Americans have two government programs to turn to when paying their health care costs: Medicare and Medicaid. While their names sound similar, and they both help people pay for health care, Medicare and Medicaid have different eligibility requirements, coverages, and costs. Additionally, the federal government runs Medicare, while each state runs its own Medicaid program.
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 Medicare and Medicaid 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.
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.
Medicare recipients have several choices for receiving benefits. 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. If you have Original Medicare, you can add a Part D prescription drug plan, a Medicare Supplement (Medigap) plan, or both, to further help with health care costs.
Learn more about the parts of Medicare with our Medicare Guide.
Many Medicare beneficiaries 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.
Learn more about Medicare vs. Medicare Advantage.
Medicare comes at a price. While many people receive premium-free Part A because they’ve paid Medicare payroll taxes, you may have to pay for other parts of Medicare you enroll in. In addition to a monthly premium, you’ll probably 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.
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, nurse midwife, and freestanding birth-center 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 are called dual eligible. 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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