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May 20, 2024

Difference Between Medicare and Medicaid

Medicaid and Medicare coverage are two government-sponsored health insurance for people with disabilities, seniors, children, pregnant women, and financially incapable people, ensuring they can access care services when they need it.


Medicare is a federal health insurance program, while Medicaid is a state and federal program that aims to alleviate the financial burden on U.S. citizens who legitimately can't afford it. This article explains the difference between both programs and their eligibility criteria.


What is Medicare?

Medicare is federal health insurance provided by the government of the United States. Medicare provides health coverage for people aged 65 and older, and children or adults with certain disabilities or specific health conditions. 


It helps cover medical care costs, like doctor and hospital visits, and other healthcare services. It is divided into different types/parts for different areas of healthcare.

  • Medicare Part A
  • Medicare Part B
  • Medicare Part C
  • Medicare Part D

Medicare helps alleviate the financial burden of medical expenses and ensures access to necessary healthcare services.


What are the Types of Medicare Programs?

There are several types of Medicare programs available to anyone eligible in the United States. These include:

  • Medicare Part A (Hospital Insurance) covers vital services like skilled nursing facility care, inpatient hospital care, hospice care, etc.
  • Medicare Part B (Medical Insurance) covers outpatient medical services like doctor visits, medical supplies, and certain diagnostic tests.
  • Medicare Part C (Medicare Advantage) is offered by private companies approved by Medicare. These plans combine Parts A and B coverage.
  • Medicare Part D (Prescription Drug Coverage) provides prescription drug coverage through private insurance companies.
  • Medicare Supplement Insurance (Medigap) is offered by private health insurance companies. Medigap plans help cover the out-of-pocket costs (e.g., deductibles, copayments, coinsurance) associated with Original Medicare.

The eligibility requirements and coverage each program offers vary by state, so it's crucial to understand completely before choosing one. You can learn more about Medicare by visiting the official website.


How Do You Qualify for Medicare?

Medicare eligibility is straightforward. You simply have to be a legal resident or citizen and a few other requirements.

Age Requirement: You must be at least 65 or older. However, some people may qualify for Medicare before turning 65 if they have specified disabilities or specific medical conditions.

Citizenship or Legal Residency: You must be a U.S. citizen or a legal resident who has lived in the United States for at least five consecutive years.

Work History: You can become eligible for Medicare based on your work history or that of your spouse. Typically, you or your spouse must have paid Medicare payroll taxes for at least 10 years (40 quarters) while working.

Medicare Part A: You are eligible for premium-free Medicare Part A if you or your spouse have worked and paid Medicare taxes for the required duration (usually 10 years). If you don't meet the criteria, you may still be eligible but may have to pay a premium.

Medicare Part B: Enrollment in Medicare Part B is optional but recommended. To qualify, you must be eligible for Medicare Part A, U.S. citizen, or legal resident.

Medicare Part C and Part D: If you choose to enroll in Medicare Part C or Part D, you must be enrolled in both Medicare Part A and Part B.


What is Medicaid?

Medicaid is a joint federal and state program providing health coverage to low-income earners. It is similar to Medicare but focuses on helping people with limited income and resources who can't afford healthcare on their own. 


Medicaid offers free or low-cost healthcare services, like visiting the doctor, hospital stays, prescription medications, preventive care, and more.


Unlike Medicare, which serves people with disabilities, Medicaid is available to people of all ages, including children, pregnant women, parents, and adults without dependent children.


While Medicaid is mostly free, some states offer Medicaid programs with expanded coverage options or higher income thresholds. These programs may require a monthly premium, similar to a health insurance premium.


How Can You Qualify for the Medicaid Health Insurance Program?

To qualify for Medicaid, you must meet specific income and resource requirements set by your state. The eligibility criteria vary and the criteria may be different depending on your state but the pointers below should give you a view of what to expect:


1. Income Requirements

Medicaid is for families with low income. The income limits for eligibility vary from state to state and depend on family size and household income. In some states, eligibility is expanded under the Medicaid expansion provision of the Affordable Care Act, allowing coverage for people with slightly higher income levels.


2. Categorical Eligibility

Medicaid covers low-income adults, children, pregnant women, parents, and people with certain health conditions and disabilities. Each category has its own set of criteria, and eligibility can differ between states.


3. Assets and Resources

Medicaid also considers your assets and resources when determining eligibility. This includes savings, investments, property, and other assets. Primary residence and personal belongings may be exempt from consideration.


4. Citizenship or Legal Residency

You must be a U.S. citizen or a qualified non-citizen with a valid immigration status and meet residency requirements set by your state. Generally, you should be a resident of the state where you are applying for Medicaid.

You can always find out if you're eligible for the state Medicaid program by visiting the Medicaid agency or their website to learn more. Every state has one.


What are the Types of Medicaid Programs

Medicaid programs can have different names and coverage options in different states. However, there are several common types of Medicaid programs available:

  • Medicaid for Low-Income Adults
  • Medicaid for Pregnant Women
  • Medicaid for Children
  • Medicaid for People with Certain Disabilities
  • Medicaid Long-Term Services and Supports (LTSS)
  • Medicaid Expansion

You need to speak with an agent from your state's Medicaid office to learn more.


What's the Difference Between Medicare and Medicaid?

The main differences between these two programs include the following:


1. Coverage Population

  • Medicare primarily serves seniors and those with disabilities or specific medical conditions, regardless of income
  • Medicaid can help low income families and adults, children, pregnant women, parents, and individuals with disabilities. Medicaid serves people of all ages who meet income and eligibility requirements.

2. Eligibility Criteria

  • Eligibility for Medicare is based on age and work history
  • Eligibility for Medicaid is based on income and other factors, depending on your state.

3. Program Administration

  • The federal government administers Medicare through the Centers for Medicare & Medicaid Services (CMS).
  • The federal government and individual states jointly fund Medicaid.

4. Coverage and Benefits

  • Medicare provides coverage for hospital care (Part A), medical services (Part B), optional private insurance plans (Part C), and medicare drugs (Part D).
  • Medicaid covers preventive care, doctor visits, prescription medications, hospital stays, etc.

Understand that you can be eligible for both Medicare and Medicaid and in such cases, you'll be referred to as a "dual-eligible" beneficiary. Dual-eligible beneficiaries can receive coverage from both programs to help meet healthcare needs.


Does Medicare or Medicaid Cover Nursing Home Care?

Both Medicare and Medicaid provide coverage for nursing home care but under different circumstances. Medicare covers short-term skilled nursing facility care following a hospital stay, while Medicaid covers long-term nursing home care for people who meet specific income and asset requirements.


Does Medicare or Medicaid Cover In-Home Care?

Medicare provides limited coverage for medically necessary in-home care services, focusing on skilled nursing care, therapy, and home health aide services. Medicaid coverage for in-home care varies by state and may include personal care assistance, homemaking services, and respite care.

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