In the United States there are programs that have been designed to help cover the costs of medical care for American citizens. Let’s see next what is the difference between Medicaid and Medicare.
The two programs were established in 1965 and their names, being very similar, tend to generate confusion. In addition, many people have doubts about how they work and the coverage they offer.
- 1 What is the difference between Medicaid and Medicare: KEY FACTS
- 2 What is Medicaid?
- 3 What is Medicare?
- 4 What is the difference between Medicaid and Medicare?
- 5 Difference between Medicaid and Medicare: CARES Act of 2020
What is the difference between Medicaid and Medicare: KEY FACTS
- Medicare is the main provider of health coverage for many people age 65 and older and those with a disability. Eligibility for Medicare has nothing to do with income level.
- Medicaid is designed for people with limited incomes and is often a program of last resort for those who cannot afford their medical costs.
- Medicare Part A provides hospitalization coverage to people age 65 and older, regardless of income.
- Medicare Part B covers medically necessary services and equipment, including doctor’s office visits, lab tests, X-rays, wheelchairs, walkers, and outpatient surgeries.
Keep reading: What to do if your doctor does not accept Medicare?
What is Medicaid?
Medicaid is an assistance program. Serves low-income people of all ages. Patients typically do not pay any portion of covered medical expenses. Sometimes a small copay is required. Medicaid is a federal-state program. Varies from state to state. It is administered by state and local governments within federal guidelines.
What is Medicare?
Medicare is an insurance program. Medical bills are paid from trust funds to which the beneficiaries have contributed. Primarily serves people age 65 and older, regardless of income; and serves younger disabled people and dialysis patients. Patients pay part of the costs through hospital deductibles and other costs. Small monthly premiums are required for non-hospital coverage. Medicare is a federal program. It is basically the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government.
What is the difference between Medicaid and Medicare?
Medicare helps provide health care coverage to US citizens 65 years of age and older, as well as people with certain disabilities. The four-part program includes:
Part A: Hospitalization Coverage
This Medicare module offers hospitalization coverage to people over 65 years of age, regardless of their income. To qualify, you or your spouse must have worked and paid Medicare taxes for at least 10 years. Most people don’t pay a premium for Part A, so deductibles and coinsurance.
Part B: Medical Insurance
Those entitled to Medicare Part A are also entitled to Part B, which covers necessary medical services and equipment. This includes office visits, lab tests, X-rays, wheelchairs, walkers, and outpatient surgeries, as well as preventive services (sickness screenings and flu shots).
For 2020, the standard Part B premium is $144.60 (usually deducted from Social Security or Railroad Retirement payments). Deductibles and coinsurance apply. People who earn more than $87,000 per year ($174,000 for a couple) are required to pay more for this program.
People are not required to sign up for Part B as soon as they are eligible if they are still covered by their employer’s insurance. However, keep in mind that it may be more expensive to join later due to a late enrollment penalty.
Part C: Supplemental Insurance
Individuals who are eligible for Medicare Part A and Part B are also eligible for Part C, which is known as Medicare Advantage. Medicare Part C plans are offered by private companies approved by Medicare.
In addition to providing the coverage offered by Parts A and B, Part C offers vision, hearing, and dental coverage. It works much like health maintenance organizations (HMOs) and preferred provider organizations (PPOs), through which many people receive medical services during their working years.
Enrolling in Part C can lower the costs of buying services separately. Individuals should carefully assess their medical needs because Part C participants generally pay out-of-pocket for associated services.
Medicare supplement insurance, known as Medigap, can be purchased to help cover expenses like copays and coinsurance or deductibles that aren’t covered by Parts A and B. However, doctors who don’t accept Medicare also don’t accept Medigap.
Keep reading: How to request a replacement Medicare card?
Part D: Prescription Drug Coverage
Medicare Part D provides prescription drug coverage. Participants pay out of pocket in addition to Part D plans, some monthly premiums, the annual deductible, and copays for certain prescriptions. Those enrolled in Medicare Part C are normally eligible for Part D.
