By Renea Dennison, Contributor
Photo by Pixabay on Pexels.com
Do you ever find yourself confused about Medicare vs. Medicaid? Many people think they are the same thing, but they are not. This was brought to my attention with a recent article by our own Bob Evenson.
One can see why many might believe they are the same thing. First, the names are very similar. They are both federal programs created in 1965, and they are both designed to help pay for health care. Still, they are not the same.
Medicare is a federal health insurance program designed for eligible adults age 65 and older, and anyone under 65 who has a severe disability. Medicare has 4 parts. Part A covers hospitalization, except for long term care, and is paid through payroll deduction by everyone who works or has their own business. It is free to the participant. Part B covers doctor and outpatient visits. Participants pay premiums through Social Security deduction. Part C works through private carriers in a PPO or HMO type arrangement. Part D covers medications. Part C and Part D premiums are paid directly to the private carrier by the participant.
Medicare is funded by the premiums mentioned above and by general revenues in the federal budget. Besides age and/or disability, you must have 40 quarters of income reported to Social Security to be eligible for Medicare. Because Medicare is a federal program, the same requirements for coverage stay the same from state to state. The only difference pertains to insurance covered by private carriers which may impact deductibles and co-insurance on Parts C and D.
Medicaid is a health insurance program designed for people with low income. The program is funded by both state and federal governments. The federal government sets up parameters for states to follow, and reimburses states based on those guidelines. States, however, decide how to administer and fund the program. Not all states use all the funding available from the federal government because they do not want to participate in all the requirements. These reasons are why Medicaid varies from state to state.
Eligibility for Medicaid is not based on age or illness, but rather income. Families, children, pregnant women, people with disabilities and the elderly can all qualify for Medicaid if they meet the low income threshold. Medicaid will also pay premiums and other out of pocket expenses Medicare charges to anyone enrolled in both programs. About 15% of Medicare participants are also on Medicaid.
While Medicare and Medicaid are two different programs, they are both social programs designed to help those who might otherwise be unable to get insurance. Please feel free to comment below if you have any questions about Medicare vs. Medicaid.
Century Health Solutions is a subsidiary of Stormont Vail Health, Topeka and provides free Medicare Educational Seminars. We are your local expert in Medicare insurance planning and will help you find the best option for your personal situation. Call us at 785-270-4593 with questions or to sign up for a free seminar. Our business hours are Monday-Friday, 8:00am-4:30pm.