Understanding
your coverage.

Most people become eligible for Medicare at age 65 if they or their spouse paid Medicare taxes for at least 10 years (40 quarters) while working. You can also qualify under 65 if you have received Social Security Disability Insurance (SSDI) for 24 months, or if you have ALS or end-stage renal disease requiring dialysis or transplant.

Eligibility does not mean automatic enrollment. Unless you are already receiving Social Security benefits, you must actively sign up during your enrollment window — and missing it has permanent financial consequences.

Medicare pays for services and supplies that are medically necessary — meaning they are needed to diagnose or treat a medical condition, meet accepted standards of care, and are not primarily for the patient's convenience. That determination is made by Medicare, not by your doctor alone.

A doctor can order something and genuinely believe it is necessary. Medicare can still decide it does not meet their coverage criteria and decline to pay. Documentation of medical necessity in the physician's chart note is what Medicare reviews — which is why specific, functional language in that documentation matters so much.

Original Medicare is the traditional federal program — Parts A and B administered directly by the government. You can see any doctor or hospital that accepts Medicare anywhere in the country. No network. No prior authorization for most services. You pay the government-set cost-sharing amounts.

Medicare Advantage (Part C) is an alternative delivered by a private insurer that contracts with Medicare. Plans often have lower premiums but operate like private insurance — narrower networks, prior authorization for many services, and an annual out-of-pocket maximum. Lower monthly cost in exchange for less flexibility and more administrative process.

The decision that matters most: choosing between Original Medicare with a Medigap supplement and Medicare Advantage. Once you are in a Medicare Advantage plan and want to switch back, a Medigap insurer can medically underwrite you — meaning they can charge more or decline you based on your health. The open enrollment protection you have at 65 does not repeat.

Your Initial Enrollment Period (IEP) runs for 7 months — beginning 3 months before the month you turn 65, including your birthday month, and ending 3 months after. This is the window to enroll in Parts A, B, and D without penalty and select a Medigap supplement without medical underwriting.

Miss this window and enroll late in Part B: you pay a 10% premium surcharge for every 12-month period you were eligible but did not enroll — permanently. Part D carries its own late enrollment penalty: 1% of the national base premium per month delayed, also permanent.

Exception: if you have qualifying employer-sponsored coverage at 65, you can delay enrollment without penalty. When that coverage ends, you have a Special Enrollment Period. Keep documentation of your continuous coverage.

Medicaid eligibility is based on income and in some cases assets. Unlike Medicare, there is no age requirement. Adults under 65 may qualify if their income falls below 138% of the federal poverty level in states that have expanded Medicaid under the ACA. Seniors and people with disabilities may qualify through different pathways — often with lower income thresholds and asset limits.

Unlike Medicare, Medicaid has continuous open enrollment — there is no limited enrollment window and no late penalty. You can apply at any time. Eligibility is re-determined annually.

Each state administers its own Medicaid program under federal guidelines. Benefits, managed care requirements, and provider networks vary significantly by state. Select your state above to see what your state's program covers.

Most states contract with private Managed Care Organizations (MCOs) to deliver Medicaid benefits. Your MCO — not the state directly — is the insurer you interact with for prior authorizations, referrals, and billing. The MCO must cover the services your state's Medicaid plan requires, but may have its own network and administrative processes on top of that.

This matters because complaints, appeals, and prior authorization requests go to your MCO first, then to the state if unresolved. Understanding which organization is responsible for which decision saves significant time when something goes wrong.

About 12 million Americans are eligible for both Medicare and Medicaid — called "dual eligibles." For most services, Medicare pays first as the primary insurer, then Medicaid pays second to cover the remaining cost-sharing. For many dual eligibles, this means near-zero out-of-pocket costs for Medicare-covered services.

Dual eligible individuals may also qualify for Medicare Savings Programs — state programs that pay your Medicare Part B premium, deductibles, and coinsurance. These programs are significantly underutilized; millions of people who qualify are not enrolled. A SHIP counselor or your state Medicaid agency can determine whether you qualify.

