Important: We updated this article in July 2023 to make sure all info below is correct and current. When it comes to Medicare vs Medicaid, which plan covers people on disability benefits? After the SSA awards you benefits, you get access to two different medical insurance plans: Medicare, or Medicaid. While both offer medical coverage to people on disability assistance, they’re very different programs. Plus, the SSA may not automatically enroll you in either plan once your benefits begin. Here, we explain how Medicare vs Medicaid works if you’re on on Supplemental Security Income (SSI) or Social Security disability insurance (SSDI).
What’s the Difference Between Medicare vs Medicaid?
It’s easy to confuse the Medicare vs Medicaid programs because their names are so similar, although they’re really quite different. Each government program is designed to provide health coverage for elderly and poor Americans. And taxpayer dollars fund both programs — but when you compare Medicare vs Medicaid coverage, the similarities end there.
Medicare vs Medicaid: Which Healthcare Plan Covers SSI Recipients?
Getting Medicare vs Medicaid coverage depends on which federal government program provides your monthly payments. If you get SSI benefits, then the SSA automatically enrolls you in Medicaid unless you live in:
- New Hampshire
- North Dakota
- Northern Mariana Islands
If you reside in an automatic enrollment state, then there’s no waiting period for Medicaid coverage. However, people on SSI living in one of the places listed above must submit a separate Medicaid application.
Medicare vs Medicaid: How Medicaid Works
Medicaid is a joint federal and state insurance program that covers low income individuals and families based on need. That said, Medicaid coverage can vary significantly from state to state. That’s because the federal government covers up to 50% of each state’s Medicaid program costs. This means all remaining Medicaid program costs must be paid for at the state level.
Unlike Medicare, Medicaid isn’t available to everyone and it has very strict eligibility rules. To qualify for Medicaid coverage, you must either already get SSI benefits or fit within a mandatory eligibility group. If your income isn’t low enough to qualify for SSI, you may still qualify for Medicaid assistance programs run by your state. For more information about how to qualify for Medicaid under the Affordable Care Act (ACA), visit Medicaid.gov.
Each state’s Medicaid coverage varies (for example: some provide vision services, dental benefits and physical therapy). But the federal government requires Medicaid to cover all the following services — as long as they’re deemed “medically necessary”:
- Physician services
- Hospitalization (inpatient as well as outpatient services)
- Laboratory services
- Family planning
- Prenatal care
- Nursing facility services for those 21 or older
- Home health care nursing services for patients who qualify
- Pediatric and family medical services
- Midwife services
- Preventive care (includes screening, diagnosis, and treatment services) for children younger than 21 years old
Medicare vs Medicaid: Which Plan Covers People Getting SSDI Benefits?
If the SSA awards you SSDI benefits, you must wait two years in order to qualify for Medicare. When Congress expanded Medicare coverage in 1972, the law also put into place that SSDI two-year waiting period. For this reason, the Social Security Administration (SSA) isn’t likely to change that rule anytime soon. However, federal law lets the following people on SSDI skip the long wait for Medicaid coverage:
- Require regular dialysis or an organ transplant due to permanent kidney failure (also known as ESRD). People on SSDI qualify for Medicare coverage during the third month after beginning dialysis treatments.
- Have Lou Gehrig’s disease (also known as amyotrophic lateral sclerosis, or ALS).
While that two-year waiting period sounds like a long time, it begins on your original SSDI entitlement date. For most people, that means five months after the date when your health problems began. (Those five months cover the waiting period before you became eligible to apply for SSDI benefits.) But if your disability started long before you filed, then that time counts toward those required 24 months.
In addition, individuals with very low income and assets may qualify for Medicaid during the Medicare waiting period. Check Medicaid eligibility rules by state, or speak to a lawyer about local programs you may qualify for.
How Medicare Works
Medicare is an insurance program that you pay into through a 2.9% payroll tax (you and your employer each pay 1.45%). Medicare provides coverage for Americans with enough recent work history who:
- Turn 65 years old
- Become unable to work before they turn 65 (but only after the required waiting period), specifically because of poor health
Here’s how Medicare payments work: Essentially, your Social Security taxes go into a trust fund that grows throughout your working years. Money from that trust fund then pays all eligible bills incurred by people covered under the Medicare program. The program doesn’t have any income limits. However, your monthly Medicare costs are often automatically taken out of your SSDI checks. Some states help Medicare patients pay their annual deductibles, drug co-pays, and monthly premium costs. Learn more about getting extra help paying for your Medicare prescription drug costs.
What Do the Different Medicare Components Cover?
Medicare has three different parts, and not everyone has access to all of them without paying extra money:
- Hospital: Medicare Part A covers basic hospital care. It also pays for some hospice, nursing home, and home health care costs.
- Medical: Medicare Part B works like most private health insurance plans. It covers doctor appointments, lab work, and visits to the emergency room.
- Prescription drugs: Medicare Part D helps cover Rx medication costs. People with Medicare Part A and B coverage also qualify for Part D (or you can buy it as a plan all by itself). However, it
Talk to an Expert By Phone for Free About Your Options
Figuring out which plan will cover you can be hard — especially if you haven’t yet filed your claim. A local Social Security attorney can walk you through Medicare vs Medicaid coverage available in your state. It’s almost impossible to tell whether you qualify for healthcare assistance without talking to you first.
We can have a local expert call you to discuss your options. Click the button below to start your free online benefits quiz and see if you may qualify:
Lori Polemenakos is Director of Consumer Content and SEO strategist for LeadingResponse, a legal marketing company. An award-winning journalist, writer and editor based in Dallas, Texas, she's produced articles for major brands such as Match.com, Yahoo!, MSN, AOL, Xfinity, Mail.com, and edited several published books. Since 2016, she's published hundreds of articles about Social Security disability, workers' compensation, veterans' benefits, personal injury, mass tort, auto accident claims, bankruptcy, employment law and other related legal issues.