Difference Between Medicare and Medicaid?
Although they have very similar sounding names, there are many differences between Medicare and Medicaid. While each of these government sponsored programs was established in 1965 – and each was primarily designed for helping to cover various types of health care expenses – both the actual coverage, as well as the requirements for eligibility for enrollees differ significantly.
What is Medicare?
Medicare is considered to be a national social insurance program. It is federally sponsored. The program covers certain health care expenses for all U.S. citizens – as well as legal residents of five years or more – who are age 65 or older, or who are under age 65 and qualify for benefits based on various health conditions. The Medicare program does not base a person’s eligibility on the amount of assets or income that a person has.
There are four parts to Medicare. These include the following:
Part A – Hospitalization. Medicare Part A provides coverage for hospitalization services. Many people receive Medicare Part A premium free, provided that they paid taxes into the Medicare program throughout their working lives.
Part B – Doctors’ / Medical Services. Medicare Part B covers physicians’ services and certain other types of medical related expenses. There is a monthly premium that is charged for Medicare Part B. With coverage under Medicare Parts A and B, enrollees can generally receive their health care services from the provider of their choice. Medicare Part A and Part B are referred to as “Original Medicare.”
Part C – Medicare Advantage. Medicare Part C, or Medicare Advantage, is actually an alternative to Medicare Parts A and B. This part of Medicare is run in a similar fashion to an HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization) where participants must typically see providers that are within a particular network. In return, costs are usually lower.
Part D – Prescription Drug Coverage. Medicare Part D provides coverage for prescription drugs. Part D is also sold by private insurance companies. Therefore, there are numerous options to choose from and enrollees can choose from either very basic or comprehensive benefits.
What is Medicaid?
Medicaid is also a government sponsored program. However, this program is jointly funded between the federal government and each of the individual states. Medicaid provides health care services, as well as long-term care, to low income individuals. This program is actually the largest source of funding for health and medical services for those with low income in the U.S.
Those who may qualify for Medicaid coverage can include:
Low income families who have children
Certain low income pregnant women and their children
Low income seniors who are age 65 or over
Individuals who are blind
Disabled individuals who are also receiving Supplemental Security Income (SSI)
Individuals who have extremely high medical bills
Medicaid may also pay various expenses for skilled nursing home care, as well as for home care costs for seniors who have a low amount of income and a limited amount of assets. In most cases, such individuals must meet their individual state’s definition of the poverty level. (This varies from state to state).
Can You Qualify for Both Medicare and Medicaid Benefits?
In some cases, an individual may qualify for both Medicare and Medicaid. These individuals are referred to as “dual eligibles.” In these cases, a person will typically receive Medicare Part A and Part B, as well as full Medicaid benefits, where Medicaid will pay for part or all of the person’s Medicare deductibles, copayments, and coinsurance. In some cases, a dual eligible may even be covered with benefits that aren’t offered by Medicare such as dental, vision, and hearing.