No matter your medical needs or your budget constraints, you want to get the best health insurance available. Learn about the difference between Medicare and Medicaid, and find out which is right for you.
On the surface, Medicare and Medicaid share a couple of similarities. Both are government-sponsored programs that help people with healthcare-related costs. That’s where the likenesses end, though.
Both Medicare and Medicaid have well-defined eligibility requirements. Read through the basic guidelines to determine which one may apply to you.
You must be at least 65 years old and U.S. citizen or a permanent resident for at least five years to receive Medicare. If you’re younger than 65, you qualify for full Medicare Part A benefits if you meet one of the following criteria:
If you’re 65 or older, you qualify for full Medicare Part A benefits if you or your spouse have worked and paid Medicare taxes for at least 10 years. If you don’t meet the tax requirement, you’ll have to pay a monthly premium for coverage.
You must be a U.S. citizen or permanent resident to receive Medicaid. You must also reside in the state where you receive benefits. Medicaid primarily covers low-income families, including:
Federal law dictates that state programs must cover people who receive Supplemental Security Income (SSI) and those below a certain income threshold. If you don’t receive SSI, the Modified Adjusted Gross Income (MAGI) calculation generally determines whether you’re eligible for Medicaid. Many states also offer expanded coverage for low-income families. Check the Medicaid eligibility rules for your state to find out if you qualify.
Both Medicare and Medicaid cover healthcare-related costs. The services and time periods vary from program to program, though.
Medicare is divided into three basic parts, each of which covers a different component of your health care. Medicare Part A includes hospital stays, skilled nursing home stays, hospice care, and limited home health care. Part B includes doctor visits, preventive services, and medical equipment and supplies. Part D covers prescription drugs and is available through private insurance companies.
Medicaid covers almost every type of health care cost. This program includes everything from doctor visits and hospital and nursing home stays to home health care costs. It also covers long-term care at home or in a nursing facility. Medicaid doesn’t cover prescription drugs.
Sometimes your basic health care coverage doesn’t cover all your medical needs and you require supplemental insurance.
To enhance your Medicare coverage, you can purchase one of 10 standardized Medicare Supplement Insurance policies. Known as Medigap plans, these policies include a range of extras, such as Part A or Part B coinsurance, Part A or Part B deductibles, and even coverage during foreign travel.
If you have Medicaid, you can’t buy supplement insurance. A group or individual plan might offer additional coverage, though.
If you qualify for both Medicare and Medicaid, you can benefit from both programs. As a “dual eligible,” virtually all your health care costs will be covered by a combination of these two programs.
It’s still important to understand what each plan covers and when. According to Medicare.gov, when you have both plans, Medicare pays first for the services it covers. Next, any group health plan or Medigap policy you have will pay its share of the costs. Finally, Medicaid covers its portion of the bill, leaving you with little if any health care costs to pay out of pocket.
Understanding Medicare and Medicaid isn’t always easy. Now that you know the essential differences and similarities between these two health care plans, why not spread the word? Share this article with family and friends to help them make smart decisions about their own health care plans.