Medicare vs. Medicaid: Different health products for different needs
Medicare and Medicaid are programs that were created at the same time under the Social Security Amendments of 1965. It’s not surprising that people get the two programs confused, considering that they both deal with providing medical care and insurance.
However, Medicare was created specifically to serve those people reaching 65 years of age. But Medicaid had a much different functionality: To reach the most vulnerable members of society, despite their age. Some of the demographic lines have shifted for Medicare over the years, meaning that now some people don’t have to be 65 years of age to qualify. But for the most part, that was the original intent of the Medicare system.
Medicare only provides health insurance to cover a variety of potential medical mishaps, not the services themselves. Medicare Part A provides hospital insurance for those 65 or older. However, if you are under 65 years of age and have been certified disabled and are receiving disability benefits, you will qualify for Medicare Part A and B automatically. You can also qualify for Medicare A and B if you have End-Stage Renal Disease (ESRD) and amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s disease), even if you haven’t reached retirement age. People automatically become eligible for Part A when they belong to the specific demographic that Medicare covers. They do not even have to pay a premium to get Medicare Part A.
Medicare Part B offers supplemental medical insurance for things like: renal dialysis, outpatient procedures and chemotherapy. It can also help you pay for deductibles, copayments and coinsurance. You may be eligible for coverage under Medicare Part B, but you have to pay a premium to get it. It’s not an automatic program; it’s one you must opt into to qualify.
Medicare Part C allows people who qualify to get additional choices with their Medicare plans, by giving more coverage under private insurance plans. This is also an optional part of Medicare, for which people must pay premiums for to receive benefits. However, it can greatly expand the medical services available to people under their insurance, whether private or through Medicare.
Medicare Part D covers generic and prescription drug costs associated with your medical care. It is also a voluntary program that requires a premium payment. It helps to offset the costs for approved drugs under a variety of different drug plans offered with Medicare Part D.
How Medicare works
Medicare is a program that people pay into when they are working through payroll taxes. Thus, it does come with some work requirements. You either have to work the required amount of time to qualify, or your spouse has to have qualified, if you haven’t, in order to be eligible. Other people who can qualify, but haven’t worked in the system, are dependent children of those that met the work requirements already, as long as the dependents are disabled or meet a special condition.
What is Medicaid?
Medicaid provides actual health and medical services for people who qualify, typically low-income people or people in some sort of need, regardless of age. Both the type of services available and the demographic covered with Medicaid really depends on what each state allows. That’s because the federal and state government administers Medicaid jointly.
Some states will base requirement on disability, pregnancy status, age and even citizenship. The federal government provides matching funds for people that meet its criteria for eligibility. It does require that the states follow suit to get those matching funds. However, it’s up to the discretion of each state to decide what policies it will implement with Medicaid (or not).
The federal government provides funds for people that are also classified as low-income, because they make less than 133 percent or 100 percent (depending on the state) of the poverty level.
Other demographics targeted to receive Medicaid benefits are those who are on other federal programs, like: Supplemental Security Income (SSI), Title IV of the Social Security Act and Aid to Family with Dependent Children (AFDC). Some Medicare recipients are also eligible for Medicaid. In addition, you will need to check with the state in which you reside to see if they also have expanded Medicaid to cover your specific demographic in need. Some states will also include the blind, disabled or uninsured under their programs.
What services are available under Medicaid?
The types of services that are required to receive the matching federal funds usually available within states are:
- Home health services
- Rural health clinics
- Family planning services
- Inpatient and outpatient hospital services
- Physician services
- Pediatric and Nursing services
- Transportation help to and from medical appointments
Other services that each state must decide to opt into or not include:
- Eye care
- Dental care
- Physical therapy
- Respiratory care
Medicaid expansion: Am I covered?
Medicaid was to be expanded under the Affordable Care Act (ACA) in all states. However, many governors have refused the Medicaid expansion, and lawsuits were brought challenging whether this provision of the law was legal. In June 2012, the Supreme Court determined that the ACA could not require all of the states to expand the eligibility requirements for Medicaid. As such, it must be left up to the states whether they make this change or not.
Some states have expanded Medicaid to allow more people into the program and other states have not. Thus, we have a patchwork quilt of offerings that may or may not be covered in your state, depending on what it allows. The Medicaid expansion covered by the ACA was meant to provide health insurance for those that were uninsured within the state, based on whether the individual made 133 percent or less of the poverty level, regardless of other qualifying conditions.
Some states refused the Medicaid expansion that would have provided insurance to the uninsured in those states free of charge, leaving many in a “coverage gap.” However, the original Medicaid programs, without the expansion, are still working within the states. However, what services they offer and to whom will be different on a state-by-state basis.