D-SNPs (Dual Eligible Special Needs Plans) are Medicare Advantage plans specifically designed for dual eligibles. They coordinate Medicare and Medicaid benefits through a single plan, often with additional benefits and care coordination support. Not available in all areas.

Part A covers inpatient hospital care — but only when you are formally admitted as an inpatient. If you are placed under observation status instead, you are technically an outpatient even if you spend days in a hospital bed. Observation days do not count toward the 3-day qualifying inpatient stay required for Medicare to cover a skilled nursing facility stay. This distinction is invisible to most patients and has significant financial consequences.

Part A covers skilled nursing facility (SNF) stays — but only after a qualifying 3-day inpatient hospital stay, and only for skilled care. Days 1–20 are fully covered. Days 21–100 carry a daily coinsurance (~$209/day in 2025) that Medigap Plan G covers. After day 100, Medicare coverage ends entirely.

Part A covers hospice with no time limit as long as eligibility continues, and some home health — though most home health is billed under Part B.

Part B covers physician visits, outpatient procedures, durable medical equipment, lab work, preventive services, and most home health. After the annual deductible (~$257), Medicare pays 80% of the approved amount. You pay 20% — with no annual out-of-pocket cap.

A $30,000 piece of equipment means a $6,000 bill. A complex surgery with multiple physician billings can produce tens of thousands in 20% shares. This uncapped exposure is why Medigap supplements exist — and why Plan G, which covers that 20%, is so widely used.

Preventive services are fully covered at 100% with no cost-sharing when billed correctly. Annual wellness visits, mammograms, colonoscopies, flu vaccines, and diabetes screenings are all 100% covered as preventive. If you raise a specific health complaint during a preventive visit, billing can shift to a problem-focused visit and cost-sharing applies.

Part D prescription coverage is delivered through private plans, each with its own formulary — a list of covered drugs organized into cost tiers. Tier 1 is typically generic drugs with low copays. Tier 5 is typically specialty drugs with high cost-sharing. The same drug can be on different tiers — or not covered at all — depending on which plan you choose.

Plans change their formularies every year. A drug that was tier 2 this year may be tier 4 next year. Review your Part D plan every fall during open enrollment (October 15 through December 7) using Medicare's Plan Finder at medicare.gov.

In 2025, a significant change took effect: the annual out-of-pocket cap for Part D drugs is $2,000. Once you have spent $2,000 on covered drugs in a calendar year, you pay nothing for the rest of the year. This dramatically reduces catastrophic drug costs for people on expensive specialty medications.

Original Medicare covers 80% of most outpatient services after the Part B deductible — you owe the remaining 20% with no cap. A Medigap supplement is a private insurance policy that covers some or all of that remaining cost-sharing.

Plan G is the most comprehensive option currently available to new enrollees. It covers the Part A deductible, the Part B 20% coinsurance, skilled nursing facility coinsurance for days 21–100, and foreign travel emergency care. With Plan G, most Medicare-covered services cost you nothing out of pocket beyond the Plan G premium.

Medigap plans are standardized — a Plan G from one company covers exactly the same things as a Plan G from another. The only variable is the monthly premium. Shop on premium, not on the plan letter.

Prior authorization (PA) — also called pre-authorization or pre-approval — is a requirement from your insurance plan that certain services, medications, or equipment be reviewed and approved before they are provided. The insurer reviews whether the requested service meets their coverage criteria based on the clinical documentation submitted.

Under Original Medicare: Prior authorization is required for some services — most notably complex durable medical equipment including power wheelchairs, and some outpatient procedures. Most routine services do not require it.

Under Medicare Advantage: Prior authorization is significantly more common — most plans require it for specialist referrals, hospitalizations, certain imaging, many procedures, and most complex equipment. Requirements vary by plan.

Under Medicaid: Prior authorization requirements are set by your state Medicaid agency or managed care organization. They vary significantly by state and by service category. Your MCO's member handbook lists what requires PA.

The supplier (for equipment) or physician's office (for procedures) submits the prior authorization — not the patient. The patient's role is to know it is happening and confirm it has been submitted.

