Medicare and Medicaid are regularly used interchangeably, but they are very different programs. While both were established by the U.S. government in 1965 to cover healthcare costs and are taxpayer funded, that’s about where the similarities end. Do you know the difference between Medicare and Medicaid?
Medicare is a federally run program which provides health insurance to people aged 65 and older as well as the disabled, people with ALS, and people with end stage renal disease.
Coverage depends on the route you choose to take with Medicare. There are 4 parts of Medicare. Part A covers hospital costs while Part B covers doctor and outpatient costs. Both of these together make up Original Medicare. Part C, which are Medicare Advantage plans, take Parts A and B, and usually Part D, to a private company who then provides the coverage. Part D covers drug costs. These 4 parts can get very confusing.
Costs for Medicare include premiums, deductibles, copays, which vary between each Part as well as the plan you choose.
If not already taking Social Security benefits, you need to enroll for Medicare when you turn 65. You should enroll for Part A even if you still have other coverage as it is premium-free for most people. There are penalties if all four parts are not enrolled in properly, so make sure to be aware of those.
What is Medicaid?
Medicaid is a joint federal and state program which pays health costs for certain people and families with limited income and resources, including children, pregnant-women, elderly adults, and people with disabilities. Currently, over 68 million Americans are covered by Medicaid. While each state creates its Medicaid program, each program must follow federal guidelines. These guidelines include mandatory coverage for services such as hospitalization, doctor services, family planning, x-rays, and midwife services when they are determined to be “medically necessary”.
Eligibility is dependent on each states rules. With all states, you must be under a certain income
Cost on Medicaid may include premium, deductibles, and copays, but, depending on the program, beneficiaries can be exempt from out-of-pocket costs.
Many people use Medicaid to cover long-term care costs, in fact Medicaid is the nation’s largest single source of long-term care funding. Most people do not realize that Medicare does not cover long-term care costs. When they need this care, they do not have a plan to pay for it. Currently, the average cost of a nursing home in 2017 was $7,148/ month for a semi-private room. This can add up a lot over months and years, and people simply do not have the savings to pay for it. This is when Medicaid steps in. In doing this though, most of your assets are required to be depleted. You will also not have as much as a choice in which nursing home or assisted living facility you can be in, as not all accept Medicaid payments. It is much better to have a plan in place before it comes to this.
Can I be eligible for both Medicare and Medicaid?
Yes -more than one in five Medicare beneficiaries receives Medicaid benefits. This is referred to as “dual eligibility”. In order to be eligible for this, you must qualify and enroll in both programs. Medicare is designed to really only cover 80% of beneficiaries health care costs, leaving them with the other 20%. With dual eligibility, both programs can work together to cover most of the health care costs. This can result in some of the premiums and copays Medicare charges to be paid by Medicaid. Medicaid will also sometimes cover medical procedures that Medicare will not. Contact Social Security for more information about dual eligibility.
Medicare and Medicaid can be confusing – if you need any help sorting out this confusing, you can call Cardinal Advisors at 919-535-8261 or fill out the form below!