While most Americans have health insurance through private employer health plans, 135 million people receive their health insurance through either Medicare or Medicaid. Both programs are semi-public health insurance schemes that serve different, but sometimes overlapping, demographic groups. It is understandable that people might have questions about what is the difference between Medicare and Medicaid? We’re going to compare the two programs in this blog post.
What is the Difference Between Medicare and Medicaid?
Established in 1965, Medicare is a federal health insurance program designed to provide health insurance to older Americans who were mostly uninsured at the time. Since 1973, Medicare has also been available to Americans under the age of 65 with qualifying disabilities. All American seniors, regardless of income, qualify for Medicare when they reach the age of 65. About 64 million people receive healthcare through Medicare; approximately 54 million are seniors and 10 million are people who receive Social Security Disability Insurance (SSDI) benefits for a disability.
There are different ways to get your Medicare benefits:
1. Original Medicare (Part A hospital insurance and Part B medical insurance)
2. Original Medicare + Medicare Supplement plan + Part D prescription drug plan
3. Medicare Advantage plan (Part C)
Original Medicare alone does not cover prescription drugs, dental, hearing, or vision care. This is why most seniors either choose to add a Medicare Supplement plan and/or a Part D prescription drug plan or sign up for a Medicare Advantage plan that includes additional coverage. All plans come with some out-of-pocket expenses such as deductibles, coinsurance and copays.
Those who receive Social Security are automatically enrolled in Parts A and B, and the Part B premiums are deducted from their benefit checks. (Most Americans have paid Medicare taxes that cover their Part A premium).
What is Medicare required to cover?
All Medicare beneficiaries are entitled to the services covered by Medicare Parts A & B.
Medicare Part A is hospital insurance for inpatient hospital care, skilled nursing facility care, hospice care, lab tests, surgery, and home health care.
Medicare Part B is medical Insurance for doctor and other health care providers' services, outpatient care, some preventative services, home health care, and durable medical equipment.
Established in 1965, Medicaid is a free or low-cost health insurance program run jointly between state and federal governments for the purpose of providing healthcare to certain groups. The program was initially created to provide healthcare “to low-income children, pregnant women, parents of dependent children, the elderly, and individuals with disabilities.” Under the Affordable Care Act, the federal government began providing funding to state governments to expand the number of people eligible for Medicaid by adding “non-elderly adults with income up to 133% of the federal poverty level” to its list of qualifying people. This change took effect in 2014 and was reflected by an 8.8 percent increase in enrollment that year and an additional 7.2 percent increase in 2015. The pandemic, with the job losses that came with it, caused an increase in enrollment of 10.2 percent between February and September 2020. In 2021, almost 78 million people across all states, the District of Columbia, and US territories, were enrolled in the program.
What is Medicaid required to cover?
The federal government requires that states include at least the following services in their Medicaid plans:
Inpatient hospital services
Home health care
Nursing facility care for those over the age of 21
Family planning services
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) for beneficiaries under the age of 21
Services provided by Federally Qualified Health Centers (FQHC)
What is dual eligibility for Medicare and Medicaid?
There are 11 million Americans who are dually eligible for both Medicare and Medicaid. For example, seniors who are 65 years old and low-income may qualify for both Medicare and Medicaid. Another example is people who have qualifying disabilities who are both low-income and under the age of 65. If you believe that you may be dually eligible, please contact a local Medicare agent for help.
Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. Because we represent all the major Medicare Advantage and supplement plans in Hawaii, we are able to offer unbiased advice; all at no cost to our clients.
At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.