Have you ever been part of a conversation where someone says “Medicaid? Medicare? I never remember which is which!?” This exclamation is very popular. Many people get confused about Medicare vs Medicaid and sometimes even use the terms interchangeably. This is understandable because the terms do sound very similar. But if you have ever needed to apply for either, you know that they are actually two different and distinct programs. It would be a big error to apply for Medicaid if you’re trying to enroll in Medicare and vice versa.
Medicaid and Medicare may sound similar, and they are both health insurance programs, but they are very different. Taking a moment to read about the two programs can give you a better understanding of each program and the differences between the two are actually very straightforward.
We’ve answered a few questions below to help clarify.
What is the difference between Medicare and Medicaid?
Two distinct factors mark the differences between Medicare and Medicaid. These are age and income. Medicaid covers medical costs for people with limited income or those who are considered low-income, regardless of age. Medicare coverage is for eligible individuals age 65 and older, or those who are younger with certain disabilities, such as end-stage renal disease or ALS.
Put simply, Medicare exists to care for the elderly, and Medicaid exists to aid those who need it. An easy pneumonic to help you remember is [Medi]care for the elderly, Medic[aid] the sick.
How does Medicare work?
Medicare is health insurance provided by the federal government for those who have reached age 65 or for those with certain disabilities. Eligible persons must first choose between Original Medicare or a Medicare Advantage plan. Both options offer Medicare Part A which is hospital insurance and Medicare Part B medical insurance. There are also additional options for prescription drug coverage and supplemental insurance. Each year, enrollees can choose to keep or change their plans and many of these plans are covered at any location throughout any state that takes Medicare.
How does Medicaid work?
Medicaid is a joint federal and state program, which means there are general federal guidelines but each state makes its own rules and regulations regarding Medicaid eligibility requirements and qualifications. Eligibility for Medicaid can vary widely depending on your state, but in general, Medicaid covers healthcare for those who fall under a certain income threshold. In most cases, Medicaid is reserved for low-income children, caretakers, grandparents, or those with disabilities. Covered services typically include hospital care, lab and clinic services, and some prescriptions, though there are many different services that states can choose to opt-in or out of. Because of state differences, coverage does not extend across state lines.
Can you have both Medicare and Medicaid?
You may be wondering if it’s possible to qualify for both Medicare and Medicaid at the same time. The simple answer is yes, some may be dual eligible. For instance, if you are over 65 years old and qualify for Medicare but your income is too low to afford the monthly premiums, then you may qualify for Medicaid which covers some or all of your out-of-pocket costs.
Have Questions about Medicare or Medicaid?
Understanding the basic differences between Medicare and Medicaid may be simple once you look into it, but understanding the complexities, eligibilities, and parts of each can be quite complicated. At Patriot Insurance Brokers, we help clients navigate these complexities daily.
Do you have specific questions about how to enroll in Medicare? Or perhaps you’re unsure of whether you may also qualify for Medicaid? We can help clarify and help you select the best plan for your needs. Call us today to find out how we can help.