At a glance:
- Medicare is a federally operated program, only.
- Medicaid is a state and federal program.
Medicare is an insurance program.
Medicaid is an assistance program.
- Medicare is designed to help cover health care costs of any 65+, disabled, or on dialysis, regardless of income.
- Medicaid is income based, and designed to help low income individuals, regardless of age.
- Medicare and Medicaid are U.S. government sponsored health insurance programs, designed to assist health care costs of elderly, disabled, and low-income American citizens. These programs were established in 1965 and funded by taxpayers.
- Medicare has 4 Parts: Part A, Part B, Part C, and Part D.
- Medicaid does not have 4 parts.
Medicare is a federal program that provides health coverage if you are 65+, under 65 with a disability, or a dialysis patient. Eligibility for Medicare is not dependent on income. Medical bills are paid from trust funds which those covered have paid into. Patients pay part of the costs through deductibles for hospitals and other costs. Small monthly premiums are required for non-hospital coverage. It is run by the Centers for Medicare and Medicaid Services.
Medicare has four parts:
Part A (hospitalization)
Part B (medically necessary services)
Part C (supplemental coverage)
Part D (prescription drugs).
- Medicare Part A provides hospitalization coverage to individuals 65 years or older, regardless of income. You or your spouse must have worked and paid Medicare taxes for at least 10 years to qualify. Most people don’t pay a premium for Part A, but deductibles and coinsurance apply.
- Medicare Part B (Medical insurance). Those eligible for Medicare Part A also qualify for Part B, which covers medically necessary services and equipment. This includes doctors’ office visits, lab work, x-rays, wheelchairs, walkers, outpatient services, and preventative services like disease screenings and flu shots. For 2022, the standard Part B premium is 170.10 (generally deducted from Social Security or Railroad Retirement payments). Deductibles and coinsurance apply. Individuals who earn more than 91,000 annually are obligated to pay more for this program.Individuals are not mandated to sign up for Part B as soon as they are eligible if their employers insurance still covers them. It may cost more to join later in life due to a late-enrollment penalty.
- Part C (Medicare Advantage): Individuals eligible for Medicare Part A and Medicare Part B are eligible for Medicare Part C also known as Medicare Advantage. Medicare Part C plans are offered by private companies approved by Medicare. In addition to providing coverage offered by Parts A and B, most Part C plans offer vision, hearing, and dental coverage. Some Part C plans provide prescription drug coverage. In that way, it functions like the health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Medicare Advantage can be beneficial, but can have a higher rate of out of pocket costs due to coinsurance, deductibles, and copays. Medicare Supplemental Insurance (Medigap) can be purchased to help cover expenses such as copayments, coinsurance, and deductibles that are not covered by Part A and Part B. Physicians who do not take Medicare do not accept Medigap.
- Part D (Prescription Drug Coverage). Participants pay for Part D plans out-of- pocket and must pay monthly premiums, a yearly deductible and copayments for certain prescriptions. Those enrolled in Medicare Part C will want to consider Part D if their plan has no prescription drug coverage. Annual Medicare enrollment period runs from October 15- December 7th.
Medicaid is a joint federal and state program that helps low-income Americans of all ages pay for the costs associated with medical and long-term custodial care. Medicaid is used to fund long-term care, which is not covered by Medicare or most private insurance policies. Medicaid is the primary payer of long term care across the nation and covers the cost of nursing facilities for those who have no means to pay for nursing care.
Medicaid is run by state and local governments within federal guidelines. The federal and state partnership results in different Medicaid programs for each state. Medicaid has strict eligibility requirements that vary by state. Patients usually pay no part of costs for covered medical expenses and a small co-pay is sometimes required.
Not everyone qualifies for Medicaid. If your income falls below the poverty line, you may be eligible. There are a number of mandatory eligibility groups including, some pregnant women and children and individuals receiving supplemental security income. Children who need low-cost care but whose families earn too much to qualify for Medicaid are covered through the Children’s Health insurance Program (Chip).
Medicaid benefits vary by state, but the Federal government mandates coverage for the following services:
- Inpatient hospital services
- Outpatient hospital services
- EPSDT: Early and Periodic Screening, Diagnostic, and Treatment Services
- Nursing facility services
- Home health services
- Physician services
- Rural health clinic services
- Federally qualified health center services
- Laboratory and X-ray services
- Family planning services
- Nurse midwife services
- Certified pediatric and family Nurse Practitioner services
- Freestanding birth center services (when licensed or recognized by the state)
- Transportation to medical care
- Tobacco cessation counseling for women
Each state has the option of including additional benefits, such as prescription drug coverage, optometrist services, eyeglasses, medical transportation, physical therapy, prosthetic devices, dental services, and more.
The Affordable Care Act
The Affordable Care Act (ACA) was signed into law in 2010 by President Barack Obama. Under ACA, all legal residents and citizens of the United States with incomes 138% below the poverty line qualify for coverage in Medicaid participating states.The US Supreme Court ruled that states are not required to participate in the expansion to continue receiving already established levels of Medicaid funding. Many states have chosen not to expand funding levels and eligibility requirements.Those covered by Medicaid pay nothing for covered services.
The CARES Act
The CARES Act expanded coverage and was signed into law by President Trump in 2020. This stimulus package expands to cover Americans impacted by Covid 19. It increases healthcare flexibility like covering more tele-health services. The CARES Act allows Medicaid programs in non-expansion states to Cover uninsured individuals’ Covid needs.
Dual eligibility means you can have both. Both will work together to provide health coverage to lower costs. When a Medicaid recipient reaches age 65, they remain eligible for Medicaid and are also eligible for Medicare. Medicaid coverage may change based on the recipient’s income. Higher income individuals may find that Medicaid pays their Medicare Part B premiums. Lower income individuals may continue to receive full benefits.
- Co-insurance- Type of insurance where the insured pays a portion of the payment against a claim.
- Deductible- The amount you pay for out-of-pocket costs for your covered health care before you plan begins to play.
- Premium- The amount you pay for an insurance policy.