Do you get confused by Medicare versus Medicaid? While similar in name, these two programs have some very important differences. Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). It is nationalized healthcare for those who qualify.
Different parts of Medicare cover specific services:
- Medicare Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
- Medicare Part B (Medical Insurance) covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
- Medicare Part D (prescription drug coverage) covers the cost of prescription drugs and many recommended shots or vaccines.
Medicare Part C, commonly known as “Medicare Advantage,” is an “all in one” bundled plan that is the HMO of Medicare. This alternative offers Part A, Part B, and usually Part D with extra benefits like vision, hearing, and dental. These plans often charge lower monthly premiums with higher out-of-pocket costs.
Conversely, Medicaid is a need-based health coverage program operated by states, within broad federal guidelines. Although the federal government pays a portion of the costs, Medicaid is administered and operated by states, and each state’s program is a little different depending on the needs and goals of that state. Eligibilities differ in each state. States are required to cover certain benefits and others are optional.
Medicaid, together with the Children’s Health Insurance Program (CHIP), provides health coverage to over 72.5 million Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. Federal law requires states to cover certain groups of individuals, such as low-income families, qualified pregnant women and children, and recipients of Supplemental Security Income, with an option to cover more groups. Medicaid is the single largest source of health coverage in the United States. Financial eligibility for Medicaid is determined by Modified Adjusted Gross Income (MAGI). Eligibility for the Medicare Savings Programs, where Medicaid pays Medicare premiums, deductibles, and/or coinsurance costs for beneficiaries eligible for both programs (often referred to as dual eligible) is determined using income methodologies of the SSI programs administered by SSA.
Do you have more questions about the Medicare and Medicaid programs? Our office is here to help. Please reach out to us to schedule an appointment.