Medicare and Medicaid are large government healthcare programs.
People may qualify for Medicare because they turned 65 or have a qualifying disability.
People may qualify for Medicaid because they have low incomes and few resources, though some states may impose additional eligibility rules.
The Medicare program has four parts, including Medicare Part A, Part B, Part C, and Part D, covering inpatient care, outpatient services, and prescription drugs.
Medicare beneficiaries can also choose to buy a Medicare supplement to enhance their benefits, though recipients cannot have both a Medicare supplement and a Part C plan.
States typically use private insurance companies to deliver Medicaid benefits to recipients.
Medicare and Medicaid are both large government healthcare programs. Its understandable confusion may arise from the similar sounding names and the fact that some qualify for both programs. The Medicare and Medicaid programs work differently, each one offers benefits that the other one doesn’t. Even though some people qualify for both programs, they also have different eligibility rules.
Who Qualifies for Medicare Vs. Medicaid?
Medicaid claims that its program serves about 80 million people. In contrast, about 60 million receive Medicare benefits. A little more than 12 million Americans qualify for both programs (dual eligibility) out of this population.
Consider these distinctions between the two programs:
- Medicare: A health insurance program primarily for people over 65 years old. A smaller percent of Medicare recipients qualify before turning 65 because of a qualifying disability or certain severe illnesses. The federal government runs Medicare, enabling the same essential benefits and rights to people nationwide.
- Medicaid: A low-income health insurance assistance program run through cooperation with the federal government and state governments. Though Medicaid eligibility primarily depends upon income and resources, state rules may differ. For instance, in some states, non-elderly adults must have a qualifying disability.
Primarily, most people qualify for Medicare because they turn 65. In contrast, Medicaid offers access to its healthcare program for people with low incomes and few resources.
Some individuals qualify for both programs making them dual-eligible.
For instance, a 65-year-old with a low income and little savings might receive Medicare at 65 and also receive help paying for out-of-pocket costs through Medicaid. According to the Public Policy & Aging Report, about 60% of people that were dual-eligible were over 65 years old.
While Medicare beneficiaries don’t have to pay premiums for Part A coverage they typically pay a monthly premium for Medicare Part B and D along with assuming responsibility for cost-sharing expenses, like deductibles or copays if they are in a Medicare Advantage or Supplement Plan
Medicaid recipients typically pay no or little to access healthcare coverage. Many states deliver Medicaid benefits through private insurers, but the beneficiaries generally don’t need to pay for them.
What Are Medicaid Coverage Options?
States work with the federal government to offer Medicaid, so the framework of this program can vary widely in various places. Often, states use private insurance companies to administer the healthcare program, though some states may offer recipients a choice of different insurers and plans.
These plans generally look very similar to HMOs, but they are referred to as MCOs, or managed care organizations. Thus, the programs control costs by requiring members to use a network of plan providers that agree to abide by a schedule of charges.
Does Medicare or Medicaid Cover Long-Term Care?
Medicaid represents the largest payer for long-term care services in the United States. According to a report from Congress, Medicaid pays about 42% of long-term care costs, and Medicare and other public programs pay about 26%. The rest of long-term care funding comes from private sources.
Medicare only covers long-term care in facilities under specific circumstances and for a limited time. Thus, many Medicare beneficiaries become dual-eligible Medicare and Medicaid recipients when they need long-term support services, don’t have enough income to cover the expense, and have exhausted most resources.
Does Medicare or Medicaid Pay First?
When Medicare beneficiaries also have other health insurance, the government has special rules about who pays first. The primary payer will pay bills first, and then the secondary payer will pay a portion of the remaining bill.
In the case of people who have Medicare and Medicaid, Medicare serves as the primary payer. Thus, Medicare will pay its share, and then Medicaid will usually pay the rest.
What Are Medicare Coverage Options?
Original Medicare consists of the hospital and medical insurance offered under Part A and Part B. Most Americans will get Medicare Part A for free. No matter where a beneficiary lives in the United States, they will typically pay a Part B premium and get medical insurance benefits.
People with higher incomes might pay more than the standard Part B premium. Individuals with low income may receive financial help through various programs on their premium which may also subsidize other out-of-pocket costs. In 2022, the standard Medicare Part B premium costs $170.10 a month. Most Americans have the cost automatically paid out of their Social Security check each month.
Other additional Medicare options include: Medicare Part D for prescription drugs, Medicare Supplement plans offering medical gap coverage, and Medicare Advantage Part C plans administered through private insurance companies.