Government programs such as Medicaid and Medicare play crucial roles in helping people access healthcare services, but it’s essential to understand their differences.
Despite their similar names and shared origins in 1965 as federally funded programs, Medicaid and Medicare serve distinct purposes and populations.
- Medicare is designed for individuals aged 65 and older, as well as certain younger people with disabilities or specific medical conditions
- Medicaid primarily serves low-income individuals and families who cannot afford healthcare costs.
While both programs are essential components of the healthcare safety net, they are different. By comparing Medicaid and Medicare, you can make informed decisions and access the appropriate healthcare coverage for your circumstances. Let’s start!
What is Medicare?
Medicare is a federally funded health insurance program designed to assist individuals aged 65 and older, as well as disabled residents of the United States who struggle with the financial burden of medical care and treatment. Through this program, financial aid is provided to enrollees and their families.
Under certain circumstances, individuals under the age of 65 with disabilities may also qualify for Medicare benefits. Eligibility criteria and program specifics vary, with each case evaluated based on individual circumstances. Additionally, individuals who have reached the last stage of kidney disease may apply for Medicare benefits.
First, there is the Original Medicare
Medicare offerings are divided into several parts, each covering different aspects of healthcare services. Original Medicare — parts A & B — is the primary health insurance option for many older Americans. Here’s what these parts cover:
- Medicare Part A (Hospital Insurance): Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care services. Most people do not pay a premium for Part A if they or their spouse have paid Medicare taxes while working.
- Medicare Part B (Medical Insurance): Part B covers certain doctor’s services, outpatient care, medical supplies, and preventive services. Beneficiaries pay a monthly premium for Part B coverage.
There is also Medicare Advantage and Medicare’s Prescription Drug Coverage
You have the option to enroll in other plans depending on your needs. These include:
- Medicare Part C (Medicare Advantage): Also known as Medicare Advantage, Part C offers an alternative way to receive Medicare benefits through private insurance companies approved by Medicare. These plans typically include the same coverage as Parts A and B but may offer additional benefits such as vision, dental, and prescription drug coverage.
- Medicare Part D (Prescription Drug Coverage): Part D provides prescription drug coverage through private insurance plans approved by Medicare. Beneficiaries typically pay a monthly premium for this coverage.
Finally, there is Medicare Supplement, aka Medigap
While Original Medicare (Parts A and B) provides essential coverage for hospital and medical services, it doesn’t cover all healthcare costs. This is where Medicare Supplement Insurance, also known as Medigap, comes into play.
Medigap plans, offered by private insurance companies, are designed to fill the gaps in Original Medicare coverage. These gaps include copayments, coinsurance, and deductibles. To benefit from a Medigap plan, you must be enrolled in Medicare Part A and Part B, ensuring comprehensive healthcare coverage. Also of note, Medigap does not include prescription drug coverage (Part D).
What is Medicaid?
Medicaid is a jointly funded federal and state health insurance program that provides comprehensive healthcare coverage to eligible low-income individuals and families who may otherwise struggle to afford healthcare — regardless of age.
What’s covered by Medicaid?
By covering preventive services like screenings, vaccinations, and wellness visits, Medicaid helps prevent and detect health issues early, leading to better overall health and reduced healthcare costs over time. Medicaid also covers doctor visits, hospital stays, prescription drugs, laboratory services, mental health services, and more. In many instances, Medicaid may even provide coverage for long-term care services and support.
Who is covered by Medicaid?
Medicaid plays a vital role in supporting vulnerable populations, including children, pregnant women, individuals with disabilities, and seniors who may have complex healthcare needs and limited financial resources.
What are Medicaid’s criteria for eligibility?
Medicaid eligibility varies by state and is based on income, household size, disability status, and other factors. While the federal government sets minimum eligibility standards, states have the flexibility to expand coverage and establish additional eligibility criteria.
What are the differences between Medicare and Medicaid?
There are three major differences between Medicare and Medicaid
1 – Who administers it?
- Medicare is managed by the federal government.
- Medicaid is managed by each individual state.
2 – Who is eligible to enroll?
- Medicare eligibility is based on age or disability.
- Medicaid eligibility depends on income.
- Some individuals qualify for both Medicaid and Medicare, known as dual eligibility.
3 – What does it cost?
- Medicare enrollees share the costs of coverage through monthly premiums, co-pays, and deductibles.
- Medicaid enrollees have minimal or no out-of-pocket costs for covered healthcare expenses.
Need more assistance?
Whether you’re approaching Medicare eligibility for the first time or considering switching plans during the annual enrollment period, we’re here to support you every step of the way.
Connect with the Guided team today for an assessment of your situation and advice that will empower you to make an informed decision.
