Are you confused if you should be applying to Medicare or Medicaid? In this short guide, we will explain the key differences between the two programs, helping you to make an informed decision about your coverage.
Medicaid and Medicare are both health insurance programs that are government-sponsored and operated. However, they differ dramatically in ineligibility, what government entity oversees the program and what each program costs. Let’s dive a little deeper.
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Medicaid is designed primarily for those with limited financial resources. But Medicaid eligibility does include other groups. The program is designed to help those who most need help with health insurance. Although Medicaid is operated by the individual States, the program defines certain mandatory eligibility groups, including:
Low-income families
People with disabilities
Qualified pregnant women
Individuals receiving Supplemental Social Security Income (SSI)
The most common groups that are eligible are low-income families and people with disability. There are no age restrictions for Medicaid. To be eligible for Medicaid, you must not only be in an eligible group, your income must be below a state-defined threshold.
Because Medicaid eligibility is tied to income and asset levels. You have to re-certify with your State each year to make sure you qualify.
Medicare, on the other hand, is generally a permanent benefit. It is not income dependent. If you meet the eligibility criteria, you enter the program. To be eligible for Medicare, one of the following must apply:
You are 65 years old
You’re diagnosed with End-Stage Renal Disease (ESRD), and meet certain other criteria
You’re diagnosed with ALS (Lou Gehrig’s disease)
You receive disability payments from Social Security or the Railroad Retirement Board for 24 consecutive months
Once you turn 65, your Medicare benefits are permanent.
Medicare vs. Medicaid Difference #2 – Federal and State Responsibility
A second difference is how Medicare vs. Medicaid programs are administered. Medicaid is run by the individual States. Although there are some federal requirements, each State has the flexibility to set its own policies on pricing and provider participation.
Medicare, on the other hand, is more or less fixed. The benefits are spelled out in the law. There is little to no State flexibility to modify your Medicare benefits.
This same distinction applies to how you apply for benefits. For Medicaid, you’ll be dealing with your State, and perhaps your county of residence. Your application and all aspects of your enrollment are handled at the State level.
A third difference is in the costs between these two programs. Costs can vary for Medicaid coverage from State to State, while Medicaid costs tend to be low for services and procedures. In many states, when you are Medicaid eligible, you will pay little to nothing out of pocket for covered health benefits.
With Medicare, a larger spectrum of the population is covered, so people are expected to pay out of pocket for some of their expenses. Under Original Medicare Part B, beneficiaries are required to pay 20% of the Medicare-approved costs for their services and procedures. If you are looking to control costs for your Medicare coverage we recommend that you explore Medicare Advantage plans.
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David Luna Co-founder and Licensed Insurance Agent
You can be covered by both Medicare and Medicaid. When you qualify for both programs you are known as “dual eligible.” You usually qualify for both programs if you are on Medicare based on a disability and have limited income. You can also qualify if you are over 65 and have limited financial resources. The combination of these two programs can help you pay for prescription drugs and even reduce your Part A and B premiums.
I am an Arizona Life and Health Insurance Licensed Agent and have been helping people with Medicare since 2009. I enjoy coaching youth and high school sports, watching sports, and spending time with family. I also like taking road trips and vacationing anywhere that has a beach.
(623) 223-8884 | TTY: 711
(623) 223-8884 | TTY: 711
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