If you’re looking for health insurance outside of the private market, you’ve probably heard of both Medicaid and Medicare. These are both government programs and it’s easy to get them confused. Public health insurance, such as Medicare and Medicaid, covers 34.4% of the American population. If you aren’t covered by private insurance from an employer or the health insurance marketplace, you might wonder if you qualify. What is the difference between Medicare and Medicaid? Here’s what you need to know.
Medicare: A Federal Program For Older and Disabled Americans
Medicare is a federal program created in 1965 that is designed to provide health insurance for older Americans during retirement. In addition, Medicare plans offer health coverage for those who are permanently disabled.
Eligibility
Generally, your age is what makes you eligible for Medicare benefits. If you are a citizen or permanent resident of the United States and 65 years of age or older, you’ll qualify.
If you have specific disabilities or end-stage kidney disease, you may also qualify. Medicare benefits may also be applied to someone on Social Security disability who is widowed and over 50, or a child of a person who worked a minimum amount of time for the government.
Benefits and Costs
The exact costs you’ll pay depends on how long you paid Medicare taxes. The basic level of coverage has two parts, Part A and Part B.
Part A is free for most Americans and covers hospitalization. It also includes skilled nursing care, hospice service, and home healthcare. Part B has a monthly premium and covers visits to the doctor, preventative care, and outpatient services.
Parts A and B together are called Original Medicare, but many seniors choose additional coverage options.
One of the biggest differences between Medicare vs Medicaid is that Medicare is a federal program, so the benefits and costs will not change no matter where you live. Your Medicare will help you in Florida the same way it does in Colorado.
Additional Medicare Coverage
If you want Medicare to help you pay for things like prescription drugs, vision, dental, or other services, you’ll need to choose extra coverage.
Medicare Part C is called Medicare Advantage. This program, run through private insurers, can help you manage the costs of Medicare deductibles and offer you additional benefits that Original Medicare doesn’t cover.
Medicare Advantage is an all-in-one coverage plan, and the costs and benefits will vary depending on the insurer. Some plans are available without any additional monthly premium, while others will add to your monthly costs.
Make sure you understand the out-of-pocket costs with your specific plan. While many options allow you to save money compared to Original Medicare deductibles, some people will find it more expensive if they need a lot of medical care. This article on Healthstatus.com gives more information.
Medicare Part D is another common addition. You won’t need it if you have an Advantage plan, but if you choose Original Medicare adding Part D will help you pay for prescription medicines you need.
Medicaid: A State-Based Program for Lower-Income Individuals
If you’re under 65 and not disabled, you may wonder if you can still get help with health insurance. In many states, the answer is yes — through Medicaid. What is Medicaid? Medicaid is a state-based program that helps lower-income individuals and families get the health care they need.
Eligibility
Understanding eligibility for Medicaid can be a challenge because each state sets its own rules. You may qualify for coverage in one state but not another.
One of the biggest differences between states is whether or not they chose to extend eligibility during the passage of the Affordable Care Act (ACA) in 2010. 39 states adopted the Medicaid expansion, which made the coverage more available.
In states that adopted Medicaid expansion, you can qualify for coverage based on your income alone. Your household size, disability, or family status do not affect the decision. If your income is below the limit, you’ll qualify.
In other areas, you may only qualify if other standards apply, such as having children or living with a disability.
Benefits and Cost
Medicaid plans vary depending on the state you’re in. However, some benefits are available in every state. These include inpatient and outpatient care, family planning services, nursing facility services, lab and X-ray coverage, and health screenings and treatment for children.
To determine the specific benefits in your state, be sure to visit the Medicaid page on your state’s Health and Human Services website.
A big difference between Medicaid vs Medicare is that Medicaid recipients generally do not pay for services. There is no monthly premium, and most services are free of charge. For some services there may be a small copayment.
Dual Eligibility
Some people are eligible for both programs. If you’re older and have a lower income, you may be able to enroll in both Medicare and Medicaid.
In this case, Medicare covers most of your services. However, your Medicaid coverage will likely take care of the copayments and deductibles you’d normally owe for Medicare-covered services. Also, your Medicaid coverage will offer additional benefits, such as long-term care, that are not covered by Medicare.
If you want to use both programs, be sure to talk to your state Medicaid office for details.
What is the Difference Between Medicare and Medicaid?
It’s challenging that the two public health insurance options have names that are so similar, but Medicare and Medicaid provide coverage for two very different situations.
Now that you know the answer to “What is the difference between Medicare and Medicaid?” you know what to do. If you’re older or disabled, look at Medicare coverage. If you’re lower-income, look at your state’s Medicaid program.
In some cases you may qualify for both — in that instance, talk to your Medicaid office for details about using both coverages.
Interested in more information and advice from Grandma? Check out the other articles on this site!
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