Medigap and Medicare Supplements on Medicaid

Many older adults pay for a Medigap (Medicare Supplement) policy to cover Medicare’s deductibles and coinsurance. When they qualify for Long-Term Care Medicaid, a common question is whether to keep paying for it. In many cases, full Medicaid coverage makes a Medigap policy largely unnecessary, but dropping it can have consequences if Medicaid ends later. Federal law gives Medicaid recipients a special right to suspend a Medigap policy for up to 24 months. This guide explains how Medigap and Medicaid interact and the choices families face.

Figures change periodically. Double-check current amounts before relying on them.

The short version

Medigap policies pay some or all of Medicare’s out-of-pocket costs. Full Medicaid usually also pays those costs for people who qualify, through the state’s coordination of benefits and Medicare Savings Programs.
Federal law generally prohibits insurers from selling a new Medigap policy to someone they know has full Medicaid, because it would duplicate coverage.
A person who already has a Medigap policy and becomes eligible for Medicaid can ask the insurer to suspend benefits and premiums for up to 24 months, if they ask within 90 days of becoming entitled to Medicaid (Social Security Act section 1882(q)(5)).
If Medicaid ends during the suspension, the policy is reinstated on terms at least as favorable as before, if the person notifies the insurer within 90 days.
On Long-Term Care Medicaid, Medigap premiums the person continues to pay can often be deducted from income when figuring the patient liability.

How Medicare, Medigap and Medicaid fit together

Medicare is the primary insurance for most people 65 and older. It has deductibles and coinsurance; in 2026 the Part A hospital deductible is $1,736 per benefit period and the Part B deductible is $283, with 20 percent coinsurance for most Part B services.
Medigap is private insurance that pays some or all of those costs, depending on the plan letter.
Medicaid pays for long-term care and, for people with full Medicaid, also pays Medicare cost sharing in most cases, up to the state’s payment limits.

For people with both Medicare and full Medicaid (full-benefit dual eligibles), the state usually pays the Medicare Part B premium ($202.90 a month in 2026), and providers who accept Medicare generally cannot bill people in the Qualified Medicare Beneficiary (QMB) program for Medicare cost sharing.

Medicare Savings Programs

Medicaid runs Medicare Savings Programs that help pay Medicare costs for people with limited income and assets:

Qualified Medicare Beneficiary (QMB): pays Part A and Part B premiums, deductibles, coinsurance and copayments.
Specified Low-Income Medicare Beneficiary (SLMB): pays the Part B premium.
Qualifying Individual (QI): pays the Part B premium.
Qualified Disabled and Working Individuals (QDWI): pays the Part A premium for certain people with disabilities who work.

People who qualify for Long-Term Care Medicaid often qualify for one of these programs too.

The ban on selling duplicate policies

Federal law (Social Security Act section 1882(d)(3)) makes it illegal, with some exceptions, to sell a Medigap policy to a person who has full Medicaid when the seller knows it would duplicate benefits. Exceptions include situations where Medicaid pays the Medigap premium, or where the person has only limited Medicaid help, such as SLMB or QI. This protects Medicaid recipients from paying for coverage they do not need.

The right to suspend a Medigap policy

How suspension works

Under section 1882(q)(5)(A) of the Social Security Act:

a policyholder who becomes entitled to Medicaid can ask the insurer to suspend benefits and premiums;
the request must reach the insurer within 90 days after the person becomes entitled to Medicaid (CMS interprets this as 90 days after the eligibility determination, since eligibility is often retroactive);
the suspension can last up to 24 months from the request;
if the person loses Medicaid during the suspension, the policy is automatically reinstated, effective as of the date Medicaid ended, if the person notifies the insurer within 90 days and resumes paying premiums;
the reinstated coverage must be on terms at least as favorable as before, without new medical underwriting.

Why it matters

If a person simply drops a Medigap policy and later loses Medicaid, for example after an inheritance or a move to another state, they may face medical underwriting when trying to buy a new policy and could be denied or charged more. Suspension preserves the right to get the policy back for up to two years.

