We find that many clients are confused about the differences between Medicaid and Medicare.  While their names sound similar, their programs are very different.  This confusion can lead clients to some mistaken assumptions about how they will pay for their future healthcare, especially if they need long-term care.

Medicare

Medicare is a health insurance program provided through the federal government.  There are two ways to qualify for Medicare.  Most people qualify by turning age 65, when most Americans become eligible to join the program.  Disabled people may qualify for Medicare if they have received Social Security Disability Insurance (SSDI) for at least two years.  There are no income or asset limitations to qualify for Medicare, but the costs will be based on the recipient’s work history.

Because Medicare is run by the federal government, it is uniform from state to state.  It has four parts.  While Part A provides hospital insurance, Part B is medical insurance for doctor visits, tests, etc.  Part D provides prescription drug coverage.  Part C, also known as the “Medicare Advantage Plan” is a private health plan that can be used as a replacement for Parts A, B and D.  Do your research before choosing a Part C plan, as they are not a good choice for everyone.  See our article about Part C plans here.

Medicaid

Medicaid is a health care assistance program.  The federal government provides guidelines and partial funding.  Each state administers its own Medicaid program and provides the remaining funding.  This means that the program varies from state to state.

Medicaid is for people who cannot to pay for health care on their own.  In Indiana, we have more than 20 different categories of Medicaid to cover everyone from children to pregnant women to refugees to the disabled.  In our office, we deal exclusively with Medicaid for the Aged, for people over 65 who require long-term care.  To qualify for Medicaid for the Aged, senior must meet certain medical and financial requirements.  Once the qualify, they pay a share of their income for the nursing home.  Medicaid then pays the rest.

Dual Eligibility

A person can be eligible for both Medicare and Medicaid.  In that case, the two programs work together to help the recipient cover the expenses of health care.  For example, Medicaid can pay the premiums, co-pays, and deductibles that are not covered by Medicare.  Medcaid can also help pay the costs of premiums for Medicare Parts A and B.

Although Medicare and Medicaid can be quite confusing, it is important to understand the basics.  If you have any questions about something you have read or would like additional information, please feel free to contact us.

Dual Eligibility

A person can be eligible for both Medicare and Medicaid and can have both. The two programs work together to help the recipient best cover the expenses of health care. For example, Medicare costs include premiums, copays, and deductibles. Full Medicaid benefits can cover the costs of Medicare deductibles and cover the 20% of costs not covered by Medicare. Medicaid can also help with Medicare assistance and may cover costs of premiums for Part A and/or Part B.

Although Medicaid and Medicare can be quite confusing, it is important at a minimum to know the basics. If you have any questions about something you have read or would like additional information, please feel free to contact us.

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