Maximizing Medicaid and Medicare Dual Eligibility: Strategies to Cut Out-of-Pocket Healthcare Costs

For millions of older adults and individuals with disabilities, being enrolled in both Medicare and Medicaid—known as dual eligibility—can significantly reduce healthcare costs. However, many dual-eligible beneficiaries don’t fully understand how to leverage both programs for maximum benefit. With healthcare costs rising and benefit programs evolving, it’s more important than ever to understand how these two systems can work together.

What Does Dual Eligibility Mean?

Medicare is a federal health insurance program for people aged 65+ and younger individuals with certain disabilities. Medicaid, on the other hand, is a joint federal and state program that provides health coverage to low-income individuals and families. When someone qualifies for both, Medicaid acts as a secondary payer, filling in many of the gaps Medicare doesn’t cover—like premiums, copays, and even long-term care.

There are several categories of dual eligibility, ranging from Partial Duals (who get limited Medicaid help with Medicare premiums) to Full Duals, who receive comprehensive coverage from both programs.

Strategies for Maximizing Benefits

1. Enroll in a Dual Eligible Special Needs Plan (D-SNP)

D-SNPs are Medicare Advantage plans designed specifically for dual-eligible beneficiaries. These plans often include additional benefits like dental, vision, hearing, transportation, over-the-counter drug allowances, and care coordination. In 2025, many D-SNPs are enhancing mental health and home-based services to better serve aging and low-income populations.

When choosing a D-SNP:

• Check if your providers are in-network.

• Compare plan extras (transportation, telehealth, in-home support).

• Confirm drug coverage and formularies.

2. Apply for Medicare Savings Programs (MSPs)

MSPs help pay for Medicare premiums and, in some cases, deductibles and copayments. These include:

• Qualified Medicare Beneficiary (QMB): Covers Part A & B premiums, deductibles, coinsurance, and copayments.

• Specified Low-Income Medicare Beneficiary (SLMB): Covers Part B premiums.

• Qualifying Individual (QI): Also covers Part B premiums (first-come, first-served).

• Qualified Disabled & Working Individuals (QDWI): Helps certain working disabled individuals.

Eligibility is income- and asset-based, but many people qualify without realizing it. In 2025, asset limits have increased in many states due to inflation adjustments, so it’s worth checking again even if you were previously denied.

3. Leverage Extra Help for Prescription Drugs

Dual-eligibles automatically qualify for Extra Help (Low-Income Subsidy), which drastically reduces the cost of prescription drugs. In 2025, changes to Medicare Part D under the Inflation Reduction Act will eliminate the Part D catastrophic coverage copay for those with Extra Help—reducing annual out-of-pocket drug costs to near-zero.

4. Request a Medicaid Spend-Down (If Applicable)

In medically needy states, individuals with high medical expenses but slightly too much income for full Medicaid can qualify via a spend-down program. This means you deduct allowable medical costs from your income to “spend down” to the eligibility level.

This is useful for individuals who face high recurring expenses—like in-home care, medications, or durable medical equipment—that Medicare only partially covers.

5. Take Advantage of Long-Term Services and Supports (LTSS)

Medicaid covers many long-term care services Medicare does not, including:

• Nursing home care

• In-home caregiving

• Adult day health programs

• Home modifications for accessibility

If you or a loved one is aging in place or facing progressive illness, your state’s Medicaid waiver programs may cover critical services that reduce family burdens and improve quality of life.

6. Connect with a SHIP Counselor or Area Agency on Aging

Medicare and Medicaid are complex, and benefits vary by state. A State Health Insurance Assistance Program (SHIP) counselor can help you:

• Apply for MSPs and Extra Help

• Compare D-SNP plans

• Navigate Medicaid LTSS options

They offer free, unbiased help tailored to your personal situation.

👉 Find Your Local SHIP – SHIPHelp.org

Final Thought

Being dual-eligible isn’t just a label—it’s a powerful opportunity to reduce your healthcare costs and get more comprehensive coverage. But those benefits don’t always activate automatically. It takes knowledge, timely enrollment, and a willingness to ask the right questions.

By proactively using D-SNPs, applying for Medicare Savings Programs, leveraging Medicaid for long-term care, and using state-specific resources, dual-eligible individuals can stretch their benefits while protecting their health and independence.

Stay informed, stay covered—and don’t leave benefits on the table.