After 24 months

If the suspension period ends while the person is still on Medicaid, they generally must decide whether to resume paying premiums or let the policy lapse. A person who lets it lapse and later loses Medicaid may face underwriting.

Keeping a Medigap policy on Medicaid

Some people choose to keep paying for a Medigap policy while on Long-Term Care Medicaid, for example because they expect to leave Medicaid, or because their providers do not accept Medicaid. In many states, the premium can be deducted from income when figuring the patient liability, so the cost partly comes out of what would otherwise go to the nursing home. Ask the caseworker how the state treats Medigap premiums.

Medicare Advantage and Dual Special Needs Plans

Instead of Original Medicare plus Medigap, many dual eligibles enroll in a Dual Eligible Special Needs Plan (D-SNP), a Medicare Advantage plan designed for people with both Medicare and Medicaid. Some D-SNPs are integrated with the state’s Long-Term Care Medicaid program. A person cannot use a Medigap policy with a Medicare Advantage plan.

Prescription drugs

People with full Medicaid and Medicare automatically qualify for Extra Help (the Part D Low-Income Subsidy), which lowers Part D premiums and copayments. Medigap policies sold today do not include drug coverage.

A simple example

Ruth, 84, has Original Medicare and a Medigap Plan G costing $230 a month. She enters a nursing home and is approved for Long-Term Care Medicaid in March. Her daughter learns about the suspension right and, in April, writes to the insurer asking to suspend the policy under section 1882(q)(5). The insurer suspends benefits and premiums. Medicaid and the state’s QMB coverage now pay Ruth’s Medicare cost sharing. If Ruth were to lose Medicaid within 24 months, her daughter could ask to reinstate the policy without new underwriting.

Questions to ask

Is the person eligible for full Medicaid, a Medicare Savings Program, or both?
Do the person’s doctors accept Medicaid as well as Medicare?
Is there a chance the person will leave Medicaid in the next two years?
How does the state treat Medigap premiums in the patient liability?
Would a D-SNP be a better fit?

Getting help

The State Health Insurance Assistance Program (SHIP), a free federally funded counseling service available in every state, can help with Medicare and Medigap questions. A Certified Medicaid Planner can explain how insurance premiums affect Medicaid eligibility and the patient liability.

Frequently asked questions

Do I have to cancel my Medigap policy when I get Medicaid? No, but you may not need it. Consider suspending it instead of cancelling.

How do I suspend my policy? Write to the insurer within 90 days of the Medicaid eligibility determination and ask to suspend under federal law. Keep a copy.

Can an insurer refuse to suspend? Insurers must comply with the suspension rules. If an insurer refuses, the state insurance department handles complaints about Medigap suspensions.

Will Medicaid pay my Medigap premium? Usually not, though some states may in limited cases.

Key terms

Medigap (Medicare Supplement): private insurance that pays some of Original Medicare’s out-of-pocket costs.
Full-benefit dual eligible: a person with Medicare and full Medicaid coverage.
Medicare Savings Program: a Medicaid program that pays some Medicare costs, such as premiums.
Suspension: a pause in Medigap benefits and premiums for up to 24 months while a person is on Medicaid.
Reinstatement: restoring a suspended Medigap policy when Medicaid ends.
D-SNP: a Medicare Advantage plan for people with both Medicare and Medicaid.

A sample suspension request

A short letter is enough. It might say: “I am writing to request suspension of benefits and premiums under my Medicare supplement policy number [number], under section 1882(q)(5) of the Social Security Act, because I have been determined eligible for Medicaid. A copy of my Medicaid eligibility notice is enclosed.” Send it by a method that shows delivery, and keep a copy with the eligibility notice.

Common mistakes

Cancelling a Medigap policy instead of suspending it.
Missing the 90-day window to request suspension.
Forgetting to request reinstatement within 90 days if Medicaid ends.
Buying a new Medigap policy after qualifying for full Medicaid.
Not telling the caseworker about premiums that could be deducted from income.

If you are unsure whether you have full Medicaid or only a Medicare Savings Program, check your eligibility notice or ask the caseworker before making any change to a Medigap policy.

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.