB). In most cases, when you have Medicaid as well as another health insurance coverage, Medicaid serves as last-resort supplemental coverage—often known as “wrap-around” coverage. This means your other health insurance plan is required to pay for covered expenses first. It’s only after your other plan has kicked in first that Medicaid will cover what’s left.
Advantages of Having Medicaid and Private Insurance
Carrying both Medicaid and private insurance can drastically reduce your out-of-pocket costs, especially if your private insurance plan has a high deductible or pays for only a small percentage of your care. For example, if you get a hospital bill for $5,000 and you have a coinsurance of 20% on your private insurance plan, your plan will cover 80% of your hospital bill, which amounts to $1,000. Under normal circumstances, you would be on the hook for the remaining $1,000. But if you have Medicaid as supplemental coverage, it would pay for the remaining balance, minus any coinsurance or copay you have. So if your Medicaid coverage requires a copayment of $50, you would pay that amount while Medicaid covers the other $950.
Disadvantages of Having Medicaid and Private Insurance
If you’re eligible for Medicaid, you’re no longer eligible for any premium tax credits on Obamacare coverage. As a result, rather than Medicaid saving you money, it could actually increase your premiums if you continue to carry the plan you bought from the Marketplace. There could also be a disadvantage even if your private insurance plan isn’t a Marketplace plan, but is provided by your employer. If you choose to keep Medicaid and your employer insurance, maintaining your employer-sponsored coverage likely means continuing to pay substantial costs for premiums.
Is It Worth It To Keep Both?
The decision to keep both Medicaid and private insurance depends on your individual circumstances. If you have a high-deductible health plan (HDHP) and you qualify for Medicaid, it might be worth it to keep both. Medicaid could cover the high deductible and out-of-pocket maximums of your HDHP. However, if your private insurance is a low-deductible plan with low copayments, it might not be worth the extra cost to keep both.
Medicaid vs. Private Insurance
While both Medicaid and private insurance provide health coverage, they differ in several ways. Medicaid is a public program that provides health coverage to people with low income, including some low-income adults, children, pregnant women, elderly adults, and people with disabilities. Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government.
On the other hand, private insurance is often provided through employers, but you can also purchase it individually. Private insurance is often more expensive than Medicaid and some people may not qualify for private insurance due to pre-existing conditions or other factors.
Medicaid and Other Payers
Medicaid interacts with other payers when Medicaid beneficiaries have other sources that are legally liable for payment of their medical costs. These may include private insurance, Medicare, other public programs such as the Ryan White program, workers’ compensation, and amounts received for injuries in liability cases. The program also interacts with the State Children’s Health Insurance Program (CHIP) when states provide Medicaid coverage to beneficiaries using CHIP funds.
Canceling a Marketplace plan when you get Medicaid or CHIP
Once you get a final determination that you’re eligible for Medicaid or the Children’s Health Insurance Program (CHIP) that counts as qualifying health coverage, you’re no longer eligible for a Marketplace plan with advance payments of the premium tax credit and savings on out-of-pocket costs. You should immediately end Marketplace coverage with premium tax credits or other cost savings for anyone in your household who is determined eligible for or already enrolled in Medicaid or CHIP that counts as qualifying health coverage.
You may get a notice from the Marketplace
If records show you’re enrolled in both a Marketplace plan with premium tax credits or other cost savings and Medicaid or CHIP, you may get a notice in the mail that lists the household members who are enrolled in both kinds of coverage. The notice explains what to do next.
If you decide to pay full price for a Marketplace plan
You can have both a Marketplace plan and Medicaid or CHIP, but you’re not eligible to receive advance payments of the premium tax credit or other cost savings to help pay for your share of the Marketplace plan premium and covered services. If you or others on your Marketplace application choose to have Medicaid or CHIP and full-price Marketplace coverage, you’ll need to take certain steps.
Ending your Marketplace plan
If you’re found eligible for Medicaid or CHIP, you should end your Marketplace plan with premium tax credits and other cost savings. However, don’t end your Marketplace plan before you get a final decision of your Medicaid or CHIP eligibility. If you’re found ineligible for Medicaid or CHIP, you can’t re-enroll in the Marketplace plan unless you qualify for a Special Enrollment Period. You’d have to wait for the next Open Enrollment Period and may have a gap in coverage.
FAQs
Can you have both Medicaid and private health insurance at the same time?
Yes, it is possible to have both Medicaid and private health insurance at the same time. This is known as “dual eligibility.” However, if you are eligible for both programs, your private insurance will generally be billed first before Medicaid pays for any remaining expenses.
Why might someone want to have both Medicaid and private insurance?
Having both types of coverage can provide additional benefits that may not be covered under one plan or the other. For example, a person with special medical needs may find that some treatments or medications are only fully covered by their private insurance plan while others require additional support from Medicaid.
Are there any downsides to having dual eligibility for Medicaid and private health insurance?
There can be some downsides associated with being dually eligible, such as complexity in navigating two different sets of rules and limitations on services or providers available under each plan. Additionally, depending on income levels, beneficiaries may need to pay premiums or deductibles for their Medicare coverage even though they also receive benefits through traditional public assistance programs like Medicaid.
Conclusion
In conclusion, while it is possible to have both Medicaid and private insurance simultaneously, there are some considerations before choosing this route such as billing complexity. However, depending on policy specifics, an individual may be better off financially paying for a supplemental plan without eligibility deterrence through their employer group health plan. And because every situation is unique – it’s best to consult with an independent advisor well versed in Dual Eligibility Medicare-Medicaid programs offered within your local state. Follow these tips and you will have the knowledge needed to make an informed decision regarding whether or not dual-coverage is right for you.
FAQs
**H3: Can I have both Medicaid and private insurance at the same time?**
Answer: Yes, you can have both Medicaid and private insurance, a situation known as dual eligibility. However, it’s essential to understand how these two types of insurance interact to maximize coverage.
**H3: How does having both Medicaid and private insurance affect my out-of-pocket costs?**
Answer: Generally, Medicaid acts as the primary payer, and private insurance is secondary. Medicaid covers the costs covered under Medicaid, and your private insurance may help pay for expenses not covered by Medicaid. Know the details of your coverage to minimize out-of-pocket costs.
**H3: Which benefits are typically covered by Medicaid vs. private insurance in a dual eligibility situation?**
Answer: Medicaid generally covers essential services like inpatient and outpatient care, prescription drugs, and home health care. Private insurance may cover additional benefits such as dental and vision care, depending on your policy. Ensure a clear understanding of both insurance plans’ benefits to utilize them effectively