Medicare: Equipment prior authorizations go to the DME Medicare Administrative Contractor (DME MAC) for the patient's region. Procedure prior authorizations under Medicare Advantage go to the plan's utilization management team.

Medicaid: Prior authorizations go to your state Medicaid agency or, in managed care states, to your MCO's utilization management team. The process and timelines differ from Medicare's DME MAC process.

Where patients get into trouble: assuming that because the doctor ordered something, it is automatically approved. The order and the authorization are two separate steps.

Under Medicare, Medicaid, and Medicare Advantage, prior authorizations generally require documentation that establishes:

• The diagnosis — the condition driving the need
• Functional limitations — specifically what the patient cannot do. "Has MS" is not sufficient. "Has MS with bilateral lower extremity weakness resulting in inability to walk more than 15 feet without falling" meets the standard
• Why the requested service is appropriate — and why lesser alternatives are insufficient
• Supporting clinical records — office notes, evaluations, and test results

The most common reason prior authorizations are delayed or denied is not that the patient does not need the service — it is that the documentation does not specifically establish the need in the language the insurer's coverage criteria require. This is true under Medicare, Medicaid, and Medicare Advantage alike.

Denials across all plan types fall into the same categories:

• Documentation insufficient — the clinical record does not establish medical necessity in the language the insurer's criteria require. Most common reason, most fixable.
• Service not covered — the service is not a covered benefit under your plan. Structural — the appeals process will not change this outcome.
• Coverage criteria not met — the patient does not meet the specific eligibility criteria for the service.
• Billing errors — incorrect codes or missing information in how the claim was submitted.
• Not medically necessary — the reviewer determined the service does not meet the medical necessity standard based on the documentation provided.

The denial notice must include the specific reason and information about how to appeal. Read the reason code — it tells you exactly what went wrong and what needs to be addressed.

Under Medicare: you have the legal right to appeal. The denial notice must include your appeal rights and deadlines. General deadlines: 120 days to file a redetermination (Level 1), 180 days for subsequent levels. You also have the right to request your complete case file — reviewing it reveals exactly what the reviewer focused on.

Under Medicare Advantage: the plan must provide a written denial with reasons and appeal rights. If urgent, you can request an expedited appeal — decision required within 72 hours. If the plan upholds its denial, an independent review organization reviews the case at no cost to you.

Under Medicaid: you have the right to a state fair hearing — an administrative hearing before an impartial hearing officer. Request a fair hearing within the timeframe stated on your denial notice (typically 90 days). You can also request continuation of benefits while your appeal is pending — this is important for ongoing services.

Medicaid eligibility is based primarily on income — and in some cases assets. The main eligibility pathways are:

• Adults under 65 in expansion states — income at or below 138% of the federal poverty level. As of 2025, 41 states have expanded Medicaid under the ACA.
• Seniors (65+) — income thresholds vary by state. Many seniors become income-eligible after retirement. Asset limits apply in most states for long-term care Medicaid.
• People with disabilities — those receiving SSI are typically automatically enrolled. Others may qualify through disability-based pathways.
• Pregnant individuals — typically higher income thresholds apply.

Unlike Medicare, Medicaid has continuous open enrollment — no annual window, no late penalty. Apply any time at your state Medicaid agency, through healthcare.gov, or with help from a SHIP counselor or benefits enrollment specialist. Eligibility is re-determined annually.

Most states contract with private Managed Care Organizations (MCOs) to deliver Medicaid benefits rather than paying providers directly. If you have Medicaid managed care, your MCO — not the state Medicaid agency — is the organization you interact with for day-to-day coverage questions, prior authorizations, referrals, and billing.

Your MCO must cover every service your state's Medicaid plan requires. But the MCO sets its own provider network, prior authorization processes, and member services. This means two people with Medicaid in the same state may have different experiences depending on which MCO they're enrolled in.

Key things to know: your MCO's member handbook lists what services require prior authorization. Your MCO's member services line handles billing disputes and coverage questions first. If your MCO cannot resolve something, you can escalate to your state Medicaid agency.

