866-445-6683

Woman shrugging because she doesn't know differences in Medicare vs MedicaidMedicare vs Medicaid

I often get questions regarding Medicare vs Medicaid.  There is a lot of confusion around these two programs.

Let’s talk about Medicare first.

Medicare is a health insurance program that the federal government created and administers. When you pay Social Security taxes, you also pay into the program that supports Medicare insurance. You are eligible to receive Medicare once you reach age 65 or become disabled.

In original Medicare, a trust fund pays medical bills for those who are covered under the program. It serves people over 65 primarily, whatever their income; and serves younger disabled people and dialysis patients. Patients pay part of costs through premiums and deductibles for hospital along with other costs.  In order to limit their liability, most people choose to add additional coverage either through Medicare Supplement Insurance (Medigap) or Medicare Advantage Plans, which replaces original Medicare Parts A and B with “Part C”.

Medicare & Medicaid are two separate government-run programs that were created in 1965 in response to the inability of older and low-income Americans to buy private health insurance. These two programs were part of President Lyndon Johnson’s “Great Society” vision of a general social commitment to meeting individual health care needs. Medicare and Medicaid are social insurance programs that allow the financial burdens of illness to be shared among all, including healthy and sick individuals, and affluent and low-income families.

Original Medicare refers to the two parts of the program that are federally run, Medicare Part A and Part B. Part A covers inpatient hospital care, and Part B covers medical insurance like doctor visits, preventive services and screenings, and durable medical equipment.

Think of Medicare as a health insurance policy offered to seniors 65 and over, along with people under 65 with certain disabilities. Medicare Part A is an entitlement because its costs were deducted from your wages throughout your working years over 40 quarters. You’ll enroll in the program at age 65 or older to receive the benefits you already paid for.

On the other hand, Medicaid (Medi-Cal in California) is an assistance program (not an entitlement).

Medicaid generally serves low-income people of every age. Patients usually pay either a small copay or in some cases, no part of costs for covered medical expenses.

When comparing Medicare vs Medicaid it’s important to understand that Medicare Part A is an entitlement and Medicaid is not.

Darbie Lastra, a professional at Helping Hearts, LLC. says “There are many misconceptions about Medicaid. It is important to do your research and consult with a Medicaid professional.”

Medicaid is a federal-state cooperative program, which varies from state to state. It is run by state and local governments within federal guidelines. To see if you qualify for your state’s Medicaid (or Children’s Health Insurance) program, see: https://www.healthcare.gov/medicaid-chip/eligibility/

Medicare vs Medicaid coverage may intersect (for example, during an inpatient hospital stay or a visit to the doctor), but Medicaid coverage varies by state and potentially includes coverage beyond what Original Medicare offers.

For example, in California, most Medi-Cal plans (California’s version of Medicaid) covers dental.  But Medicare doesn’t.  So in this version of Medicare vs Medicaid you’d see additional benefits with Medicaid.

Another difference when comparing Medicare vs Medicaid is that if you live long enough, and paid into the system, you’ll eventually be eligible for Medicare.  That isn’t the case with Medicaid, which targets low income participants.

For more information on the differences between Medicare vs Medicaid, see the chart below.

And as always, feel free to contact us at 866-445-6683 if you have any questions.

 

Medicare 

Medicaid

Medicare: What is it?

A federal health insurance program for people who are:·        65 or older·        Under 65 with certain disabilities

·        Of any age and have End Stage Renal Disease (ESRD) or ALS

Medicaid: What is it?

A joint federal and state program that helps pay health care costs for certain people and families with limited income and resources. Different programs under the Medicaid umbrella are designed to help specific populations.

Medicare: Who governs it?

Federal government

Medicaid: Who governs it?

State governments

Medicare:  What does it cover?

Depends on the coverage you choose and may include:·        Care and services received as an inpatient in a hospital or skilled nursing facility (Part A)·        Doctor visits, care and services received as an outpatient, and some preventive care (Part B)

·        Prescription drugs (Part D)

Note: Medicare Advantage plans (Part C) combine Part A and Part B coverage, and often include drug coverage (Part D) as well – all in one plan.

Medicaid:  What does it cover?

Each state creates its own Medicaid programs, following federal guidelines. There are mandatory benefits and optional benefits. Mandatory benefits include, in part:·        Care and services received in a hospital or skilled nursing facility·        Care and services received in a federally-qualified health center, rural health clinic or freestanding birth center (licensed or recognized by your state)

·        Doctor, nurse midwife, and certified pediatric and family nurse practitioner services

·        And more

Medicare:  What does it cost?

It depends on the coverage you choose. Costs may include premiums, deductibles, copays and coinsurance.

Medicaid:  What does it cost?

It depends on your income and the rules in your state. Costs may include premiums, deductibles, copays and coinsurance. Certain groups are exempt from most out-of-pocket costs.

Medicare:  How do I get it?

Many people are enrolled in Parts A and B automatically when they turn 65. You can also contact your local Social Security office to see if you are eligible.

Medicaid:  How do I get it?

Eligibility depends on the rules in your state. Call your State Medical Assistance (Medicaid) office to see if you qualify.

References:
  • What is the difference between Medicare and Medicaid? – Medicare Interactive, Medicare Interactive Medicare answers at your fingertips, https://www.medicareinteractive.org/get-answers/introduction-to-medicare/explaining-medicare/what-is-the-difference-between-medicare-and-medicaid
  • Medicaid Vs. Medicare | Investopedia, Medicaid Vs. Medicare, https://www.investopedia.com/articles/personal-finance/081114/medicaid-vs-medicare.asp, Tim Parker
Facebooktwittergoogle_plusredditpinterestlinkedinmailby feather