Medicare and Medicaid sound similar in name but there are key differences between two that are important to understand. Both are governmental programs offering essential healthcare coverage to specific qualifying groups of people that need these benefits. In this blog post, we’ll discuss what these programs cover, their eligibility requirements, their similarities and differences and lastly, the circumstances that guide dual eligibility.
What Is Medicare?
Medicare is a program run by the federal government under the Center for Medicare and Medicaid Services (CMS), which is part of the U.S. Department of Health & Human Services. Medicare provides health insurance coverage to Americans age 65 and up as well as people of all ages with qualifying disabilities, Lou Gehrig’s disease (ALS) or End-Stage Renal Disease (ESRD). Once you become eligible, you can obtain your Medicare coverage either through the federal government or CMS-approved private insurance company healthcare plans. Original Medicare offered through the federal government consists of Part A and Part B, both of which are standardized and do not vary by state. Part A offers coverage for hospital and inpatient care, while Part B provides outpatient and medical coverage, including visits to your doctor and limited preventative health care. Private insurance companies approved by CMS offer plan options that serve as supplemental coverage or an alternative way to obtain your Medicare benefits. This includes Part C Medicare Advantage plans, Part D prescription drug plans and Medigap (Medicare Supplement) plans. These plans differ by region in costs, added benefits, network and formulary (list of covered drugs).
What is Medicaid?
Medicaid, on the other hand, is a public health insurance program funded by state governments and the federal government for individuals and families meeting low-income thresholds. The goal of Medicaid is to provide healthcare coverage to those who may otherwise be unable to afford or access it. Each state must follow federal guidelines for administering Medicaid, but the state is the party in charge of governing the program. There are some federal government mandated program benefits required for Medicaid recipients, but most benefits, eligibility requirements and application methods vary by state. Generally, those who qualify for Medicaid receive inpatient hospital care, outpatient hospital services, skilled nursing facility care, physician services, lab and xray services, family planning services, pediatric care and outpatient care from federally-approved clinics.
Important Distinctions Between Medicare and Medicaid
Let’s delve into some of the key differences between Medicare and Medicaid. First, the purpose of Medicare is to provide health insurance coverage to aging Americans and those with debilitating disabilities and terminal diseases. Medicaid, on the other hand, helps make health care affordable to those from low-income households. While both programs are designed to assist with medical expenses, the populations they serve are distinctly different. As already stated, Medicare is operated by the federal government, whereas Medicaid is operated independently by each state and the District of Columbia. It’s also important to know that each state’s Medicaid program will have a different name and will not be referred to as Medicaid.
It’s also important to talk about differences in enrollment between these two health programs. Enrollment in Medicare Parts A and B is often mandatory; however, there are exceptions to ensure eligible beneficiaries have necessary health coverage. In the vast majority of cases, people become eligible for Medicare when they turn age 65 and must manually enroll in the program on time or risk facing lifelong penalties. For Medicaid, eligibility varies by state, meaning individuals must first call or research online information about their state’s Medicaid program to determine if they qualify. Since enrollment for Medicaid is not standardized, people must check their state’s guidelines in order to enroll properly.
Medicaid is based on income and assets; therefore, costs can vary based on the individual’s levels of these two factors. Medicaid benefits will coincide and be offered accordingly. On the other hand, Medicare has costs associated with it, and for those not on Medicaid, they will be responsible for out-of-pocket expenses like premiums, copays and deductibles.
Dual Eligibility for Medicare and Medicaid
In some cases, individuals are dually eligible for these programs, meaning they meet specific qualifications for concurrent enrollment in both Medicare and Medicaid. For example, a beneficiary enrolled in Medicare Parts A and B could also meet the qualifications for receipt of Medicaid benefits. Dual eligibility is a unique situation that drives healthcare costs as low as possible for the eligible beneficiary. In cases such as these, applicable services and care will be covered by Medicare benefits first. Medicare is classified as the primary payer in this circumstance. If the services are not fully covered by Medicare, Medicaid (known as the secondary payer in this situation) will typically cover eligible costs. With dual enrollment in Medicare and Medicaid, it’s possible to have the majority of your health costs covered.
Medicare and Medicaid are both public healthcare coverage programs that help a significant number of people nationwide, which is why it’s important to understand their key provisions. Many people approaching age 65 will soon become eligible for Medicare, and have questions about the specific rules and guidelines. If you want to learn more about these programs, the regulations around Medicare enrollment, Medicare plan options and more, contact our trusted team at Medicare Portal today!