The terms Medicaid and Medicare are often confused or used interchangeably. They sound extremely similar, but these two programs are actually very different.
Each is regulated by its own set of laws and policies, and the programs are designed for different sets of people. In order to select the correct program for your needs, it's important to understand the differences between Medicare and Medicaid.
Medicare is a policy designed for U.S. citizens age 65 and older who have difficulty covering the expenses related to medical care and treatments. This program provides support to senior citizens and their families who need financial assistance for medical needs.
People under the age of 65 living with certain disabilities may also be eligible for Medicare benefits. Each case is evaluated based on eligibility requirements and the details of the program.
Those in the final stage of kidney disorders can also apply for the benefits of a Medicare policy.
Medicaid is a program that combines the efforts of the U.S. state and federal governments in order to assist households in low-income groups with healthcare expenses, such as major hospitalizations and treatments as well as routine medical care.
It's designed to help those unable to afford quality medical care and who don't have other forms of medical coverage due to strained finances.
In order to enroll in each program, you must meet certain criteria.
Medicare
In most situations, eligibility for Medicare is based on the age of the applicant. A person must be a citizen or permanent resident of the United States and 65 years of age or older to qualify.
Premiums and specific Medicare plan eligibility will depend on how many years of Medicare taxes have been paid. The exception to this is people younger than 65 who have certain documented disabilities.
Generally, people who receive Medicare benefits also receive some form of Social Security benefits. Medicare benefits can also be extended to:
- a person eligible for the Social Security disability program who's also the widow or widower age 50 or older
- the child of a person who worked a minimum length of time at a government job and paid Medicare taxes
Medicaid
Eligibility for Medicaid is based primarily on income. Whether or not someone qualifies depends on income level and family size.
The Affordable Care Act has extended coverage to fill in the healthcare gaps for those with the lowest incomes, establishing a minimum income threshold constant across the country. To find out if you qualify for assistance in your state, visit Healthcare.gov.
For the majority of adults under the age of 65, eligibility is an income lower than 133 percent of the Federal Poverty Level. According to Healthcare.gov, this amount is approximately $14,500 for an individual and $29,700 for a family of four.
Children are afforded higher income levels for Medicaid and Children's Health Insurance Program (CHIP) based on the individual standards of their state of residence.
There are also special programs within the Medicaid program that extend coverage to groups in need of immediate assistance, such as pregnant women and those with pressing medical needs.
Medicare
There are several parts of the Medicare program that offer coverage for different aspects of healthcare.
Medicare Part A, also referred to as hospital insurance, is offered without premiums to all individuals who meet the eligibility requirements and have paid — or are the spouse of a person who has paid — Medicare taxes for a minimum of 40 calendar quarters in the span of their life.
Those who aren't eligible to receive Part A premium-free may have the option of purchasing it. Part A is associated with skilled nursing care, hospital services, hospice services, and home healthcare.
Medicare Part B is the medical insurance portion. It offers coverage for outpatient hospital care, physician services, and other such services traditionally covered by health insurance plans.
Medicaid
The benefits covered by Medicaid vary by the issuing state, but there are some benefits included in every program.
These include:
- lab and X-ray services
- inpatient and outpatient hospital services
- family planning services, such as birth control and nurse midwife services
- health screenings and applicable medical treatments for children
- nursing facility services for adults
- surgical dental services for adults
Medicare and Medicaid are two U.S. government programs designed to help different populations get access to healthcare.
Medicare typically covers citizens 65 and over and those with certain chronic conditions or disabilities, while Medicaid eligibility is mainly based on income level.