Medicaid And Medicare: The Basics
Medicaid is a federal program that is administered separately by each state. This is not the only difference between it and Medicare, however. Medicaid covers low-income people who don’t have the financial means to afford healthcare on the private market, regardless of age, while Medicare applies to everyone who has paid into the system and reached the point of eligibility .
Medicare seeks to address the problem of the elderly having high medical bills, but increasingly limited means. Medicare recipients pay into Medicare through payroll or self-employment taxes.
While it’s possible to qualify for both at the same time, each program has its own set of requirements this means you won’t necessarily be able to enroll in one just because you qualified for the other.
Medicare And Medicaid Cost Differences
Another key difference between Medicare and Medicaid is how much they cost.
The main difference between the two programs is people who get Medicare pay a larger part of the costs for covered procedures and services than Medicaid recipients do.
In fact, people who get Medicaid usually pay no part of the costs for covered medical care. Sometimes theyre charged a small copay, but thats about it.
Medicare recipients, though, often have to pay premiums, deductibles and other out-of-pocket costs for coverage. And not only that, but they often pay them for multiple Medicare parts. For example:
- Most Americans don’t pay a premium for Part A. Those who do pay up to $437 each month.
- The majority do pay a premium for Medicare Part B. The standard amount is $135.50 per month, though it could be higher depending on your income.
- Medicare Part D recipients usually pay monthly premiums, too. How much they pay depends on the drug plan they choose.
How Is Medicaid Funded
Medicaid is funded by the federal government in conjunction with all fifty individual states.
Therefore, unlike Medicare , Medicaid programs differ from one state to another, since the states have control over some aspects of the program.
Medicaid is an entitlement program. This means that anyone who meets eligibility rules has a right to enroll in coverage.
It also means that states have guaranteed federal financial support for part of the cost of their programs.
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Who Qualifies For Medicaid And Medicare
In general, most people turning 65 are eligible for premium-free Medicare Part A based on taxes they paid while working, and can choose if they want to enroll in Part B. Some people under the age of 65 with certain disabilities may qualify for Medicare after theyve been disabled for 24 months.
Medicaid, on the other hand, helps with medical costs for people of any age with limited income and resources. However, there are additional eligibility requirements.
Who can get Medicare? Medicare Part A and Medicare Part B are available to U.S. citizens or permanent legal residents of at least five continuous years who are age 65 or older, as well as some younger individuals who are disabled or have End-Stage Renal Disease .
You are eligible at age 65 and older if:
- You are receiving retirement benefits from Social Security or the Railroad Retirement Board usually after having earned 40 credits from about 10 years of work.
- You are eligible to receive Social Security or Railroad benefits, but you have not filed for them yet.
- You or your spouse had Medicare-covered government employment.
Learn more about eligibility for Medicare Part A and Medicare Part B.
At A Glance: Medicare Vs Medicaid Key Differences Chart
|for the full list of mandated and optional benefits.|
|What services of note are not covered?||Long-term nursing home or at-home careDental, vision, hearing aids||Chiropractic services may be covered in some states Some states dont cover dental or vision care for Medicaid enrollees.|
|What does it cost?||Medicare costs vary depending on the coverage you choose. Costs may include premiums, deductibles, copays, and coinsurance.||Medicaid costs depend on your income and the rules in your state. Medicaid may include low out-of-pocket costs. Some Medicaid expansion enrollees may have to pay premiums|
To help you better understand Medicare vs. Medicaid, lets look into each program with a little more detail.
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Types Of Medicaid Managed Care Plans
An unfortunate reality that our society currently faces is the increasing frequency in which families are seeking managed care for their loved ones. It is a complicated and time intensive process and requires a fair amount of knowledge about how the health care system works. The federal governments Medicaid website is a great resource for all topics related to Medicaid managed care.
It is absolutely understandable that managed care is sought out so frequently given the complex nature of medical assistance programs. In addition to caring for a loved one, the added stress of navigating government programs can take its toll. Managed care plans can be a great asset.
There are three types of Medicaid managed care plans: comprehensive risk-based plans, primary care case management, and limited-benefit plans.
Medicare Vs Medicaid: What’s The Difference
Have you asked yourself, Am I on Medicaid or Medicare? In discussions of government healthcare, these two words always come up and can even sometimes be mistaken for each other. In discussing Medicare vs Medicaid, the distinct difference between the two programs is how to qualify: Medicare is for individuals age 65 and older or on Social Security Disability, while Medicaid is entirely income and asset based. There is no competition between the two they serve completely different groups of people however you can have Medicare and Medicaid if you meet the qualifications for both!
What Services Does Medicare Cover
There are 4 different parts to Medicare. Original Medicare is a fee-for-service health plan that has two parts: Part A and Part B .
Original Medicare pays for much, but not all of the cost for health careservices and supplies.
As a result, there are Medicare Supplement Insurance policies that are soldby private companies.
These policies can help pay some of the remaining health care costs, likecopayments, coinsurance, and deductibles.
