When people talk about Medicare and Medicaid, they sometimes use the names interchangeably, which is incorrect. Applicants and recipients alike should understand the difference between these health insurance programs and what each offers in terms of medical coverage. One is health coverage for people aged 65 and over or those under 65 with specific medical conditions. The other is for people with low incomes. Here, we’ll explain Medicare vs. Medicaid, how they differ, and even when someone can qualify for both.
What is Medicare?
Medicare is a federally funded health insurance program anyone can sign up for when they turn 65. Other people who are younger than 65 but have certain medical conditions, like end-stage renal disease, can also qualify. Medicare has four parts — Parts A, B, C, and D — each covering different aspects of care, including hospital, medical, and prescription drug coverage.
What is Medicaid?
Medicaid is also a health insurance program, but this program is for people with low incomes, including people 65 and older, children, pregnant women, and others who need health insurance and have limited financial resources. This program is jointly funded by the state and federal governments. Every state operates its own Medicaid program based on federal government regulations.
Medicare vs. Medicaid: Differences in coverage
Let’s examine the main purposes of these programs. Medicare’s main qualifier is age: It provides health care coverage to people 65 and older. Income and assets do not factor into whether a person qualifies for Medicare. Medicaid’s main qualifier, on the other hand, is income: To qualify for Medicaid coverage, the applicant must have limited income and financial resources, regardless of age. Both programs aim to provide health care to vulnerable populations, with Medicare mainly covering older adults and Medicaid covering people with limited resources.
Each program covers different services. Here is a breakdown of the differences in coverage between Medicare and Medicaid.
Medicare coverage
Medicare is divided into four parts. Each part covers different services, but recipients are not required to enroll in every part. Here is what each part of Medicare covers for patients.
Part A
Medicare Part A is the part of original Medicare covering hospital care. It covers a recipient’s inpatient hospital stays, short-term skilled nursing stays, hospice care, and a limited amount of home health care. Most recipients do not pay a monthly premium for Part A.
Part B
Medicare Part B is also part of original Medicare. It covers medical care such as doctor visits, preventive care, and some home health care. Medicare Part B recipients pay a monthly premium for coverage that can change annually and vary based on income.
Part C
Medicare Part C is an alternative to original Medicare. It’s commonly referred to as Medicare Advantage (MA). Medicare Advantage plans are offered by private health insurance companies and cover the same services that fall under Part A and Part B. MA plans often add coverage for vision, hearing, and dental, which original Medicare does not cover.
Medicare recipients can choose either Parts A and B (original Medicare) or Part C (Medicare Advantage) since they both offer the same basic coverage.
Part D
Medicare Part D is prescription drug coverage, which helps cover the costs of prescription medications. Recipients can purchase Medicare Part D through private health insurance companies. These plans have a monthly premium that recipients must pay and that varies by plan.
Medicare and long-term care
Since Medicare is medical insurance, it typically does not cover long-term care that is not medical in nature, such as assisted living or nursing home care if the care needed is custodial. As mentioned above, Medicare does cover medically necessary short-term skilled nursing facility stays or time-limited home health care under some circumstances.
Medicaid coverage
Every state’s Medicaid program is different because each state runs its own program jointly with the federal government. Therefore, coverage can vary depending on the state. Further, some states offer additional benefits that extend beyond the federal minimum coverage requirements. Medicaid covers typical medical treatment services, like prescription drugs, hospital stays, doctor visits, nursing home care, prenatal and pregnancy services, and preventive services.
State Medicaid programs can also differ in how they support older adult participants. For example, some states allow assisted living facilities to accept Medicaid while others do not. In a state that allows for it, someone could move to an assisted living facility, and when they meet the financial qualifications for Medicaid, they can apply for it with the possibility of remaining a resident of the community, provided the community has availability and has agreed to do so. Some states also offer Medicaid waivers that allow older adults to receive care at home.
Though Medicaid is typically free, some states may charge premiums to individuals whose income is above a certain amount. To learn more about the Medicaid program in your state, it’s best to contact your local Medicaid office. You can inquire about the coverage the program offers, its eligibility requirements, and more.
Who is eligible for Medicare?
Medicare coverage is typically limited to seniors aged 65 and older. However, disabled Americans and patients with end-stage renal disease or Lou Gehrig’s disease (also known as ALS) may qualify for Medicare before they reach age 65.
Who is eligible for Medicaid?
Determining eligibility for Medicaid begins with a needs assessment analysis. Your ability to receive Medicaid coverage is based on income, family size, and the requirements set by the state where you live. Every state offers some Medicaid coverage to anyone who is part of a low-income family, elderly, disabled, a child, or pregnant. If you are a senior applying for long-term care coverage, you must also meet the clinical needs criteria.
The income requirements to qualify for Medicaid usually change at least a little every year. Income is calculated based on marital status and whether one or both spouses plan on applying for coverage if married. Income and asset requirements vary by state.
Can a person qualify for both Medicare and Medicaid?
Someone can qualify for both Medicare and Medicaid if they meet eligibility requirements for both programs. People who simultaneously qualify for Medicare and Medicaid are known as dually eligible. An individual can qualify for Medicare if they meet the age requirements. If their income and assets are low enough to qualify for Medicaid, they may also use those benefits.
Benefits and coverage
Since Medicare and Medicaid cover different medical treatments and services, dually eligible recipients may use Medicaid to supplement their insurance for services that Medicare does not cover. For example, a person who is old enough for Medicare but cannot afford prescription drug costs may be able to use Medicaid to cover their medication costs.
Medicare Savings Programs
Medicare Savings Programs are programs run by Medicaid that can help certain qualifying low-income individuals with Medicare costs such as premiums, copayments, coinsurance, and deductibles. These supplemental programs include the Qualifying Individual, Specified Low-Income Medicare Beneficiary, Qualified Medicare Beneficiary, and Qualified Disabled and Working Individual programs.
Medicare vs. Medicaid: When can I get coverage?
Individuals turning 65 can enroll in Medicare during a seven-month window called the initial enrollment period. This period begins three months before and ends three months after the individual’s birthday month. Medicare also has an open enrollment period each year when qualifying individuals apply for or change their coverage for the next year. Open enrollment for Medicare begins October 15 and ends December 7. There is no enrollment period for Medicaid. Applicants can apply for Medicaid at any point during the year.
