Medicaid and Medicare

When it comes to Medicare vs. Medicaid, it is important to know that both are healthcare programs that provide affordable health care to beneficiaries. The difference between Medicare and Medicaid is that Medicaid is a needs-based program.

To qualify for the program, individuals must meet a certain income level. They may also be eligible if they are pregnant women, have children or are disabled. Medicaid covers a minimum level of services, as required by the Federal government.

Medicare and Medicaid services also differ, in that Medicare is an age-based program. The program primarily serves individuals older than 65 years of age. Those younger than 65 years of age may qualify based on specific disabilities. Beneficiaries may be eligible for Medicare and Medicaid if they meet the criteria for both. When a person is Medicare and Medicaid dual eligible, both programs share the costs for covered services. For those asking, “What is the difference between Medicare and Medicaid?” continue reading the sections outlined below.

Medicare vs. Medicaid: What is Medicaid?

Medicare and Medicaid are similar programs that provide affordable health care to eligible families.  Both Medicare and Medicaid services are federally funded programs. Medicaid is a joint federal-state program that provides free or low-cost health care to eligible families.

Medicaid is a needs-based program. Therefore, beneficiaries must meet income requirements outlined by each state to qualify for the program. With Medicaid, families pay little-to-no out-of-pocket costs for care. The program provides basic a set of federally mandated services which include:

  • Physician services.
  • Inpatient hospital services.
  • Laboratory and X-ray services.
  • Family planning services.

In some states, regardless of the program, Medicare or Medicaid, beneficiaries have access to a broader range of services that would be financially too expensive for an individual to pay out of pocket. Examples of optional benefits include the following:

  • Prescription drugs
  • Prosthetics
  • Eyeglasses
  • Podiatry
  • Hospice

Medicare vs. Medicaid: What is Medicare?

The difference between Medicare and Medicaid is each has separate requirements for how individuals qualify, the services covered and the amount of out-of-pocket expenses each beneficiary pays. Medicare and Medicaid coverage plans are also different, in that Medicare is an insurance plan. With Medicare, health care costs are paid from trust funds, in which covered individuals have contributed. The amount of health care coverage depends on the amount each covered individual’s contribution to the plan.

When determining if an individual qualifies for Medicare or Medicaid, federal guidelines specify that Medicaid serves low-income families, while Medicare serves individuals over 65 years of age. The program also covers persons under 65 years of age if they have a qualifying disability. Unlike Medicaid, Medicare beneficiaries pay a portion of the costs for the healthcare in the form of monthly premiums, deductibles and co-pays.

Related Article: Affordable Care Act

Lastly, Medicare and Medicaid differ, in that individuals with Medicare can coordinate benefits with a private health insurance company. With this arrangement, one party, referred to as the primary payer, pays a portion of a beneficiary’s healthcare bill. The secondary payer makes the payment for the remaining part of the bill.

Medicaid & Medicaid Services Coverage

Regarding Medicare vs. Medicaid, both vary in the level of services available. While Medicaid offers a limited number of basic services, Medicare provides a broader range of covered services. The Medicare program is divided into four part: Medicare Part A, Medicare Part B, Medicare Part C and Medicare Part D:

  • Medicare Part A provides hospital services such as inpatient care, skilled nursing facility care, hospice and home health care.
  • Medicare Part B provides services such as ambulance services, mental health care and certain outpatient prescription drugs.
  • Medicare Part C provides beneficiaries with both Part A and Part B in one program administered through private insurance companies that are contracted with Medicare.
  • Medicare Part D offers prescription drug coverage.

For those still trying to understand Medicaid benefits and Medicare coverage plans, along with what each means, it is important to note that both programs are similar, in that certain medical expenses are not covered. In general, dental care, eye-exams, cosmetic surgery and acupuncture are not covered by either plan. Individuals may still get some of these services by one of two ways. First, for Medicaid beneficiaries, they must live in a state that offers the optional services. Medicare recipients may get the services if they have another insurance plan that pays for the services.

Can you have Medicare and Medicaid at the same time?

Beneficiaries can be Medicare and Medicaid dual eligible, provided they meet the criteria for each program. When a person has Medicare and Medicaid, both programs share the costs associated with a beneficiary’s care. In most circumstances, Medicaid is a last resort for payment. As such, Medicare pays for most services, while Medicaid pays the balance. In some cases, however, Medicaid may pay for a beneficiary’s Medicare premiums. Medicare Medicaid eligibility varies by state. In general, dual-eligible persons qualify for cost-sharing through one of four categories, which include:

Qualified Medicare Beneficiary (QMB) Program: With this program, Medicaid pays Part A and Part B premiums. Medicaid may also pay a beneficiary’s deductible, copayment and coinsurance. The rules to qualify for this “Medicare & Medicaid Services” program state that the individual’s income may not exceed 100 percent of the Federal Poverty Level (FPL)

Specified Low-Income Medicare Beneficiary (SLMB) Program: The SLMB program pays for Medicare Part B premiums. Individuals qualify if their income is more than 100 percent of the FPL, but not more than 120 percent of the FPL. Individuals must be enrolled in Medicare Part A to qualify for this program.

Qualifying Individual (QI) Program: To receive Medicare and Medicaid benefits through this program, beneficiaries in this program must have an income of at least 120 percent of the FPL, but not more than 135 percent of FPL. Under this program, Medicaid pays the beneficiary’s Part B premiums. Recipients must be enrolled in Medicare Part A to qualify for this program.

Qualified Disabled Working Individual (QDWI) Program: This program applies to Medicaid Part A premiums for beneficiaries whose income is up to 200 percent of the FPL. Also, their resources must be more than two times the Social Security Income (SSI) resource limit.

Related Article: Health Care Resources

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