What’s the difference between Medicare and Medicaid? While they may sound similar, Medicare and Medicaid are two separate programs that are managed and funded by different parts of the government. They generally serve different groups, cover different services, and have different shared costs. Read on as the agents at Cornerstone Senior Advisors compare and contrast these two programs.
Similarities Between Medicare and Medicaid
- The U.S. government created both in 1965
- Both programs are funded by taxpayers
- Both can help you pay for medical and healthcare expenses
Medicare vs. Medicaid: Difference in Who They Serve
Medicare is essentially a health insurance program for the elderly, no matter your income.
Medicaid, however, provides health coverage for low-income individuals, no matter their age.
Some folks who are 65 and older can qualify for both Medicare and Medicaid. In that situation, Medicare is primary and Medicaid is secondary.
In other words, if you’re eligible for both, you’re known as dual-eligible (more on this below). These two programs will collaborate to give you good health coverage and reduce your costs. So, Medicare and Medicaid target different population segments. But there are other differences between the two programs.
Medicare vs. Medicaid: Differences in Eligibility Requirements
Who Qualifies for Medicaid?
When there’s a financial need, you may qualify for Medicaid if you fall into one of these groups:
- You’re pregnant
- You’re the parent of a minor or a teenager living alone
- You’re blind, aged, or have a disability
- You have no disabilities or children under 18
Income requirements for Medicaid are usually based on the Federal Poverty Level. The guidelines for your state program will explain the details of your situation. Some of your assets, such as stocks, bonds, additional vehicles, etc., will play a role in determining your eligibility for Medicaid. In most states, the amount of measurable assets you can own and still qualify is $2,000 for an individual and $3,000 for a married couple. Sometimes people have to “spend down” or reduce their assets in order to qualify.
Who Qualifies for Medicare?
In general, Medicare is available for those who are 65 or older, younger folks with disabilities, and people with End-Stage Renal Disease. You’re eligible if you’re a U.S. citizen or have been a legal resident for a minimum of 5 years, and you or your spouse has worked for at least a decade (or 40 quarters) in Medicare-covered employment. Your income doesn’t affect your eligibility for Medicare.
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 doesn’t:
- 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 doesn’t cover prolonged care.
Because Medicare has very restricted coverage for nursing homes, seniors in need of it may try to qualify for Medicaid.
Medicare vs. Medicaid: Differences in Cost-Sharing
Medicaid Cost-Sharing: States have the opportunity to charge premiums and authorize out-of-pocket spending (cost-sharing) requirements for Medicaid enrollees. Children and pregnant women are exempt from most out-of-pocket expenses. Copayments and coinsurance can’t be charged for some services.
Medicare Cost-Sharing: Traditional Medicare charges deductibles, copays, and coinsurance for Medicare services. Additionally, beneficiaries have to pay premiums for getting Part B and Part D coverage. Beneficiaries must pay out-of-pocket for certain services, like vision, dental, and long-term care costs. So, unlike Medicaid, Medicare requires heavy cost-sharing from beneficiaries.
Dual Eligibility for Medicare and Medicaid
As mentioned above, if you qualify for both programs, you’re dual-eligible. Under this condition, most or all of your healthcare expenses will be covered. Medicaid will cover most of your Medicare Part A and Part B premiums (if you have them), plus deductibles and copayments you might have. It doesn’t matter whether you get your Medicare coverage through traditional Medicare or a Medicare Advantage (Part C) plan.
If you’re dual eligible and get full Medicaid, your prescription drug coverage (Part D) will pass through Medicare. However, you’ll automatically qualify for further help with paying for your medication. Additionally, Medicaid might cover some drugs that Medicare doesn’t.
Get Medicare Help from An Expert
The agents at Cornerstone Senior Advisors can help you get the best Medicare Supplement or Medicare Advantage plan for your needs. Check out our blog page, browse our website, or call (316) 260-3331 for more information.