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Difference Between Medicaid and Medicare
If you have found yourself asking, “What is the difference between Medicare and Medicaid?” you are far from alone. Both health insurance programs are managed by the government, so it can be easy to get the two confused. However, one is an assistance program, and one is a health insurance program. Learn more about each program to see how they are different.
What Is Medicare?
To answer the question, “What is the difference between Medicare and Medicaid?” you must first learn what each one is. Medicare is a health insurance program run by the federal government. This program is available to people once they reach the age of 65, although people can become eligible earlier if they have certain illnesses.
The Original Medicare consists of Medicare Part A and Medicare Part B. Part A covers hospital care, while Medicare Part B is your health insurance. It covers doctors’ appointments and other health-related needs.
You likely will not have to pay a premium for Medicare Part A. However, you will have to pay a deductible. In 2019, the deductible for hospital stays per benefit period was $1,364.
You will also be responsible for coinsurance. For example, if you stay in a skilled nursing facility, you won’t pay for the first 20 days of the stay during the benefit period. However, Medicare only covers a portion of the costs for days 21-100. You will have to pay $170.50 each day. Then you will pay for all the costs after day 100.
You will need to pay a premium for Medicare Part B. The average premium in 2019 was $135.50 a month, although some people paid less or more depending on their incomes.
You can also add Medicare Part D to the Original Medicare. This is your prescription drug coverage. Private insurance companies offer Medicare Part D, and it is not bundled with the Original Medicare. Instead, it is a standalone policy that you will use when you go to the pharmacy. You will pay a separate premium for Medicare Part D.
If you want additional coverage, you can get a Medicare Advantage plan. These plans include the Original Medicare as well as additional benefits. Many of the plans have Medicare Part D and might include other extras as well. Instead of working as individual policies, Medicare Advantage plans are bundled.
What Is Medicaid?
Medicaid is an assistance program that is run by the federal and state governments. To be eligible for Medicaid, you need to meet certain requirements. The government looks at your income, family status, household size, disability (if applicable), and other factors. Most people are eligible as long as the household income is below 100 percent of the federal poverty level, although it is possible to make more money and still qualify. For instance, people who are pregnant or disabled can earn more money and still get Medicaid.
Many states expanded Medicaid coverage to make more people eligible. States with expanded coverage offer Medicaid to households with an income that is below 133 percent of the federal poverty level. This has made more people eligible for Medicaid than ever before.
The federal government mandates the benefits that states must provide with Medicare. These benefits include inpatient hospital services, outpatient care, nursing facility services, home health services, and more. Some states also include additional benefits, such as prescription drugs. Those who are not eligible for prescription drug coverage with Medicaid might still be eligible for Medicare Part D. Medicaid often pays for this benefit.
Medicaid plans are available in two forms. Some states use managed care plans while others use fee-for-service plans. States choose the plans that they use, but the plans must offer the required benefits.
Monthly premiums are based on income. Many people do not pay anything each month for Medicaid, while others have to pay a low premium. However, some states do require that Medicaid recipients pay coinsurance on prescription drugs when prescription drug coverage is available. This can be up to 20 percent of the drug’s cost. For low-cost generic drugs, this small portion of the cost is usually affordable.
Which Coverage Is Right for You?
If you qualify for Medicaid, you can get it through your state. However, if you do not qualify and you meet the eligibility requirements, you can get Medicare. You will choose from the Original Medicare and Medicare Advantage. Your coverage will depend on the option you choose. Fortunately, you can get help selecting a plan. Speak to a licensed insurance agent. The agent will go over your needs and help you select the right plan.
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