Medicare vs Medicaid: Key Differences You Need To Know

In a nation of aging baby boomers, many with disabling conditions, the need for comprehensive and effective medical assistance is paramount. To solve this problem, the federal government has created two programs: Medicare and Medicaid. There are many similarities between these two programs and many differences.

Medicaid vs Medicare

In 1965, Congress passed Medicare under Title XVIII of the Social Security Act in July and Johnson signed it. He was on his way to making his “Great Society” a reality.

Medicare and Medicaid came out of this legislation. Medicare provided health insurance to anyone over 65. Medicaid provided assistance to anyone receiving ‘welfare’ or cash assistance. Over the years both programs have expanded their eligibility to include more people.

The differences in the two programs largely fall into who is covered by that program and how it is funded and governed.

Both of these government programs were designed to provide certain healthcare benefits to those who need it the most. Medicare is largely a federal government health insurance program designed for the elderly and the disabled who are receiving Social Security payments.

Medicaid is a financial assistance program not an insurance program. Medicaid targets individuals and families with no or low income. It is governed by both the federal and state governments and administered on the state level through a financial means test. The primary people eligible for Medicaid even today are children. Medicaid is funded by various taxes and revenue from the U.S. Treasury.

The biggest differences between the two programs are who they serve, how they are governed and how they are funded. The benefits they offer have some cross over and some differences. The best way to understand it is to review the two programs, who they are for and what they offer.

The Basics of Medicare

Medicare Definition

A national health insurance program for those over 65 years of age or those under 65 with qualifying disabilities.

Eligibility

The eligibility requirements for Medicare changed over the years as more disabilities were recognized and more people qualified. Income is not a consideration in qualifying for Medicare if you had worked and paid into the program.

  • Anyone over 65 who had worked and paid into Medicare for at least ten years are eligible for Part A (hospitalization – inpatient).
  • Anyone receiving Social Security Disability payments for at least 24 months (SSDI).
  • Persons with End Stage Renal Disease (ESRD).
  • Persons with ALS/Lou Gehrig’s Disease (Amyotrophic lateral sclerosis).
  • Anyone receiving a disability pension from the RRB (Railroad Retirement Board).

Benefits

Medicare benefits do not vary. They are the same for everyone. They include:

  • Routine medical care
  • Routine emergency care
  • Hospice
  • Some dental
  • Some vision
  • Family planning
  • Certified pediatric and family nurse practitioner services
  • X-ray and laboratory services
  • Rural health clinic services
  • Freestanding Birth Center services
  • Tobacco cessation counseling for expectant mothers
  • Midwife services

Medicare can be confusing as there are many parts to it and you don’t automatically receive all parts.

    • Part A is the automatic part with no premiums.
    • Part B includes more medical services and providers but there is a premium for most people of a little over $100.00 a month.
    • Part C gives you the chance to join a Medicare Advantage Plan through many insurance companies. Usually, you have your choice of doctors and receive all services you would get with Part A, B, and D.
    • Part D covers prescription drugs and there is a premium with this of around $30-$50.
    • Part F allows you to purchase a Supplemental Insurance Plan to pay for the things that Part A and B might not pay for.

 

 

What Does it Cost You?

Everyone pays the premium for Part B even if you have a Medicare Advantage Plan. Some Advantage Plans have premiums and variable deductibles, some only have a deductible. If you choose ‘original’ Medicare, you will pay a premium for Part B and Part D if you choose to purchase it. There would be an additional premium if you choose a supplemental in Part F.

The Basics of Medicaid

Medicaid Definition

A national health care assistance program for low-income individuals and families governed jointly by states and the federal government.

Eligibility

Initially, there were only people on cash assistance or “welfare” that were eligible. Today the following groups are eligible:

  • No income individuals or family
  • Low-income individuals or family
  • Pregnant women
  • People with disabilities regardless of their age
  • People who need long term care

All of these groups had to pass a financial means test in order to be eligible. Following the passage of the Affordable Care Act, states were allowed to make their financial means 138% of the Federal Poverty Level. States were allowed to opt out and almost half did so. In those states, you must be at the FPL or lower.

Benefits

Benefits vary from state to state as each one determines what benefits are most needed by the people in their state. In most states’ children receive the most comprehensive benefits. Adult benefit varies greatly from state to state. The benefits that states can offer if they choose to include:

  • Emergency care
  • Routine medical care
  • Hospice
  • Family Planning
  • Smoking and substance cessation
  • Some dental
  • Some vision
  • Personal Care
  • Early and Periodic Screening, and Diagnostic, and Treatment (EPSDT) services for children
  • Midwife services
  • Freestanding Birth Center services
  • Therapies: Speech, respiratory, hearing, physical and occupational

What Does it Cost You?

This also varies from state to state. Some states charge high deductibles while other states don’t charge a deductible at all. This again might be tied to a financial means test. There are many service providers that will not provide services for Medicaid payment. Those on Medicaid have fewer choices of providers than those on Medicare.

Which Program Applies to You?

It should be easy to know which one you qualify for mostly dependent on your income. It is also possible to qualify for both. You are dual eligible if you qualify for Medicaid by the means test and for Medicare Part A and/or Part B by age or disability.

Many states run Medicare Savings Programs (MSPs) and if you are dual eligible you may qualify for benefits through this program. MSP will take care of premiums, copays, and deductibles to further reduce your costs. It will vary based on income, but some people will receive all out of pocket expense paid. These people are considered Full Benefit Dual Eligible (FBDE). Persons in an MSP automatically receive Medicare Extra Help eliminating most if not all prescription copays..

6 thoughts on “Medicare vs Medicaid: Key Differences You Need To Know”

  1. I need help with the cost of my drugs Is there a program or agency that I can contact that can advise me what I can do. Please advise

  2. There is a program called ‘EXTRA HELP’ which can pay for great part of your medicines copay. Social security social worker or this resource center may be able to help through the process of getting this ‘extra help’.

    1. Catherine Bonilla

      How do I apply for medicaid through social security, public aid denied me Medicaid through there program, an told me to go through ssa cause I get my breakthrough them

  3. juanita h rodriguez

    i can not afford my medication it cost around 739.00 i only get around 750.00 a month from pension and s.s can i get help

  4. I am 77 years old and on Medicare and my husband’s military insurance. I’m disabled and cannot get around without a wheelchair which my husband pushes. He will be 78 in August and is beginning to need assistance getting around himself. We have been told we don’t qualify for a electric scooter because my husband didn’t serve during a war period even though he was in the Navy and then the Coast Guard for over 30 years. Are there any programs available that can assist me with obtaining a scooter so that I can go to doctors’ and other medical appointments. Thank you for any help you can give me.

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