Americans have two government programs to turn to when paying their health care costs: Medicare and Medicaid. Medicare is a national health insurance program designed to help people 65 and older and those with disabilities pay their medical bills. Medicaid is a collection of state-run programs that gives low-income Americans access to affordable care.
While their names sound similar, and they both help people pay for health care, Medicare and Medicaid have different eligibility requirements, coverages, and costs. Understanding which you need and how you might qualify for these government-funded programs could affect how much you spend on health care. Here’s a look at how the Medicare and Medicaid programs differ—and how you could possibly receive benefits from each.
What is Medicare?
Medicare is a federally regulated health insurance program that helps people 65 and older and those with disabilities pay for their health care. This program is funded by the payroll taxes you’ve paid while working, as well as premiums that beneficiaries pay each month or quarter for coverage.
Medicare program eligibility
You can qualify for Medicare insurance in three ways:
- When you turn 65
- When you reach your 25th month on disability
- Shortly after a diagnosis of end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS)
You’ll also need to be an American citizen or permanent legal resident to receive insurance from Medicare. Learn more about Medicare eligibility.
If you think you might be eligible, find out about Medicare Open Enrollment.
Recipients have several choices for Medicaid health plans. Original Medicare consists of Medicare Part A (hospital insurance) and Part B (medical insurance) and provides the basis for all other types of Medicare health insurance plans. Part A covers hospital stays, hospice care, skilled nursing care, and some home health care. Part B covers other health care services such as doctor visits, preventative services, lab testing, and (often) managed care.
If you have Original Medicare, you can add Medicare prescription drug coverage (Part D), Medicare supplemental insurance (Medigap), or both, to further help with health care costs.
Learn more about the parts of Medicare with our Medicare Guide.
Many Medicare recipients choose a Medicare Advantage plan instead of Original Medicare, which covers everything in Parts A and B, and usually prescription drugs too. Often, Medicare Advantage plans also include coverage for dental work, vision care, hearing aids, and the SilverSneakers fitness program.
Medicare Advantage, Medigap, and Part D plans are all provided by private insurance companies but must follow federal guidelines for mandatory benefits and coverage.
Learn more about Medicare vs. Medicare Advantage.
Medicare pays for many health services, but it comes at a price. While most people receive premium-free Part A because they’ve paid Medicare payroll taxes, you’ll probably have to pay for other parts of Medicare you enroll in. In addition to a monthly premium, you might have to meet a separate deductible for each plan you have, as well as other costs such as coinsurance and copayments.
Learn more about Medicare premiums and deductibles.
What is Medicaid?
Medicaid helps people with a low income cover health care expenses. Each state administers its own Medicaid program, so benefits and requirements vary depending on where you live. Funding for Medicaid is shared by your state and the federal government.
Whether you qualify for Medicaid depends mainly on your income, although factors such as household size, pregnancy, and disabilities can factor in as well. Specific eligibility requirements vary by state.
Medicaid benefits vary by state, although each Medicaid program must cover specific minimum health care expenses, according to federal guidelines.
Those mandatory benefits include coverage for the following services:
- Hospital, nursing facility, and home health care
- Physician care and lab tests
- Family planning, freestanding birth-center, and nurse midwife, services
- Certified family and pediatric care by a nurse practitioner
Many Medicaid programs also cover prescription drugs and vision and hearing care, although the federal government doesn’t require them to do so.
Like other aspects of Medicaid, your costs in this program will vary depending on where you live. Check your state Medicaid program for more information and to apply for Medicaid.
Can you have both Medicare and Medicaid?
Yes, it’s possible to have both Medicare and Medicaid. People who receive both Medicare and Medicaid benefits, usually low-income seniors, are called dual eligibles. Many insurance companies provide Medicare Advantage plans, called D-SNPs (Special Needs Plans for Dual Eligibles), for people in this situation. If you have both types of benefits, Medicare will pay first.
Learn more about Medicare dual eligibility. Or call a licensed sales agent. Whether you qualify as a dual eligible or not, an agent can help you understand your Medicare options and search for plans in your area.
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Content on this site has not been reviewed or endorsed by the Centers for Medicare & Medicaid Services, the United States Government, any state Medicare agency, or any private insurance agency (collectively “Medicare System Providers”). Eligibility.com is a DBA of Clear Link Technologies, LLC and is not affiliated with any Medicare System Providers.