Medicare and Medicaid are government health programs that provide health care access for different groups of Americans. Generally, services covered by Medicare and Medicaid are free or low cost. Discover the key differences between Medicare and Medicaid below.
Understanding Medicare Basics
Medicare is a federal program that provides health care to Americans ages 65 and older. A federal trust fund pays for it, and the funding comes from taxpayers. Once you join Medicare, you can remain on the program for life. Age primarily determines eligibility for Medicare.
As a national insurance program, Medicare offers coverage nationwide, and benefits are standard. No matter where a Medicare recipient goes in America, they can receive coverage for the same health care services in any state.
Like other health insurance programs, Medicare requires deductibles, copayments, and coinsurance fees, and patients may need to pay out-of-pocket expenses for certain services.
Medicare is divided into Parts A, B, C, and D. Each covers different services, and some parts can be bundled with others.
What is Original Medicare (Parts A and B)?
Original Medicare is provided directly by the federal government. Part A is hospital insurance. It pays for inpatient hospital stays and for a certain number of days at skilled nursing facilities after the patient is discharged. Part A covers some types of hospice care.
Part B is medical insurance. It provides coverage for doctor’s appointments, preventive and outpatient care, and home health care. It will also pay for certain types of medical equipment, including mobility aids.
While most Americans receive Part A for free, they must pay monthly premiums for Part B. Premiums are based on guidance set out in the Affordable Care Act.
What is Medicare Part C (Medicare Advantage)?
Unlike Original Medicare, Part C (Medicare Advantage) is provided by private insurance companies authorized by the federal government. It is an alternative to Original Medicare. If you have Original Medicare, you cannot enroll in Part C (Medicare Advantage).
Medicare Advantage plans cover everything included with Original Medicare, and most Advantage plans also provide coverage for extra services. Medicare Advantage members can receive coverage for dental, vision, and hearing care, and gym memberships may be provided with specific Advantage plans. Many Advantage plans include prescription drug coverage, and the drug formulary determines coverage for the user’s specific plan.
While Original Medicare coverage is standardized, Medicare Advantage coverage varies. Coverage depends on the specific plan that an Advantage member selects. You have at least 30 different Advantage plans to choose from in most areas, and some areas have more than 70 plans. Advantage members can switch to different Advantage plans at certain times during the year. Monthly premiums differ by plan.
What is Medicare Part D?
Medicare Part D is prescription drug coverage, and it requires monthly premiums. Like Medicare Advantage, Part D plans are provided by private insurance companies. People who receive Original Medicare will need to purchase a separate Part D plan for prescription drug coverage. Medicare Advantage recipients can get prescription drug coverage bundled with their Advantage plans.
If you take Social Security benefits before the age of 65, you’ll be automatically enrolled in Original Medicare when you turn 65. If you don’t want to enroll in Original Medicare, you can sign up for a different plan online.
If you haven’t taken Social Security at 65, you’ll need to sign up for Medicare on your own. You can sign up during your Initial Enrollment Period, which begins three months before the month of your 65th birthday. Your Initial Enrollment Period will end three months after your birthday month.
You can enroll at the Medicare website. Get in-person help with your application by making an appointment at your local Centers for Medicare and Medicaid Services office. You’ll need your Social Security card and proof of age when you apply.
Key Facts About Medicaid
Medicaid is a federal program that provides health coverage to low-income adults, pregnant women, and people with disabilities. Children and the elderly may be eligible for Medicaid if they meet certain state and federal requirements.
It is possible to be dual eligible for Medicare and Medicaid under certain circumstances, and you can have both simultaneously. In September 2021, more than 77.9 million people in the United States had coverage under Medicaid.
Am I Eligible for Medicaid?
Unlike Medicare, individual states administer Medicaid, setting their own eligibility requirements and coverage options. In most cases, income level is the primary factor determining eligibility, and each state sets its income limits for eligibility. Generally, your income level must be below the federal poverty level to qualify for Medicaid.
The federal poverty level is different in each state. For example, in Arizona, a single person can make no more than $18,075 per year to be eligible for Medicaid. In Montana, a single individual will be eligible for Medicaid if they make $13,590 annually.
While income is the main criterion for Medicaid eligibility, some states, including North Carolina, have opted out of Medicaid expansion. In these states, lower-income, healthy individuals cannot receive Medicaid coverage unless they are single parents.
What Does Medicaid Cover?
The federal government mandates Medicaid coverage for certain health care services, and other health care services are designated as optional. States can decide whether or not to include optional services in their Medicaid plans.
Mandatory Medicaid benefits include inpatient and outpatient hospital care, doctor’s visits, lab tests, X-rays, rural health clinic services, and care from nurse practitioners and nurse-midwives. Transportation to medical care is covered, and home health services are required. In addition, the federal government mandates coverage for tobacco cessation programs for pregnant women.
Prescription drugs, respiratory care, physical therapy, dental care, optometry, eyeglasses, and prosthetics are optional services that states may elect to cover or exclude.
How Can I Enroll in Medicaid?
To enroll in Medicaid, you’ll need to visit your state’s Medicaid enrollment portal online. You can also complete your application by making an appointment at your local Medicaid office. You’ll need to bring your birth certificate or driver’s license to show proof of age, and you should bring your passport as proof of U.S. citizenship. Also, make sure to bring copies of your tax returns, income stubs, and bank statements to prove that you meet the income eligibility requirements.
Generally, you’ll receive a response to your application within 45 days. If your application isn’t approved, you can file an appeal.
If your Medicaid application is successful, you’ll need to file annual renewal applications to remain in the program. You’ll need to provide proof of income for each renewal.
Get Assistance With Medicare and Medicaid
If you need help with applying for Medicare or Medicaid, visit Finance is us. We can help you understand more about your eligibility and how to navigate the application process. We’ll help you find coverage that fits your budget, lifestyle, and health care needs.
Disclaimer: All content on this site is information of a general nature and does not address the circumstances of any particular entity or individual, nor is the information a substitute for professional financial advice and services.