Medicare and Medicaid are government-funded programs that provide health care to millions of United States citizens. However, they provide different types of coverage. Medicare is mainly for people 65 and older and those with certain health conditions, while Medicaid is for low-income individuals.
Understanding the difference between these two programs is important for consumers looking for affordable health care coverage. Continue reading to learn more about these programs and their coverage.
What is Medicare?
Medicare is a national health insurance program in the United States, begun in 1966 under the Social Security Administration (SSA). It primarily provides health insurance coverage to people 65 and older, as well as those with certain disabilities or end-stage renal disease.
Coverage includes hospital care, doctor visits, prescription drugs, and preventive care. Medicare has different parts that cover these different services:
- Part A covers in-patient hospital, skilled nursing facility, or hospice care
- Part B covers outpatient medical services such as doctor visits or tests
- Part C plans combine Part A, Part B, and sometimes Part D
- Part D covers prescription drugs and can be added to Medicare Part A and B
Original Medicare, sometimes called Traditional Medicare, consists of Medicare Parts A and B. Alternatively, you can opt to receive Medicare benefits from a Medicare Part C Advantage plan.
Private insurance companies provide advantage plans and offer at least equal coverage to Original Medicare. In addition, these plans often include Part D, plus other wellness benefits like vision cover and gym membership.
What does Medicare cover?
Whether you choose Original Medicare or an Advantage plan, you'll still have to pay towards your medical costs with deductibles, coinsurance, and co-payments.
Here's what Original Medicare covers:
- Hospital stays (under Part A): During the first 60 days of in-patient stay, you'll only pay the deductible, which is currently $1,556. You'll also pay coinsurance amounts if you stay longer.
- Outpatient services (under Part B): After paying monthly premiums and an annual deductible ($233 in 2022), you'll also need to cover a 20% coinsurance for outpatient services.
The costs and rules with Medicare Advantage plans differ by provider, and some plans don't have a deductible. But, when you receive care, you'll typically cover a copay, for example, $20 for a doctor's visit. Likewise, for Part D plans, there will be a copay for your prescription.
How to enroll in Medicare?
If you receive Social Security (SS) or Railroad Retirement Board (RRB) benefits, you'll automatically be enrolled in Original Medicare Part A and B when you turn 65. You'll receive your red, white, and blue Medicare card in the mail about 3 months before your 65th birthday.
If you're not receiving benefits, you can join Medicare by visiting your local Social Security office. Enrollment opens 3 months before turning 65 or once you qualify through disability. You then have a 7-month enrollment window.
People younger than 65 may be eligible for Medicare benefits if any of the following are true:
- You've received SS disability benefits for at least 24 months
- You receive a disability pension from the RRB and meet certain conditions
- You have amyotrophic lateral sclerosis (ALS)
- You have permanent kidney failure requiring regular dialysis or a kidney transplant
If you think you might be eligible for Medicare, visit the SSA website or contact your local Social Security office to learn more.
What is Medicaid?
Medicaid is a government-sponsored health insurance program that provides health insurance coverage to low-income individuals, families, and children. In some states, it also covers people with disabilities and pregnant people.
The program is administered by states within federal guidelines, meaning that each state has some flexibility in how they run their Medicaid program, but they must follow the basic guidelines set by the federal government.
Eligibility for Medicaid is based on income level. The federal government sets minimum income levels for eligibility, but states can raise them if they choose to do so. In most states, adults without minor children are not eligible for Medicaid unless they are disabled.
Medicaid aims to improve the health of people who might otherwise go without medical care for themselves and their children. Like Medicare, it covers many services, including hospital stays, doctor visits, prescription drugs, and preventive care.
The Medicaid program has been expanding in recent years due to the Affordable Care Act (ACA). The ACA expanded eligibility for Medicaid to include more people surviving on incomes of 138% of the Federal Poverty Level. As a result, nearly 89 million people have gained coverage through the Medicaid and Children's Health Insurance Programs (CHIP). CHIP is a healthcare program for children without health insurance whose families are ineligible for Medicaid.
How to enroll in Medicaid?
Each state determines eligibility for Medicaid, and you must be a resident of the state to enroll. You can apply for Medicaid through your state's Medicaid office or, in some states, through the Health Insurance Marketplace.
In general, you may be eligible for Medicaid if you have low income or limited resources and are:
- Responsible for a child 18 years or younger
- Have a disability
- Have a member of your household with a disability
- Age 65 years of age or older
If you're ineligible for Medicaid, you may still be able to get coverage through the Health Insurance Marketplace. You may be able to make income-based savings through premium tax credits or by savings on out-of-pocket costs. Many people find plans for $75 or less per month.
Medicare and Medicaid are two governmental health insurance programs with different purposes.
Medicare is primarily designed for people 65 or older, while Medicaid is a state-specific program that provides insurance coverage to low-income individuals and families.
Both programs cover various services, including hospital stays, doctor visits, prescription drugs, and preventive care.
If you think you may qualify for Medicare, contact the Social Security Administration. For Medicaid, apply through your state's Medicaid office or, in some states, through the Health Insurance Marketplace.
Medicare and Medicaid are government healthcare programs.
Medicare is primarily designed for people 65 or older or younger with certain disabilities or health conditions.
Medicaid is a state-specific program that provides health insurance coverage to low-income individuals and families.
Medicare. What’s Medicare?
Centers for Medicare and Medicaid Services. 2022 Medicare Parts A & B Premiums and Deductibles/2022 Medicare Part D Income-Related Monthly Adjustment Amounts.
Healthcare.gov. Medicaid & CHIP coverage.