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Medicare vs. Medicaid

Medicare vs. Medicaid
Medicare is generally for people who are older or disabled, whereas Medicaid is a state-administered program for low-income and disabled U.S. citizens and legal aliens. Although many of the coverage details are determined by individual states, each state must provide certain services, such as specific hospital and doctor services.

It’s possible to be eligible for both Medicare and Medicaid. If you think you might qualify, you need to fill out a Medicaid application. If you do qualify, Medicaid can help pay for your Medicare premiums, deductibles, and/or coinsurance. Outlined here are further differences between Medicaid and Medicare.

Medicare basics
Medicare is a federally funded program available to most U.S. citizens and permanent legal residents who have lived continuously in the country for five years or more and are age 65 or older.

People younger than 65 may also be eligible for Medicare if they:

  • Have received at least 24 months of Social Security disability benefits or a disability pension from the Railroad Retirement Board (RRB).
  • Have permanent kidney failure and need routine dialysis or a kidney transplant.
  • Have amyotrophic lateral sclerosis (Lou Gehrig’s disease).

To qualify for premium-free Medicare Part A, you or your spouse need to have worked at least 10 years and paid Medicare payroll taxes while working. Medicare Part B has a premium that most people pay. To cover additional costs or provide more health-care services, you may enroll into a Medicare Prescription Drug Plan (Part D) or a Medicare Advantage plan (Part C). Medicare Advantage plans and Medicare Prescription Drug Plans are offered by private Medicare-approved insurance companies, and costs, coverage details, and availability may vary among plans.

Medicaid basics
Medicaid is jointly funded at the state and federal levels. Medicaid supports low-income individuals and families by covering costs associated with both medical and long-term custodial care for those who qualify. Some of the benefits covered under Medicaid overlap with Medicare, such as inpatient and outpatient hospital care and doctor services. However, depending on the state, Medicaid may also offer coverage that is not included under Original Medicare, such as personal care, optometry services, and dental services. Also, the service providers (such as hospitals and doctors) available to people using Medicaid are often different than those available to people using Medicare.

Eligibility for Medicaid is means-based, and the program has strict income eligibility requirements that vary from state to state. The Affordable Care Act expanded Medicaid eligibility levels in some states beginning on January 1, 2014. For more information on current qualification requirements, individuals should call their State Medical Assistance (Medicaid) office or visit Medicaid.gov.

Outlined below are further differences between Medicaid and Medicare

Medicare
Medicaid
What is it?
A federal health insurance program for people who are:
  • 65 or older
  • Under 65 with certain disabilities
  • Of any age and have End Stage Renal Disease or ALS

What is it?
A joint federal and state program that helps pay health care costs for certain people and families with limited income and resources. Different programs under the Medicaid umbrella are designed to help specific populations. 

Who governs it?
Federal government 
Who governs it?
State governments
What does it cover?
Depends on the coverage you choose and may include:
  • Care and services received as an inpatient in a hospital or skilled nursing facility (Part A)
  • Doctor visits, care and services received as an outpatient, and some preventive care (Part B)
  • Prescription drugs (Part D)

Note: Medicare Advantage plans (Part C) combine Part A and Part B coverage, and often include drug coverage (Part D) as well – all in one plan.

What does it cover?
Each state creates its own Medicaid programs, following federal guidelines. There are mandatory benefits and optional benefits. Mandatory benefits include, in part:
  • Care and services received in a hospital or skilled nursing facility
  • Care and services received in a federally-qualified health center, rural health clinic or freestanding birth center (licensed or recognized by your state)
  • Doctor, nurse midwife, and certified pediatric and family nurse practitioner services
  • And more
What does it cost?
It depends on the coverage you choose. Costs may include premiums, deductibles, copays and coinsurance.
 
 
What does it cost?
It depends on your income and the rules in your state. Costs may include premiums, deductibles, copays and coinsurance. Certain groups are exempt from most out-of-pocket costs.
How do I get it?
Many people are enrolled in Parts A and B automatically when they turn 65. You can also contact your local Social Security office to see if you are eligible.
How do I get it?
Eligibility depends on the rules in your state. Call your State Medical Assistance (Medicaid) office to see if you qualify.