Medicare and Medicaid are two government-run health insurance programs that offer coverage to millions of people across the United States. But what are the differences between them? In this blog post, we will take a look at the benefits offered by Medicare and Medicaid, as well as the deductibles and coinsurance associated with each program. We will also discuss how enrollment in these programs works, and who is eligible for coverage.
What is Medicare?
Medicare is a health insurance program run by the federal government for all Americans age 65 and older. People younger than 65 who have certain qualifying illnesses and disabilities can also qualify for Medicare. As of 2018, nearly 60 million Americans receive their health insurance through Medicare.
This program comes in four parts:
Medicare Part A & Part B (Original Medicare)
Medicare Part A covers in-facility healthcare. This encompasses stays in the hospital, hospice services, and specialized nursing care. It can also cover some in-home services.
Medicare Part B covers the bulk of medical care. It applies to doctor appointments, outpatient services, medical supplies, preventative medicine, and ambulance services.
Most Americans become eligible for Part A once they begin receiving Social Security retirement benefits. Your eligibility is also contingent upon being either a U.S. citizen or a legal permanent resident for at least five years.
If you’re eligible for premium-free Medicare Part A coverage, you’ll also be eligible for Part B. Those who pay a premium for Part A will only gain eligibility for Part B if they are 65 or older and are either a U.S. citizen or a permanent resident for at least five years. Medicare Part B, however, includes its premium.
What About Drug Coverage?
Medicare Part D
Part D covers the benefits of prescription drugs. Individuals, typically for an additional cost, can enroll in specific Medicare Part D plans.
The requirements for joining Medicare Part D are simple. First and foremost, you need to have either Medicare Part A or B. Next, you must live in the service area of a plan that provides coverage for prescription drugs.
Medicare Advantage (Part C)
Medicare Advantage, also known as Medicare Part C, is offered through private insurance companies rather than via the federal government. To be part of this program, these outside insurance companies must gain approval.
Under these plans, the government pays a set fee every month to a private insurance company, which in turn provides coverage to the enrollee. In some cases, you mainly gain access to extra coverage for vision, dental and more. According to the Kaiser Family Foundation, around one-third of all Medicare beneficiaries in 2018 is part of the Part C program.
Similar to Medicare Part D, Medicare Advantage requires that enrollees already have Part A and Part B coverage. To maintain eligibility, you must live in the service area of the plan you want to join.
Medicaid is…
Medicaid is a government-sponsored health insurance program for Americans in need. It is jointly run by the federal government and individual state governments. January 2019 data from the government indicates that approximately 65.8 million people receive their healthcare through Medicaid.
The federal government, through the Department of Health and Human Services, oversees Medicaid at a national level. Each state has an agency that implements the program within that state. That means that the specifics of Medicaid enrollment, eligibility, and coverage differ from state to state.
How Does Medicaid Cover You?
What Medicaid Covers
Coverage under Medicaid is a combination of federal requirements and state policy. Mandatory benefits include inpatient hospital services, rural health clinic services, and doctor’s visits. Optional benefits vary on a state-to-state basis and include prescription drug coverage, eyeglasses, and dental services.
For eligible services, Medicaid operates like a standard health insurance program. Depending on the state, it might require a copayment or monthly premium based on the individual’s modified adjusted gross income (MAGI). For example, Arkansas charges individuals who make more than 100% of the federal poverty level a monthly premium capped at 2% of their income.
Medicaid Eligibility
Most often, eligibility for Medicaid is based on financial need as determined by MAGI. Each state sets its standards for income level which qualifies someone for Medicaid coverage. This is often expressed in terms of the federal poverty level. For example, a cutoff of 120% would include someone who makes up to 120% of the federal poverty level in MAGI.
Under the Affordable Care Act, states can extend coverage to everyone who earns up to 138% of the federal poverty level. The federal government pays for this expansion of services.
Acts of Congress have created a list of “Mandatory Eligibility Groups,” which are categories of people who must have access to Medicaid coverage. People with certain conditions, such as blindness or permanent disability, can qualify for Medicaid coverage, regardless of income. For a full list of each state’s qualifications, check out your state’s Medicaid for more details.
Dual Programs with Medicare and Medicaid
Some Americans are eligible for both Medicare and Medicaid. According to the Kaiser Family Foundation, about 17% of all Medicare beneficiaries also have Medicaid coverage.
For those who qualify, Medicaid can act as supplemental insurance to help with costs not covered by Medicare. In some cases, it might even pay the entire premium for Part B or Part D coverage.
The Bottom Line
Medicare and Medicaid are two important government-sponsored health insurance programs. They both provide essential coverage for Americans in need, but there are some key differences between the two. Medicare is available to all Americans over the age of 65, while Medicaid is needs-based and available to low-income Americans of all ages. Medicare covers hospitalization, doctor’s visits, and some preventive care, while Medicaid coverage varies by state but often includes prescription drugs, dental services, and long-term care. Finally, some Americans are eligible for both programs.
If you’re not sure which program you qualify for, or what coverage is available to you, your best bet is to contact your state’s Medicaid office for more information. We can also assist in finding out for you. Give us a call.