Original Medicare: Part A And Part B
Medicare Part A and Part B make up the federal program known as Original Medicare. Learn more about how you qualify for Medicare.
- If youre eligible for Medicare Part A and Part B, you might be enrolled automatically.
- If youre getting Social Security benefits when you turn 65, youre typically enrolled without having to do anything.
- If youre under 65 and get disability benefits, you may be enrolled in Medicare Part A and Part B automatically. Read the details of when youll get enrolled in Part A and Part B if you qualify for Medicare due to disability.
Be aware, though, that sometimes youre not automatically enrolled, and you have to take steps to enroll in Medicare. For example:
- If you have end-stage renal disease , you might qualify for Medicare before youre 65, but you have to sign up through Social Security.
- If you live in Puerto Rico, even if youre automatically enrolled in Medicare Part A, you need to enroll manually in Medicare Part B.
- If you delayed enrollment in Medicare Part A and/or Part B beyond your Medicare Initial Enrollment Period, you need to enroll manually.
This might not be a complete list of occasions when you have to enroll manually.
D Late Enrollment Penalty
For people who dont take any medications, delaying Part D enrollment is a common choice. But unless you have alternate credible coverage, such as you might receive through an employer, you will be assessed an LEP when you enroll in Part D. The LEP is in addition to the monthly premium for Part D and does not count toward deductibles or cost shares for prescription medication.
Who Does Medicare Cover
Medicare is a federal government-sponsored healthcare program for those 65 and over, and for younger people who are disabled. Most people with Medicare paid FICA taxes during their working years, and realize the benefits of that tax through Medicare coverage. The federal government establishes the eligibility criteria for Medicare.
Can You Have Both Medicaid And Medicare
Low-income Medicare beneficiaries can receive Medicare benefits and Medicaid at the same time. The Medicare and Medicaid programs work together to provide healthcare coverage to Medicare recipients who meet the low-income qualifications for Medicaid. However, individuals receiving Medicaid who do not meet Medicares eligibility requirements are not entitled to both benefits.
Looking for Medicare coverage? We offer free, accurate comparisons for Medicare Advantage , Medicare Supplement , and Medicare Prescription Drug Plans.
Get an online quote for Medicare plans that fit your healthcare needs today! Or call TTY 711 to get answers and guidance over the phone from an experienced licensed sales agent.
How Are Medicare Part A And Part B Different
Although both Medicare Part A and Part B have monthly premiums, whether youre likely to pay a premium and how much depends on the part of Medicare.
Most people dont have to pay a monthly premium for Medicare Part A.
- If youve worked and paid Medicare taxes for at least 10 years , you typically dont pay a premium.
- If you worked 30-39 quarters, youll generally pay $240 in 2019.
- If you worked fewer than 30 quarters, youll generally pay $437 in 2019.
On the other hand, most people do pay a monthly premium for Medicare Part B. The standard premium in 2019 is $135.50, but you may pay more if your income is above a certain level. If you have a low income or no income, in some cases Medicaid might pay your Part B premium.
Medicare Vs Medicaid: Differences In Covered Services
Medicaid benefits differ by state, but every state must cover certain kinds of care. These include nursing home and home health care, lab-work and x-ray diagnostic services, inpatient and outpatient hospital services, transportation to a medical facility, and tobacco recess counseling for pregnant women.
Besides paying Medicare-related costs like doctors, hospitalization, and medicines, Medicaid offers two other types of care that Medicare doesnt:
- Custodial care or personal care: This helps you with day-to-day activities.
- Nursing home care: Medicaid is the main provider of long-term nursing home care. Medicare will cover skilled nursing short-term, but it doesnt cover prolonged care.
Because Medicare has very restricted coverage for nursing homes, seniors in need of it may try to qualify for Medicaid.
Dual Eligibility: What If You Qualify For Both Medicare And Medicaid
In some cases, you may be eligible for coverage under both Medicare and Medicaid. This is called dual or dual eligible. There are Medicare Advantage plans specifically available for people who are eligible for both Medicare and Medicaid theyre called Dual Special Needs plans, or DSNPs. DSNPs often cover benefits not offered by Medicare, such as routine hearing, vision and dental coverage. Theyre available to dual-eligible beneficiaries, but so are other Medicare Advantage plans or just Original Medicare plus Medicaid.
Some dual eligible Medicare beneficiaries are eligible for full Medicaid benefits, while others are eligible for Medicaid-funded benefits that help to cover their Medicare premiums and cost-sharing. You can learn more about dual eligibility in this booklet from the Centers for Medicare and Medicaid Services.
What Is Medicare Part A
Medicare Part A is hospital insurance. It may cover your care in certain situations, such as:
- Youre admitted to a hospital or mental hospital as an inpatient.
- Youre admitted to a skilled nursing facility and meet certain conditions.
- You qualify for hospice care.
- Your doctor orders home health care for you and you meet the Medicare criteria. Medicare Part A may cover part-time home health care for a limited time.
Even when Medicare Part A covers your care:
- You may have to pay a deductible amount and/or coinsurance or copayment.
