Medicare vs Medicaid: How are these programs similar (and different)?

Comparing Medicare vs Medicaid can be confusing for some.  After all, these are two similarly named health insurance programs that offer similar benefits to similar groups of people – which is why it is so easy to get them confused.  Here are some of the commonly asked questions about the two programs to help you understand both their similarities and differences.

Who funds the program?

• Medicare is funded by the federal government.
• Medicaid is “jointly funded,” which means that the program shares funding from both the state government and the federal government.

What does the program cover?

• Medicare has several different parts and available plans, so its coverage is complicated. The most common parts are Original Medicare, Parts A and B, and the prescription drug plan, Part D.  Part A covers hospitalization costs, Part B covers doctors’ visits, and Part D covers prescription drugs.
• Medicaid generally covers doctors, hospitals, and prescriptions, but because coverage is determined at the state level, this can vary.

Who is eligible for the program?

• Medicare is primarily available for those who are elderly; people over the age of 65 are eligible for Medicare. Those who are disabled and receiving SSDI for more than two years, assuming they are over 20 years old, are often eligible for Medicaid.
• Medicaid eligibility varies state by state. In most states, those who are eligible for Medicare and/or SSDI payments are eligible for Medicaid.  States that accepted the Medicaid expansion during the rollout of the Affordable Care Act can also offer Medicaid to those with very low income.  Most states also offer Medicaid to children and pregnant women below certain income thresholds.

Is supplemental insurance necessary?

• Medicare might require supplemental insurance. All three major parts of Medicare leave patients with copays, coinsurance, deductibles, and coverage gaps.  Some people are willing to pay those on their own, while others prefer a Medigap policy to eliminate unexpected costs.
• Medicaid generally does not require supplemental insurance, though people in certain groups – such as those who are HIV positive or have end-stage renal disease, for example – may qualify for additional benefits through other programs.

How do I apply for the program?

• Medicare generally does not require an application. When someone becomes eligible for Medicare, they are sent an enrollment packet that tells them how to sign up.  This generally happens when someone turns 65 or has been receiving SSDI payments for two years.
• Medicaid eligibility is determined at the state level, so those who believe they may be eligible for the program need to apply to their state agency. This link to Healthcare.gov can help people start the eligibility process.

We hope this information has helped clear up the differences and similarities pertaining to Medicare vs Medicaid for you. If you have any further questions, please don’t hesitate to contact our experienced Medicare agents!