Medicare vs. Medicaid
Medicare and Medicaid are government-sponsored programs designed to help people pay for healthcare costs. While both programs are taxpayer funded, they are vastly different and have differing eligibility requirements and coverage. Medicare is an insurance program created to address the high medical costs older people face relative to the rest of the population. Medicaid, on the other hand, is an assistance program designed to help low-income people by paying for medical costs. You may qualify for both Medicare and Medicaid, but you must meet separate eligibility requirements for each program.
Medicare is an insurance program attached to Social Security that's paid for by people paying into Social Security. Medicare is available to people 65 or older, whatever their income, younger disabled people, and dialysis patients. It's administered by the federal government and generally operates the same everywhere in the United States. The four-part Medicare program includes:
- Part A: Hospitalization coverage provides basic coverage for hospital visits, nursing facility visits, and home health care.
- Part B: Medical insurance pays most doctor and laboratory costs, and some outpatient medical services, including supplies and equipment, home health care, and physical therapy.
- Part C: Privately purchased supplemental insurance provides additional services.
- Part D: Prescription drug coverage pays some of the costs of prescription medications.
You're generally not required to pay a monthly premium for Part A coverage if you or your spouse paid Medicare taxes while working. If you buy Part A, you'll pay a monthly premium ($407 in 2015). On the other hand, you can receive premium-free Part A at 65 if you already receive retirement benefits from Social Security, if you're eligible to receive Social Security, or if you or your spouse held Medicare-covered government employment.
In addition, most people pay the Part B premium ($104.90 in 2015). Individuals are also required to pay $147 per year as their Part B deductible. Finally, under Part D, you'll pay a premium, yearly deductible, copayments or coinsurance, and other costs.
Medicaid is an assistance program paid for by taxpayers. Medicaid is available to low-income people of all ages who fit into an eligibility group that's recognized under federal or state law. It's administered by states and local governments within federal guidelines and can vary from state to state. Services differ, but the federal government mandates coverage for certain services when they are deemed "medically necessary." These services generally include:
- Doctor services
- Family planning
- Laboratory services
- Nursing services
- Medical and surgical dental services
- Nursing facility services
- Home healthcare for people eligible for nursing facility services
- Clinic treatment
- Pediatric and family nurse practitioner services
- Midwife services
- Screening, diagnosis and treatment services for persons under age 21
States have the option of including additional benefits, such as prescription drug coverage, optometrist services, medical transportation services, physical therapy, prosthetic services, and dental services. Depending on your particular state, you may be asked to pay copayments, coinsurance, deductibles, and similar charges. However, out-of-pocket costs are limited and typically only apply to groups of individuals with relatively higher incomes.
People who qualify for both Medicare and Medicaid are referred to as being "dual eligible." If you qualify and enroll in both programs, the two can be coordinated to cover your health care costs. The Affordable Care Act created a new office, the Medicare-Medicaid Coordination Office, to coordinate care for people who are dual eligible. The mission of the Office is to make the two programs work together more effectively and thereby improve care and lower costs.
Long-Term Care and Other Considerations
Medicaid is the largest source of long-term care funding. Long-term care isn't covered by Medicare or, in many cases, by private health insurance policies. As a result, many patients rely on Medicaid to help pay for their long-term care. Because Medicaid requires recipients to have virtually no assets, many attorneys specialize in assisting people in divesting their assets so that they may qualify for Medicaid and receive long-term care.
If you have questions about the eligibility requirements for Medicare and Medicaid, the benefits involved, or any other issues related to the two programs, it's in your best interests to contact an attorney who specializes in elder law.