The annual Medicare open enrollment period runs from October 15 to December 7 for 2020.
|Summary of Medicare Costs|
|Part A Premium||Most people don’t pay a monthly premium for Part A (sometimes called “premium-free Part A”). When you buy Part A, you’ll pay up to $458 each month. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $458. If you paid Medicare taxes for 30 to 39 quarters, the standard Part A premium is $252.|
|Part A inpatient hospital deductible and coinsurance|| You pay:
– $1,408 deductible for each benefit period
– Days 1-60: $0 coinsurance for each benefit period
– Days 61-90: $352 coinsurance per day each benefit period
– Day 91 and beyond: $704 coinsurance for each “lifetime reserve day” after day 90 for each benefit period (up to 60 days during your lifetime)
– Beyond lifetime reserve days: all costs
|Part B Premium||The standard Part B premium amount is $144.60 (or more, based on your income).|
|Part B deductible and coinsurance||$198 per year. Once your deductible is met, you generally pay 20% of the Medicare-approved amount for most physician services (including most services while you’re an inpatient), outpatient therapy, and durable medical equipment (DME).|
|Part C Premium||The monthly Part C premium varies by plan.
Compare the costs of specific Part C plans
|Part D Premium||The cousin Part D monthly fee varies by plan (higher-income consumers may pay more).
Compare the costs of specific Part D plans
Medicaid is a joint federal and state program that helps low-income Americans of all ages pay costs associated with long-term custodial and medical care. Children who need low-cost care but whose families earn too much to qualify for Medicaid are covered by the Children’s Health Insurance Program (CHIP), which has its own set of rules and requirements.
Keep reading: Health insurance for children in the United States
Medicaid Eligibility and Costs
The federal/state partnership currently offers 50 different Medicaid programs, one for each state. Through the Affordable Care Act, President Barack Obama attempted to expand health care coverage. This plan was intended to serve more Americans by having the federal government cover most of the cost of Medicaid. This for people with an income level below 133% of the federal poverty level.
A report of Healthcare.gov It said, “Because of the way it’s calculated, it actually works out to be 138% of the federal poverty level. Some states use a different income limit.” Although 33 states have opted into the program, political efforts to reduce coverage continue.
Those covered by Medicaid pay nothing for the services included in the program. Unlike Medicare, which is available to nearly all Americans age 65 and older, Medicaid has strict eligibility requirements that vary by state.
However, because the program is designed to help those most in need, many states require Medicaid recipients to have no more than a few thousand dollars in liquid assets in order to participate. There are also income restrictions. For a breakdown of eligibility requirements by state, visit Medicaid.gov Y BenefitsCheckUp.org.
When Medicaid recipients turn 65, they are still eligible for Medicaid and may also be eligible for Medicare. At that moment, Medicaid coverage may change, based on beneficiary income. People with higher incomes may find that Medicaid pays for their Medicare Part B premiums. People with lower incomes can continue to receive full benefits.
Keep reading: Medicaid Income Chart
Medicaid benefits vary by state, but the federal government mandates coverage for a variety of services, including:
- laboratory services
- Medical services
- Family planning
- nursing services
- Nursing facility services
- Home health care for those eligible to be cared for in a nursing facility
- Treatment in the clinic
- Pediatric and family nursing services
- delivery services
Each state also has the option to include additional benefits, such as prescription drug coverage, optometric services, eyeglasses, medical transportation, physical therapy, prosthetics, and dental services.
Medicaid is also often used to fund long-term care, which is not covered by Medicare. nor by most private health insurance policies. In fact, Medicaid is the nation’s largest long-term care funder, often covering the cost of nursing facilities for those who exhaust their savings paying for medical care and have no other means of affording nursing care.
Keep reading: Medicaid and free transportation: Everything you need to know
Difference between Medicaid and Medicare: CARES Act of 2020
On March 27, 2020, President Trump signed a $2 trillion emergency coronavirus stimulus package, called the CARES Act (Coronavirus Aid, Relief, and Economic Security). This law expands the ability of Medicare to cover treatment and services for those affected by COVID-19. The CARES Act also:
- Increases the flexibility of Medicare to cover telehealth services.
- Authorizes Medicare certification for home health services by physician assistants, nurse practitioners, and certified nurse specialists.
- Increases Medicare payments for hospital stays related to COVID-19 and durable medical equipment.
As for Medicaid, the CARES Act clarifies that states, without expansion, can use the Medicaid program to cover COVID-19-related services for uninsured adults who would have qualified for Medicaid if the state had decided expand. Other populations with limited Medicaid coverage may also be eligible for coverage under this state option.