Federal law requires all state Medicaid programs to cover certain mandatory benefits — including inpatient and outpatient hospital care, physician services, lab and x-ray, home health, and family planning. Beyond those mandates, states choose which optional benefits to include.

Optional benefits with significant state variation include:

• Dental care — covered in most states for adults, but the scope varies widely from comprehensive to emergency-only
• Hearing aids — covered in roughly half of states for adults
• Vision and eyeglasses — covered in most states with varying limits
• Prescription drugs — covered in all states, with formularies that vary by state and MCO
• Personal care and custodial services — available in most states, often through HCBS waiver programs
• Non-emergency medical transportation — covered in all states as a mandatory benefit

Select your state above to see what your state's program covers specifically.

HCBS (Home and Community-Based Services) waivers allow states to cover long-term care services at home or in community settings rather than in nursing facilities. These are the programs that pay for personal care aides, homemaker services, adult day programs, home modifications, and other supports that allow people to remain in their homes.

HCBS waivers are a critical Medicaid benefit because they cover the custodial care gap that Medicare leaves entirely unfilled. If you or a family member needs ongoing help with bathing, dressing, meals, or daily activities — and Medicare coverage has ended or doesn't apply — an HCBS waiver program may be the primary path to funded care at home.

Important caveats: HCBS waiver programs typically have waiting lists, which in some states can be months or years long. Eligibility often requires meeting a nursing facility level of care. The types of services covered and the amount of hours per week vary by state and by specific waiver program. Apply as early as possible — the waiting list clock starts at application, not at need.

Medicaid covers nursing home care for income- and asset-eligible individuals — but the asset eligibility rules are strict. Most states require individuals to spend down their assets to a very low threshold (typically $2,000 for a single person) before Medicaid begins covering nursing home costs.

This is what "Medicaid spend-down" means in practice: a person with significant savings pays for nursing home care out of pocket until their assets fall below the threshold, at which point Medicaid covers the ongoing cost. The average nursing home costs $8,000–$10,000 per month — assets can deplete rapidly.

There are legal protections for spouses — the community spouse resource allowance protects a portion of assets for a spouse still living at home. Asset transfer rules also apply: gifts or transfers of assets within a lookback period (typically 5 years for nursing home Medicaid) can trigger a penalty period of ineligibility.

The rules here are complex and state-specific. An elder law attorney can help structure assets legally before a nursing home need becomes urgent. Planning years in advance produces significantly better outcomes than planning in crisis.

Medicare Savings Programs (MSPs) are state Medicaid programs that help pay Medicare premiums, deductibles, and cost-sharing for low-income Medicare enrollees. There are four levels:

• Qualified Medicare Beneficiary (QMB) — pays Part A and B premiums, deductibles, and coinsurance. The most comprehensive level.
• Specified Low-Income Medicare Beneficiary (SLMB) — pays Part B premium only.
• Qualifying Individual (QI) — pays Part B premium only, with limited slots.
• Qualified Disabled and Working Individual (QDWI) — pays Part A premium for certain working disabled individuals.

These programs are significantly underutilized — estimates suggest over 3 million Medicare enrollees who qualify are not enrolled. Enrollment in a Medicare Savings Program also automatically qualifies you for the Part D Low Income Subsidy (Extra Help), which dramatically reduces prescription drug costs.

To apply, contact your state Medicaid agency directly. A SHIP counselor can help determine which program you qualify for and assist with the application at no cost.

For dual eligible individuals, Medicare is the primary payer for Medicare-covered services. After Medicare pays its share, the claim goes to Medicaid, which covers most or all of the remaining cost-sharing. For most dual eligibles, this coordination means near-zero out-of-pocket costs on Medicare-covered services.

The coordination also works for services Medicare doesn't cover. If you need a dental procedure, hearing aids, or custodial care at home, Medicaid may cover those independently — Medicare's exclusions don't limit what Medicaid can cover.

Providers must accept the Medicare-Medicaid combined payment as payment in full. A provider who accepts Medicare cannot bill a dual eligible patient for Medicare cost-sharing — it must go to Medicaid. If a provider bills you for cost-sharing on a Medicare-covered service when you have Medicaid, you can dispute that bill.