What Are Medicare And Medicaid
There always seems to be a bit of confusion when it comes to the two government healthcare programs Medicare and Medicaid, but that’s what we’re here to clear up. Aside from the similarity in their names, the two healthcare programs are quite different. So, if you’re curious as to which program is right for you, here’s what you need to know.
Centers For Medicare And Medicaid Services (CMS)
Starting with the basics, both programs are overseen by a branch of the Health and Human Services Department known simply as Centers for Medicare and Medicaid Services (CMS). While the CMS directly oversees the Medicare program, the Centers for Medicare Medicaid Services works in conjunction with states when in comes Medicaid.
Who Funds Medicare And Medicaid?
As mentioned above, the Centers for Medicare and Medicaid Services oversee both Medicare and Medicaid. However, when it comes to involvement in day to day activities, and allocating taxpayer funds, both programs are not created equal. In fact, this is one of the main differences between Medicare and Medicaid.
- Medicare - This program is federally funded, and accounted for just over 20% of the National Health Expenditure Accounts in 2015. Medicare does not rely on state funds, but rather two federal trust funds, Hospital Insurance (HI) Trust Fund and Supplementary Medical Insurance (SMI) Trust Fund. The Hospital Insurance Trust Fund is funded primarily by payroll taxes, income taxes, interest earned on trust funds, and those who have to pay Medicare Part A premiums paid while the Supplementary Medical Insurance Trust Fund is funded primarily by Medicare Part B premiums.
- Medicaid - Unlike Medicare, Medicaid is funded at both the federal and state level. The federal government only chips in for a percentage of the programs total expenditures with something called the Federal Medical Assistance Percentage (FMAP). In 2015, Medicaid funding only accounted for 17% of the National Health Expenditures Account. States are responsible for the rest of the program expenditures.
Medicare Vs. Medicaid - What’s The Difference?
Medicare and Medicaid are both government funded and sponsored healthcare programs that provide coverage and benefits to Americans, so how are they different? Well, as mentioned above, Medicare is funded by a combination of premium payments and payroll/income taxes, where Medicaid is jointly funded by federal and state funds, but there’s more. Here’s a list of how Medicare and Medicaid differ from one another.
Who Its For
Medicare is a program specifically geared towards American seniors, along with individuals who have been on disability for an extended period of time. Medicaid, on the other hand, aims to provide health coverage for low-income Americans. The best way to remember which program is right for you is Medicare is for seniors (primarily), and Medicaid is for low-income individuals or families.
Who’s In Charge?
This was already touched on earlier, but a refresher never hurts. While the Centers for Medicare and Medicaid Services oversee both Medicare and Medicaid, the CMS is solely in charge of Medicare, where the CMS merely oversees the states who run their own Medicaid programs.
What’s Covered
Medicare and Medicaid are both pretty extensive health insurance programs, however, there are some differences to take into account. First, Medicare Part A and Part B (Original Medicare) cover hospital costs once admitted skilled nursing facilities, hospice, medical insurance, and outpatient care. There are also Medicare Advantage plans, Medicare Supplemental plans, and Medicare Part D plans (prescription coverage) that you can purchase to fill in any remaining gaps in coverage. Essentially, depending on what plans you opt for, Medicare can cover all your medical needs.
Medicaid, on the other hand, is a bit different. Since Medicaid operates at the state level, your medical benefits may vary depending on where you live. However, there are mandatory benefits that states are required to cover which include:
- Inpatient hospital services
- Outpatient hospital services
- Nursing facilities
- Home health services
- Family planning services
- Physician services
- Laboratory services
- X-ray services and more
States have the ability to provide optional benefits to Medicaid beneficiaries as well. These optional benefits include some of the following:
- Prescription drugs
- Clinic services
- Physical therapy
- Occupational therapy
- Respiratory care services
- Optometry services
- Dental services
- Hospice
- TB related services
- Inpatient psychiatric services for individuals under age 21
- Chiropractic services and more
What’s The Cost?
Since Medicaid is a low-income health care program, the costs associated with it are minimal. In fact, some people may be eligible for free Medicaid, or heavily subsidized rates.
Medicare, on the other hand, can get pricey depending on the coverage you opt for. Most Americans are eligible for free Medicare Part A, which is the hospital insurance, but will have to pay a premium for Medicare Part B. The premium for Part B is dependent on your income level. While most Americans will pay a monthly premium of $134 for Part B coverage, that number can jump to $428.60.
Medicare Part C and Part D are sold through the private market, so plans and pricing will vary. Medicare Supplement (Medigap) plans are also purchased through private insurance companies, so the best way to find costs associated with plans is to search for quotes, which you can easily do with FirstQuote Medicare.
Medicare And Medicaid Dual Eligibility
Certain individuals are eligible for both Medicare and Medicaid, meaning they qualify for Medicaid coverage along with Medicare coverage. What happens when an individual is eligible for both Medicare and Medicaid, is that they become eligible for a Medicare Savings Program (MSP), which means they get the best of both worlds. Medicare will still pay for the majority of costs, and any additional expenses will be paid by Medicaid. Medicare and Medicaid dual eligibility provide assistance through one of the following Medicare Savings Programs:
- Qualified Medicare Beneficiary (QMB) Program - Assists in out-of-pocket costs associated with Medicare Parts A and B.
- Specified Low-Income Medicare Beneficiary (SLMB) Program - Helps with Medicare Part B premium costs.
- Qualifying Individual (QI) Program - Also helps with Medicare Part B premium costs.
- Qualified Disabled Working Individual (QDWI) Program - Assists certain disabled and working Medicare beneficiaries pay for Medicare Part A premiums.
Regardless of which Medicare Savings Program you are enrolled in, Medicare will be the first coverage option to pick up the tab for your medical services. Medicaid is just there to supplement the remaining costs Medicare doesn’t pay for. Medicare and Medicaid dual eligibility also vary by state.
Medicare Or Medicaid - Which Are You Getting?
Now that you have a better understanding of both Medicare and Medicaid, it should be a bit easier to determine which government healthcare program you will be eligible for. Here’s a quick recap which will tell you if you should be applying for Medicare or Medicaid.
You’re Getting Medicare
- You’re turning 65 years old.
- You’re entering your 25th consecutive month on disability.
- You have End Stage Renal Disease.
- You receive benefits from Social Security or the Railroad Retirement Board.
- You or your spouse had a government job that provided Medicare coverage.
You’re Getting Medicaid
- Your income level is under 100% of the Federal Poverty Limit (state pays for your Medicare).
- Your income is 133% of the Federal Poverty Limit in a state with expanded Medicaid.
- You are a child of a low-income family.
- You are pregnant.
- You receive Supplemental Security Income (SSI).
Medicare Quotes With FirstQuote Medicare
If you’re eligible for Medicare, then it’s time to take the next step. Between Original Medicare, Medicare Advantage, Medicare Part D, and the 10 Medicare Supplemental Plans, figuring out what is best for you can get complicated. FirstQuote Medicare is here to help though!
Get a fast and easy Medicare Supplemental quote with FirstQuote Medicare, and make sure you are covered for all your medical needs. Since plans and pricing vary by state, all you have to do is enter your zip code to get started.
