Medicare vs Medicaid: What’s the Difference?

Medicare and Medicaid are health insurance programs offered by the United States Government. There is often a lot of confusion between Medicare vs Medicaid in regard to eligibility, coverage, and health care costs. If you are thinking of getting one of these types of medical insurance, please keep reading to learn the key differences between Medicaid and Medicare.

What is Medicare coverage?

Medicare is a national health insurance program. This federal program covers people 65 years of age and older. In addition, Medicare helps cover medical costs for people under age 65 in special situations. For example, Medicare pays healthcare costs for people under 65 who have certain disabilities or medical conditions such as Lou Gehrig’s disease (amyotrophic lateral sclerosis or ALS) or end-stage renal disease (kidney failure requiring regular dialysis or needing a kidney transplant).

What is the difference between Medicare and Medicare A?

There are 4 parts of Medicare:

Medicare Part A covers hospital care, inpatient care, care provided in skilled nursing facilities, hospice care, occupational and physical therapy, and laboratory services.
Medicare Part B covers outpatient care from health care providers, home health care, durable medical equipment like walkers, wheelchairs, and hospital beds, as well as wellness visits and preventive care.
Medicare Part D provides prescription drug coverage and includes recommended vaccines and shots. You can get coverage for prescription drugs by joining a Medicare Advantage Plan in addition to Original Medicare (Part A and B). Medicare-covered services under Part D are administered by private companies approved by Medicare.
Medicare supplement insurance (also called Medigap) helps in cost sharing, i.e., to cover medical costs in addition to original Medicare. Medicare Advantage Plans are standardized plans, such as Plan G or Plan K, that offer the same benefits regardless of which insurance company sells them.

What is Medicaid coverage?

The Medicaid program is a joint federal and state health insurance program. Medicaid services are managed at the state level. State-administered Medicaid programs are a way to get health coverage and medical services at a lower cost or no cost.

Medicaid covers doctor visits, laboratory services, hospital stays, home health care, family planning, and transportation to medical appointments. Some states offer additional benefits such as prescription drug coverage, dental care, optometry (eye) services, physical therapy, and respiratory care services.

In most states, the federal government mandates that Medicaid cover children, pregnant women, elderly individuals, people with disabilities, and eligible low-income adults. However, some states offer expanded coverage and more healthcare services than federally mandated.

What is the highest income to qualify for Medicaid?

Medicaid eligibility varies from state to state. To qualify for healthcare coverage under Medicaid, you must be a resident of the state and have an income that is below your state’s Medicaid limit. In other words, there is no uniform income threshold for Medicaid eligibility. Each state can set its income threshold and eligibility requirements for low-income families.

Most states offer Medicaid coverage to adults with an income of no more than 133% of the Federal Poverty Level (FPL). The FPL is calculated based on the size of a family. For 2023, the FPL is $14,580 for a single adult and an extra $5,140 for each additional family member.

Can you have both Medicare and Medicaid?

Yes, some people are dually eligible for Medicare and Medicaid. They qualify for Medicare because they are age 65 or older or have certain disabilities. They also qualify for the Medicaid state program based on their state’s eligibility criteria.

Such dual-eligible people can get special Medicare Part C plans (Medicare Advantage Plans) from private insurers that include hospital insurance, coverage for medical treatment, as well as prescription drug coverage. They may also include extra coverage for vision and dental services and preventive or wellness programs. Monthly premiums may be as low as $0 for dual-eligible individuals.

What are the main differences between Medicare vs Medicaid?

There are two key differences between Medicare and Medicaid.

Eligibility Based on Age

Medicare plans are for people 65 years of age and older. Only certain individuals under the age of 65 years are eligible for Medicare. On the other hand, Medicaid offers benefits to all eligible individuals regardless of age.

Eligibility Based on Income

You can receive Medicare benefits regardless of your income level or resources. However, you will pay higher Medicare premiums if your income level is higher. On the other hand, Medicaid pays for the medical care of people with limited income. You can only get Medicaid health insurance if your income is below your state’s income eligibility threshold.

Other differences between Medicare and Medicaid are as follows:

Medicare is a federal program. Medicaid is jointly funded by the federal and state governments and is run by states according to federal guidelines.
You need to enroll with the Social Security Administration to receive Medicare-covered services. You need to enroll with your local state agency to receive Medicaid coverage.

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