Many people are aware of Medicaid and Medicare as government healthcare programs. But there may be some confusion over the difference between the two, when it comes to their functions and the people they serve.
Medicaid is a state-run assistance program for low-income individuals. It serves low-income families, pregnant women, recipients of Supplemental Security Income, and other eligible groups. While the program does vary state by state concerning costs and eligibility, Medicaid must follow national guidelines from the US Department of Health and Human Services.
Benefits: The benefits of Medicaid are free or low-cost healthcare costs, including doctor services, hospital services, lab tests, x-rays, and some home health services. Some states’ Medicaid programs may also offer additional benefits, such as discounted prescription drug prices, physical therapy, occupational therapy, and case management.
Eligibility: To qualify for Medicaid, a person must meet state-specific income thresholds. Many states set the income eligibility at or below 133% of the federal poverty level. Alternatively, you may qualify for Medicaid if you fall into one of these groups: low-income family, qualified pregnant woman, or recipient of Supplemental Security Income. Some states also cover groups such as people receiving home care or children in the foster care system.
Costs and Coverage: Once someone has enrolled in Medicaid, the coverage starts either on the day you applied or the first day of the month you applied. If you were eligible weeks or months before applying, your Medicaid coverage can be retroactive for up to three months. Medicaid will pay almost all costs; state-based premiums will not exceed more than 5% of the family’s income.
Medicare is a health insurance program benefitting seniors (those 65 years or older), people with disabilities, and those with certain chronic medical conditions. The program is run by the Centers for Medicare & Medicaid Services, which is a federal agency.
Benefits: Medicare is a federally funded program that provides those who qualify with medical insurance – no matter their income level. Medicare recipients pay into the program through payroll taxes (while they’re working), and then once they’ve retired, they pay via monthly premiums.
Eligibility: To qualify for Medicare, a person must be: 65 years or older, have a disability for which they receive Social Security Disability Insurance, have ALS (also known as amyotrophic lateral sclerosis or Lou Gehrig’s disease), or end-stage kidney disease. Many Medicare enrollees sign up for Medicare at age 65. The initial enrollment window is three months before your 65th birthday (the month you turn 65) to three months after your 65th birthday.
For more information on eligibility, enrollment, and plans, you can visit Medicare.gov.
Costs and Coverage: The cost of Medicare is based on when the individual enrolled, what options they’ve chosen, and the services they used over the year. Medicare is a fee-for-service health plan, meaning that every doctor visit, test, and treatment is paid for separately. Medicare will pay for the majority of those medical charges, with the patient covering the rest with deductibles and coinsurance.
Medicare has several parts. Part A covers hospital inpatient care. Part B covers outpatient care (ex: doctor visits, medical tests, outpatient therapy, medical equipment). Part C, also known as Medicare Advantage, is a private insurance plan providing extra coverage and capping out-of-pocket expenses. Part D is a prescription drug coverage plan. Medicare’s basic core coverage is Parts A and B.
Can You Have Medicaid and Medicare Coverage?
Yes. About 20% of Medicare beneficiaries (more than 12 million people) have dual eligibility for Medicare and Medicaid. These individuals will have most of their healthcare costs paid for. Typically, Medicare will pay its healthcare benefits first, and then Medicaid will pay the rest (which is considered partial or full Medicaid benefits). Those who are dual eligible will also automatically be enrolled in Medicare Part D Extra Help subsidy.
Medicare and Medicaid services may also overlap. In some situations, Medicaid will help those paying for nursing home care, if those expenses are not covered by Medicare.
Have Additional Questions? Contact Brian M. Douglas and Associates
A thorough estate plan should include provisions for your health care and cost of living – which includes healthcare expenses. If you have questions about Medicaid or Medicare, please feel free to reach out. We’re happy to discuss the different options and which works best for you and your family. If you’d like to schedule a consultation, you can call (770) 933-9009 or reach out online.