- There may be some services you get in a hospital or other setting that Medicare doesnt cover.
- Its possible that your Part A coverage will run out for example, if you stay in the hospital for more than 90 days in a row, you might have to pay all costs. Learn more about Medicare Part A
- Medicare typically wont pay for a private room or non-medical items such as toiletries or a television in your room.
Medicare Is For Older And Disabled Americans:
Medicare is a national health insurance program for nearly all people aged 65 and older. It is also available for people with certain disabilities, end-stage kidney failure or ALS. Your eligibility for this program has nothing to do with your income level.
This program is divided into several parts: Medicare Part A and B plus optional elements like Medicare Supplement, Medicare Part C and Medicare Part D.
- Part A provides inpatient/hospital coverage.
- Part B provides outpatient/medical coverage
- Part C are Medicare-approved private health insurance plans that replace your Part A and Part B coverage.
- Part D provides prescription drug coverage.
- Medicare Supplement plans add on to, but do not replace, your Part A and Part B.
Original Medicare :
When enrolling for Medicare, unless you choose otherwise, you will receive Original Medicare, which includes Parts A and B. Under Original Medicare, the government pays directly for the healthcare services you receive. You can see any doctor and hospital that takes Medicare anywhere in the country.
While Medicare Part A and Part B cover a variety of necessary health services, they dont cover everything. Thats where extra coverage like Medicare Part C and Part D come in.
Additional Ways To Get Help With Medicare Costs
If you are not considered low income and therefore not eligible for Medicaid, you can enroll in a Medicare Advantage plan also known as Part C. When you opt for Part C, a private carrier pays for your health care instead of Medicare.
Medicare Advantage plans all come with their own cost-sharing. A rule of thumb: the lower your monthly premium, the higher your cost-sharing. You still need to set aside extra funds to cover your medical costs in order to protect your retirement savings.
The other option to help cover cost-sharing is to enroll in a Medigap plan. Medigap plans come with a monthly premium, but they cover significantly more than a Medicare Advantage plan. They also do not have all the limitations Medicare Advantage plans come with.
Did You Know: To learn more about the differences between these types of coverage, read my guide: Medicare Advantage vs. Medigap.
Who Does Medicaid Cover
Medicaid, on the other hand, is a healthcare program for low-income individuals who could not otherwise afford health insurance. Medicaid is jointly funded by the federal government and the state in which an enrollee lives. States establish their own eligibility standards and services for Medicaid, within general parameters set by the federal government. Before the Affordable Care Act , most states only provided Medicaid coverage to disabled and elderly individuals, pregnant women, children, and low-income families who had to be covered according to federal law.
The ACA included a provision to expand Medicaid eligibility to more adults in every state as of January 1, 2014, but a Supreme Court ruling in 2012 made Medicaid expansion optional. As of early 2020, there are still 15 states that have not expanded Medicaid, although Nebraska will expand Medicaid as of October 2020, under the terms of a ballot initiative that passed in the 2018 election. In the District of Columbia and the 35 states where Medicaid has been expanded, coverage is available for anyone with an income up to 138 percent of the poverty level .
Heres more information on Medicaid in each state, and where the states are in terms of Medicaid expansion under the ACA.
Medicare Parts A And B
The premium for Part A is determined by the number of quarters you paid Medicare taxes through employment. Individuals who paid Medicare taxes for 30 or fewer quarters pay a higher premium than those who paid Medicare taxes for 30-39 quarters. The Medicare Part B premium is generally less than the Part A premium but may be higher for people with above-average incomes. Premiums are the amount you pay every month to have insurance and do not affect the plans deductible, co-insurance, or coverage limitations.
Disability Can Make You Dual Eligible
You could be eligible for Medicare and Medicaid if youre on disability:
- Youre eligible for Medicare if youre on Social Security Disability insurance . However, you have to receive two years worth of SSDI payments before becoming eligible.
- Youre eligible for Medicaid if youre approved for Supplemental Security Income . Theres no waiting period, so you can get Medicaid immediately.
Can You Get Insurance To Help Cover Part A And Part B Expenses
As youve seen in this article, Medicare Part A and Part B generally come with out-of-pocket costs for you to pay. Did you know that you might be able to buy a Medicare Supplement insurance plan to help cover those expenses? There are up to 10 standardized Medicare Supplement plans available in most states. Learn more about Medicare Supplement insurance.
You can compare Medicare Supplement plans and Medicare coverage options anytime you like, with no obligation. Type your zip code in the box on this page to begin.
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Medicare Vs Medicaid: Cost
Medicare: People who have worked 40 qualifying quarters , and their spouses or qualifying ex-spouses, pay no premiums for Medicare Part A, which covers hospitalization. But Medicare recipients typically do have out-of-pocket costs, including deductibles and copays. Medicare Part B, which covers doctors visits, and Part D, which covers prescriptions, also require paying premiums.
Medicaid: Medicaid is typically free. Some people may have to pay small copays. Medicaid can also make a claim against peoples assets after they die, but most people receiving Medicaid have few or no assets.