Dual Eligibles: How Medicaid and Part D Work Together

If you qualify for both Medicare and Medicaid, you may wonder which program pays for your prescriptions. The short answer is that Medicare Part D is your main prescription drug coverage, while Medicaid covers many other health services and, depending on your state, some drugs that Part D does not cover. A program called Extra Help ties the two together by lowering what you pay under Part D.

What "dual eligible" means

A dual eligible person is someone enrolled in both Medicare and Medicaid. Medicaid eligibility rules vary by state, so the exact benefits and income limits differ depending on where you live. Some people have full Medicaid benefits, while others receive help with Medicare premiums and cost sharing through a Medicare Savings Program. Either way, having Medicaid or a Medicare Savings Program generally means you automatically qualify for Extra Help — you do not need to apply for it separately.

If you are not sure which category you fall into, your state Medicaid agency or a free State Health Insurance Assistance Program (SHIP) counselor can explain it. This article is general information only, not advice about your specific situation.

Part D pays first for covered prescriptions

When you fill a prescription for a drug covered by your Part D plan, the plan pays its share first, even if you also have Medicaid. Medicaid is not a backup that pays whatever Part D leaves behind for covered drugs. Instead, Extra Help is what reduces your Part D premium, deductible, and copays.

That distinction matters at the pharmacy counter. If a drug is not on your plan's formulary, or it requires prior authorization, Medicaid generally will not simply step in and pay for it. You or your prescriber may need to request a formulary exception or switch to a covered alternative. Some drugs Part D excludes by law may be covered by Medicaid in some states, but the rules depend on your state's program.

What Extra Help does for you

Extra Help, also called the Low-Income Subsidy, is a federal subsidy that works alongside your Part D plan. For people who qualify automatically through Medicaid, it can:

• Pay your Part D premium, up to the benchmark amount for your region. If you choose a plan whose premium is above the benchmark, you may owe the difference.
• Eliminate your annual Part D deductible. In 2026, the standard deductible can be up to $615, but Extra Help removes it for qualifying beneficiaries.
• Replace percentage-based coinsurance with small, fixed copays.
• Remove the Part D late enrollment penalty while you receive Extra Help.

In 2026, maximum copays for many dual eligible beneficiaries are $1.60 for a generic and $4.90 for a brand-name drug at or below 100% of the federal poverty level, or $5.10 and $12.65 between 100% and 150%. Institutionalized people with full Medicaid benefits generally pay $0. Check the notice Medicare sends you for your exact category.

Once total out-of-pocket drug spending reaches $2,100 in 2026, covered Part D drugs cost $0 for the rest of the year. Amounts paid through Extra Help count toward that cap, so your personal spending may stay far below $2,100.

What if you do not choose a plan?

If you have full Medicaid benefits and do not enroll in a Part D plan, Medicare will generally enroll you automatically in a benchmark plan in your region — one whose premium Extra Help covers in full. You will not go without drug coverage, but the assigned plan may not cover all of your medications at the lowest cost.

Choosing your own plan is usually better. Compare plans during the Annual Enrollment Period, October 15 through December 7, checking that your prescriptions are on the formulary and your pharmacy is in network. Dual eligible beneficiaries can also generally switch plans once per quarter during January through September.

What Medicaid still covers

Medicaid continues to cover many services Medicare does not, such as long-term care, dental, vision, and transportation in some states, subject to state rules. Think of the two programs as complementary: Part D handles covered outpatient prescriptions, and Medicaid fills other gaps in your care.

If you are charged more than you expect, ask your pharmacist whether the claim was processed through Part D with Extra Help applied.

If your Medicaid status changes

Medicaid eligibility is redetermined regularly, and losing Medicaid also means losing automatic Extra Help qualification. If that happens, your Part D premium, deductible, and copays could rise, so do not ignore notices about your status.

You generally get a special enrollment period lasting three full months from the date you lost eligibility or were notified, whichever is later. Use it to review your plan, check whether you qualify for Extra Help by applying through Social Security, and consider whether the Medicare Prescription Payment Plan — which spreads out-of-pocket costs into monthly payments — would help. If your income or resources change again, you can reapply for Extra Help at any time.

Bottom line: For dual eligible beneficiaries, Part D covers prescriptions, Extra Help automatically lowers the cost, and Medicaid covers other health needs — so the smartest move is to choose a benchmark plan that covers your drugs and to act quickly if your Medicaid status changes.