Though people are aware that there are two government-run health-care programs available, the terms “Medicaid” and “Medicare” are often confused or used interchangeably. The two terms sound extremely similar, making it easy to switch them, but these two programs are very different. Each is regulated by its own set of laws and policies, and each is appropriate for different sets of people. It is important to understand the distinction between these programs as well as the details of each so that each person can select the program that is right for his or her situation.
For retirees navigating the government’s senior health care system for the first time, it can seem confusing. Let’s take a look at the two big health insurance providers: Medicare and Medicaid. Americans aged 65 or older are eligible for Medicare. There are two main plans under Medicare, Plan A and Plan B. Typically, Plan A covers hospital insurance and Plan B covers medical insurance (i.e. doctor visits). Plan B may come with a small monthly fee. Medicaid is for citizens not qualified to receive Medicare. Unlike Medicare, Medicaid is distributed through federal-state programs for citizens of low-income. Medicaid can be extended not only to cover the elderly, but it may also cover children, parents of eligible children, pregnant women, and people with disabilities who cannot otherwise afford insurance.
Overview
Medicare is a policy designed for citizens aged 65 and older who have difficulty covering the expenses related to medical care and treatments. This program provides support to senior citizens and their families who need financial assistance in order to fulfill the costs of their medical needs. Persons who are under the age of 65 but are suffering from particular disabilities may also be eligible for Medicare benefits. Each case is evaluated based on eligibility requirements and the details of the program. Patients in the final stage of renal disorders can also apply for the benefits of a Medicare policy.
Medicaid, on the other hand, is a program that combines the efforts of the state and federal governments in order to assist families in low-income groups to cover the expenses of health care. This program aids families in paying for major hospitalizations and treatments as well as routine medical care. This program was designed to help those unable to afford quality medical care and who do not have other forms of medical coverage due to strained finances.
Eligibility
In most situations, eligibility for Medicare is based on the age of the applicant. A person must be a citizen of the United States and 65 years of age or older to qualify. Any US citizen or permanent resident that is at least 65 years old is eligible to apply for Medicare. Premiums and specific Medicare plan eligibility will depend on how many years of Medicare taxes have been paid. The exception to this is people who are younger than 65 but have certain documented disabilities. Generally, people who receive Medicare benefits are also receiving some form of Social Security benefits. Medicare benefits can also be extended to a person who is eligible for the Social Security disability program and is also the widow(er) age 50 or older or the child of a person who worked a minimum length of time at a government job and paid Medicare taxes.
Eligibility for Medicaid is based primarily on income. Healthcare.gov states that most adults who are in the low-income group who are not able to access affordable health insurance through their job are ineligible for Medicaid. The Affordable Care Act, however, has extended coverage to fill in the health-care gaps for those with the lowest incomes, establishing a minimum income threshold that is constant across the country.
For the majority of adults under the age of 65, eligibility is an income lower than 133 percent of the FPL (Federal Poverty Level). According to Healthcare.gov, this amount is approximately $14,500 for an individual and $29,700 for a family of four. Children are afforded higher income levels for Medicaid and CHIP (Children’s Health Insurance Program) based on the individual standards of their state of residence. There are also special programs within the Medicaid program that extend coverage to groups in need of immediate assistance, such as pregnant women and those with pressing medical needs.
Coverage
There are several subcategories of the Medicare program that offer coverage for different aspects of health care. Medicare Part A, also referred to as hospital insurance, is the subcategory that is offered without premiums to all individuals who meet the eligibility requirements and have paid (or are the spouse of a person who has paid) Medicare taxes for a minimum of 40 calendar quarters in the span of their life. Those who do not reach eligibility to receive Part A premium-free may have the option of purchasing this part. Part A is associated with skilled nursing care, hospital services, hospice services, and home health care. Medicare Part B is considered the medical insurance portion. It offers coverage for outpatient hospital care, physician services, and other such services traditionally covered by health insurance plans.
The benefits that are covered by Medicaid vary by the issuing state, but there are some benefits that are included in every program. These include laboratory and X-ray services, inpatient and outpatient hospital services, family planning services such as birth control, nurse-midwife services, health screenings for children and applicable medical treatments, nursing facility services for adults, and surgical dental services for adults.
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