Medicare and Medicaid are both federal programs offering health coverage to qualifying individuals at low to no cost. But these two similarly-named programs often confuse people, especially if you find yourself eligible for both. Today we’re looking at the key differences between the two and what you should know about eligibility.
What is Medicare?
Medicare is a federally-run health insurance program for people aged 65 and over and some younger people with disabilities or certain diagnoses. This program is available to anyone who qualifies, regardless of income.
Medicare isn’t free, though most beneficiaries qualify for premium-free Part A coverage (hospital insurance) and will only pay a $148.50 premium for Part B (medical insurance). Beneficiaries also have the option of adding services like Advantage Plans (Part C), prescription drug plans (Part D) or Medigap policies. Keep in mind, though, that these often come with additional costs as well.
Original Medicare (Parts A and B) offers the same benefits across the country. Your premium costs and coverage won’t change from state to state. If you choose an Advantage Plan, your coverage may vary depending on where you live. That’s because these Plans are offered by private insurers who partner with the federal government.
What is Medicaid?
Medicaid is a joint state and federal program that offers assistance for health-related costs like insurance and medical bills. Unlike Medicare, Medicaid is available to anyone regardless of age. But Medicaid is specifically designed to serve those in the lowest income brackets. Federal Medicaid requirements are fairly broad, so states have a lot of flexibility in how they set up and administer the program.
Those who qualify for Medicaid usually don’t pay anything for covered services, but sometimes a small copay is required. Medicaid also oversees the Children’s Health insurance Program (CHIP). CHIP provides health coverage to eligible children under the age of 19.
Eligibility for Medicaid is based on the federal poverty level set each year by the U.S. Department of Health and Human Services (DHS). In 39 states, Medicaid coverage starts at 138% of the federal poverty level. In those states, any individual who earns under $17,774 annually (or $26,500 for a family of four) qualifies for Medicaid. Find out if you qualify here.
Medicaid covers most of the same services that Medicare provides, from hospitalization to routine care, but every state is different. Many Medicaid plans provide benefits like personal care assistance and long-term skilled nursing home care that Original Medicare doesn’t.
Which program is right for me?
If you don’t have coverage through an employer or through your spouse’s employer when you turn 65, you’re required to enroll in Medicare. But if you’re already on Medicare, you may have heard about “dual eligibility” or “Medi-Medi.” These terms are used to describe a situation where someone qualifies for both Medicaid and Medicare. If you do qualify, you should sign up for both.
In the case of dual eligibility, Medicaid acts as a secondary payer, increasing your coverage and reducing your out-of-pocket costs. So if you’re currently receiving Medicaid assistance and are turning 65, adding Medicare may cover your Part B premium.
Transitioning to a new healthcare provider, whether you’re coming from a private insurer to Medicare or adding Medicare to your existing Medicaid assistance, can be complicated. Reach out to one of our representatives to discuss your options and make sure you’re getting the most out of your coverage.
image credit: shutterstock/kenary820