Medicare vs Medicaid: Everything You Need to Know
Each year millions of US citizens get medical funding and assistance through either Medicare or Medicaid. But how many of us actually know the difference between medicare and medicaid? Our guide will help you to discover the ins and outs of these government programs.
Medicare and Medicaid Basics
For some people, the lines between medicare and medicaid may not be clear. With similar names and the same basic purpose, many are often confused about what each program has to offer and how it works. There are many differences, however, both are programs run by the government to help citizens pay for their health care.
What is the Difference Between Medicare and Medicaid?
Medicare is primarily funded by the federal government for a majority of United States citizens and permanent legal residents who meet the designated qualifications. This is not the same for Medicaid, which is funded by both the state and federal government. Medicaid is supportive of low-income families and people who meet all of the requirements of the program.
Medicare Benefits vs Medicaid Benefits
Medicare and Medicaid have similar benefits and coverages but some people might have dual eligibility, meaning they can get both programs. If you are dual eligible the two programs can be coordinated so that your health care costs are covered.
Medicaid Covered Services
From state to state different services might or might not be included since each state runs their own program. Although each Medicaid program is different, all programs are required to have certain coverage for specific services. Medicaid.gov states that mandatory coverages include:
- Lab & X-ray services
- Nursing Facility services
- Inpatient and Outpatient hospital services
- Nurse Midwife services
- Medical care transportation
- Rural health clinic services
- and more!
Other benefits that might be included in your individual state's Medicare program include prescription drugs, dental services, hospice.
Medicare Covered Services
The Medicare program comes in parts A through D which all cover different services.
Medicare Part A
Medicare part A covers any home health care, inpatient hospital care, hospice, skilled nursing facilities, lab tests and surgery.
Medicare Part B
Part B of the Medicare program (medical insurance) covers outpatient hospital care, select preventative services, medical equipment, doctor services, home health care and other health care providers' services.
Medicare Part C
Medicare Part C is supplemental plans that can be privately purchased to cover additional services that Medicare part A and B might not cover.
Medicare Part D
Prescription drugs are covered through Part D of the Medicare program. Each prescription drug plan has a different list of the drugs that are covered under each tier of prescription drug.
Who is Eligible for Medicare?
Medicare is a program that is connected with Social Security. Medicare is available to any US citizen or permanent legal resident who has been in the US for at least 5 years and is at least 65 years old. In certain situations it also may cover people with disabilities.
For those who are younger than 65 to be eligible for Medicare you must:
- have received 2 years of SS disability benefits or a disability pension from the RRB (Railroad Retirement Board).
- have Lou Gehrig’s disease
- Have permanent kidney failure and need regular dialysis or a kidney transplant
If you or your spouse have worked for at least 10 years and have paid Medicare taxes you could qualify for a premium-free Part A plan. To qualify for Medicare parts C and D, you must already be enrolled in Parts A and B.
Medicaid is offered to low income families and individuals who demonstrate a need. Therefore this program has firm income eligibility requirements which are different depending on the state you live in.
Who Pays for Medicare and Medicaid?
Payroll taxes and SS income deductions fund Medicare parts A and B. Participants in the Medicare program pay out-of-pocket for parts C and D. As for Medicaid each individual state has the option to charge a monthly medicaid premium and to have out-of-pocket requirements. However since Medicaid is a form of public aid that is paid for by tax dollars, usually recipients pay next to nothing for healthcare.
How do I Enroll?
Whether you are about to turn 65, you are ready to retire, or need help getting health coverage you should know about all of your options and how to apply.
Enrollment for Medicare is only open during certain times. Sometimes some people are even automatically enrolled in Medicare when they turn 65. The 7 Month Initial Enrollment Period starts 3 months before turning 65, includes your birthday month, and ends 3 months after turning 65. It is important to know about all of your options so that when the time comes you know just what you want before applying for Medicare through Social Security.
If you are wondering how to sign up for medicaid, all you have to do is fill out an application in coordination to the state you live in. Call your state’s Medicaid office to learn more details about applying and what you need to know to fill out the application. If you are accepted or even if you are not, you should fill out an application every year to renew your plan or to see if your eligibility has changed.
FAQs About Medicare and Medicaid
My Medicare card is lost. How can I get a new Medicare card?
If your card is stolen, lost or damaged you should request a card replacement from the Social Security Administration. You can do this on the website, by phone number or at your local social security office. If you have received your card through the Railroad Retirement Board, you have to go through them to get your replacement card.
What happens if I miss my enrollment window for Medicare?
If you happen to miss your 7 month initial enrollment period you will be able to enroll during the general enrollment period which is from January 1 to March 31 every year. There is a late enrollment penalty for Medicare Part B and for those who have to pay a premium with Medicare Part A.
I can’t afford Medicare’s premiums. Is there help for me?
The Medicare Savings Program pays Part A and Part B coinsurance, premiums, copays and deductibles for those with limited income. For MSP assistance qualification one must earn less than $1,245 and a couple, $1,813.
How can I find a dentist that is covered by Medicaid?
To find an office that accepts Medicaid you can use the Medicaid dental locator.
Will Medicaid pay for my Medicare deductibles and premiums?
Medicaid will pay for the coinsurance, premiums and deductibles for Medicare Parts A and B for people with low income. These people are QMBs (Qualified Medicare Beneficiaries).
What is Medicaid Planning and how does it affect eligibility?
Medicaid planning is any assistance given to a prospective Medicaid applicant in preparation for the application. Medicaid planning is often used when the monthly income of an individual is close to the financial eligibility limit. With legal help, assets are rearranged so the individual becomes eligibility for Medicaid.