Medicare vs. Medicaid
Most people have heard of Medicare and Medicaid, but beyond knowing that they are both government-run insurance programs, you might not know the difference between them. While they may seem similar, they are, in fact, quite different. Medicaid is a federal program geared toward low-income, financially needy people, set up by the federal government that is administered differently in each state. (It’s also known as Medi-Cal in California.)
Medicare, on the other hand, was created in order to deal with high medical costs faced by older people relative to the rest of the population—which is especially troubling given their reduced ability to earn money. Although, eligibility for Medicare is not based on individual need. Instead, it’s an entitlement program; you’re entitled to it because either you or your spouse paid for it through taxes by Social Security.
While you may qualify for both Medicare and Medicaid coverage, both have separate requirements you have to meet for each program. In other words, being eligible for one does not automatically mean you’re eligible for the other. If you do qualify for both, Medicaid will normally pay for most Medicare Part A and B premiums, deductibles, and copayments.
Now, let’s look at some of the differences and basics for each program.
- Who is Eligible: Medicare covers nearly everyone aged 65 or over, certain people on Social Security disability, and some people with permanent kidney failure.
- Who Administers the Program: Medicare is a federal program, and the rules are the same across the country. Information is available at your Social Security office
- Coverage Provided: Medicare hospital insurance (Part A) provides most basic coverage for hospital stays as well as post-hospital nursing facility and home health care. Medicare medical insurance (Part B) generally pays for most doctor and laboratory costs, as well as some outpatient medical services, including medical equipment and supplies, home health care, and physical therapy. Medicare Part D (prescription drug coverage) includes some of the costs of prescription medications
- Cost to Consumer: You have to pay a yearly deductible for both Medicare Parts A and B, and make large copayments for extended hospital stays. With Part B, you have to pay the 20% of bills not covered by Medicare, and up to 15% at times. Part B also has a monthly premium too. And under Part D, you have to pay a monthly premium, a deductible, copayments and all of your prescription drug costs over a certain yearly amount and up to a ceiling amount, unless you qualify for a low-income subsidy.
- Who is Eligible: Medicaid covers low-income persons and those who are financially needy, including those over age 65 who are also on Medicare
- Who Administers the Program: Medicaid is administered in all 50 states, and the rules differ by state. Information is available in your local county social services, welfare, or department of human services office.
- Coverage Provided: Medicaid gives comprehensive inpatient and outpatient health care coverage, that includes many services and costs not otherwise covered by Medicare—things like prescription drugs, diagnostic and preventative care, and eyeglasses. Although the amount of coverage also varies state to state. They can also pay Medicare deductibles and 20% of charges not paid by Medicare, as well as the Medicare premium.
- Costs to Consumer: In some states, Medicaid charges consumers some small amounts for providing certain services.