Many people are confused between the two government programs called Medicaid and Medicare. While Medicaid deals with financial security, the latter offers medical insurance. Both these programs can help in curtailing your medical costs and saving money. Here, we try to enlist the differences between the two.
Did you know?
President Lyndon B. Johnson introduced both Medicaid and Medicare services in 1965 as a part of his Social Services Programs.
Today, Medicaid and Medicare has helped numerous individuals deal with their financial problems and medical expenses. The basic difference between these programs is that Medicaid is provided to people who have low income, are aged, disabled or have families with dependent children. While Medicare is a national health insurance program. Following are some FAQs which will help you in understanding the clear distinction between both programs.
$ What type of programs are these?
Medicaid ~ Financial assistance and social security
Medicare ~ Health and medical insurance
$ Which government body runs these programs?
Medicaid ~ Federal and State government
Medicare ~ Federal government
$ What is the key difference?
Medicaid ~ Caters to families and individuals with small or low income.
Medicare ~ Caters to individuals above 65 years of age, people with disability and individuals in the advanced stage of a renal disease.
$ How many people have enrolled in these programs?
Medicaid ~ 40 million (2007)
Medicare ~ 44 million (2008)
$ How much do these programs cost to the government?
Medicaid ~ In 2007, it amounted to $330 billion (2.4% of GDP)
Medicare ~ In 2007, it amounted to $432 billion (3.2% of GDP)
$ What do these programs cover?
Medicaid ~ In-patient and out-patient healthcare coverage, services and costs, prescription drugs, and diagnostic and preventive care.
Medicare ~ Part A covers hospital insurance, Part B covers medical insurance and Part D covers some cost of prescription drugs.
$ What is the eligibility criteria?
Medicaid ~ Individuals receiving Supplemental Security Income (SSI), people who fall under the low-income group, individuals of and above 65 years of age (Are also covered by Medicare), individuals with disability, are over 65 years and suffer from vision impairment are covered under Medicaid. It also covers pregnant women, children under 6 years of age (Family income at or below 133% of the Federal poverty level), children between the ages 6 and 19 (Family income below Federal poverty level), teenagers up to the age of 21 who are living on their own, and adults who are taking care of children below 18 years of age.
Medicare ~ People who are US citizens (or have been permanent legal resident for 5 continuous years) and are eligible for Social Security Benefits, and have worked for at least ten years in a job that has paid money into the Medicare system are covered under Medicare. Also, individuals aged 65 years and above, who are on Social Security Disability and those suffering from permanent kidney failure can avail the benefits of Medicare.
$ Are the rules for the programs same throughout USA?
Medicaid ~ No, the rules differ from state to state, as it is run by state and local governments as per Federal guidelines.
Medicare ~ Yes, the rules are same throughout USA, as it is run by Centers for Medicare and Medicaid Services.(An agency of the United States Department of Health and Human Services)
$ Which funds are utilized for these programs?
Medicaid ~ Federal, State and Local Tax funds
Medicare ~ Trust funds (For which you have paid)
$ Where can we get more information about these programs?
Medicaid ~ Contact your State Medical Assistance (Medicaid) Office as the eligibility rules vary from state to state.
Medicare ~ Visit the Social Security Office.
$ Are nursing home expenses covered?
Medicaid ~ Yes. Currently, about 60 percent of all nursing home residents are covered by Medicaid.
Medicare ~ Yes. (But only under certain conditions)
$ Do you need to pay part charges?
Medicaid ~ No, part payment is not required for expenses covered under the program.
Medicare ~ Yes, part payment through deductibles is required for hospital and allied costs.
$ How are the claims processed for reimbursement?
Medicaid ~ Claims are to be filed for approval before the charges have been incurred.
Medicare ~ Reimbursement claims are to be filed after the charges have been incurred.
$ Do you need to qualify an income or asset test ?
Medicaid ~ Yes
Medicare ~ No
$ When does the program begin?
Medicaid ~ Unpaid bills over a period of 3 months before availing Medicaid coverage can also be paid through Medicaid.
Medicare ~ Many individuals are automatically enrolled in part A and B when they reach 65 years of age. Individuals who receive Social Security Disability Insurance (SSDI) can get Medicare after two years.
$ What is the total fund contribution?
Medicaid ~ Federal government and State contribute about 50% each. However, Federal government may reduce the percentage of sponsorship in wealthy states.
Medicare ~ It is entirely sponsored by Federal government.
$ What is the percentage of cost that will be covered?
Medicaid ~ 100% of the eligible cost.
Medicare ~ 80% of the cost.
$ Do these programs cover medication?
Medicaid ~ Yes.
Medicare ~ No. (Except in case of hospitalization)
$ Do these programs pay for assisted living, residential and adult foster care?
Medicaid ~ Yes. (It is valid in many States)
$ Do these programs allow the benefit of in-home care?
Medicaid ~ Yes, in most States, expenses incurred on account of charges for in-home caregivers who attend to people with long-term requirements are covered.
Medicare ~ No, expenses incurred on account of caregivers attending people with long-term needs at their homes are not covered.
$ How does the program pay the doctors?
Medicaid ~ It does not pay higher charges than Medicare.
Medicare ~ It pays higher charges than Medicaid.
$ Do doctors prefer these programs?
Medicaid ~ No
Medicare ~ Yes
$ Which is the last year for a provider to initiate the Electronic Health Record (EHR) incentive pro
Medicaid ~ 2016
Medicare ~ 2014
$ What is the maximum Electronic Health Record (EHR) incentive?
Medicaid ~ $63,750 (Over 6 years)
Medicare ~ $44,000 (Over 5 years)
$ Are additions to the definition of Meaningful Use (MU) allowed?
Medicaid ~ Yes, State Medicaid programs can add additional requirements.
Medicare ~ No, Medicare has a common pre-defined definition.
Though Medicaid program seems to be financially rigid, it is a good option for families who are facing a financial crunch. The most notable benefit of Medicaid program is that it covers the cost of a wide range of activities like preventive services, immunizations, prenatal care, hospitalization and emergency services. Medicare benefits too are equally good, however, they are mostly beneficial for the elderly. Apart from availing individual Medicaid and Medicare, few individuals are also eligible to utilize benefits of both programs. They are known as Medicare Dual Eligibles. Avail the best program in the US health care system based on your requirement and eligibility for optimal utilization of these services.