Though Medicaid and Medicare are both government health insurance options, they aren’t interchangeable programs. Each program has its own eligibility requirements, and you’ll need to be familiar with these requirements before you begin your application. Our guide will help you learn a little more about who’s eligible for each government insurance plan and how you can apply.
What is Medicare?
Medicare is a health insurance policy option that U.S. citizens can access when they reach the age of 65. Medicare is a federal program run by the Centers for Medicare & Medicaid Services. There are no income requirements to receive Medicare insurance.
Though Medicare is primarily for men and women over the age of 65, people who are under the age of 65 and have certain disabilities are also eligible. Those who are in later stages of liver failure and those who are suffering from End Stage Renal Disease and are going through dialysis are eligible as well. 65 is considered a common retirement age; therefore, a lot of people who retire use Medicare since they no longer have access to insurance through their employer nor can they affordably buy private insurance at their age.
Within Medicare, there are multiple parts: Part A, Part B, Part C and Part D. Part A is considered hospital insurance and Part B is Medicare insurance. Part A will cover inpatient medical care and will be premium-free if you are over the age of 65 and you (or your spouse) have been paying Medicare taxes for at least 10 years. There are other exceptions to get Part A with no premiums, which include people who receive Social Security or Railroad Retirement Board benefits, people who are able to receive these benefits but have not filed yet and if the individual, or their spouse, was employed by the government and received Medicare coverage.
Part B covers outpatient medical services, including hospital care, preventative care, physician appointments and certain medical devices, such as oxygen machines and wheelchairs. Part B includes a premium, which is taken from Social Security, Railroad Retirement or Civil Service Retirement checks that you receive on a monthly basis. If you do not receive these benefits, you are billed for Part B every three months.
Part C, also referred to as Medicare Advantage, is a single catch-all Medicare policy issued through approved private insurers. It has similar benefits as Part A and Part B and can sometimes include benefits such as dental and vision for an added cost. Some plans can even cover things like gym memberships and meal delivery services.
Part D is a prescription drug program that is provided by private insurers. Part D provides different levels of coverage, but to join a Part D plan, you must be enrolled in Part A or Part B. All Part D plans cover costs of HIV medications, antidepressants, cancer treatment medications, immunosuppressants, anticonvulsants and antipsychotics.
While Medicare Part A does not come with a premium requirement, many men and women who are on Medicare choose to enhance their coverage using Part D coverage or a Medigap supplemental policy. Most Medicare enrollees pay the standard monthly premium of $170.10 for Medicare Part B. If your income before you retired was at a certain threshold, you’ll also pay a Related Monthly Adjustment Amount (IRMAA) which is added onto your Part B premium.
If you are receiving Social Security benefits, you will be automatically enrolled in Medicare Part A, so you do not need to do anything to apply. If you are under the age of 65 and have a severe disability and receive those benefits, you are also automatically enrolled at the beginning of the 25th month of your disability benefit. If neither of the above apply to you, you can apply for Medicare over the phone or visit the Medicare government website.
What is Medicaid?
Medicaid is a state and federal government program that assists those in low income households with their healthcare expenses. It was signed into law in1965 alongside Medicare, assisting people of all ages with their medical care costs. Eligibility is mainly determined by income, but family size can also play a role in determining your eligibility.
Modified adjusted gross income (MAGI) is used to determine financial eligibility for most single adults, children and pregnant women. Aside from financial eligibilty, you must be a citizen of the United States and a resident of the state you are applying in. In 2014, the Affordable Care Act provided the authority to states to extend eligibility to those under the age of 65 with a household income below 133% of the Federal Poverty Level (FPL).
The federal government sets the Medicaid guidelines, but state and local governments run the programs themselves. Therefore, the programs vary on the state and local levels. The federal and state law must recognize you as being eligible, and your local government may ask for things like pay stubs and tax records to prove that you meet guidelines. Medical payments are sent directly to the healthcare provider.
In some states, you may be subject to a small amount of the cost of any treatments that you receive in the form of a co-payment. Certain individuals may also be charged a small premium or enrollment fee. Those who may need to pay these fees and charges are generally people who have a household income at or above 150% of the FPL.
Children who are 18 years or younger are eligible for Medicaid if the family’s income is limited. Teenagers living on their own are able to apply as individuals. Some states cover children up to the age of 21, so check with your state’s rules before applying.
Though coverage can vary from state to state, some Medicare benefits are federally required and therefore are covered across all Medicaid programs. These benefits include:
- Laboratory and x-ray services
- Inpatient and outpatient hospital services
- Family planning services
- Treatments for children
- Health screenings for children
- Nursing facility expenses for adults
- Surgical dental services for adults
- Home health services
- Transportation to medical care
A few benefits that are optional (which means states can choose to cover them or not) include:
- Prescription drugs
- Physical therapy
- General dental services and dentures
- Optometry services and eyeglasses
- Personal care
- Clinic services
- Respiratory care services
- Services for those aged 65 and above in an institution for mental disease
- Inpatient psychiatric services for those under the age of 21
You can apply for Medicaid through the federal health insurance marketplace or through your state Medicaid agency. You can determine whether you qualify before applying, but you can still apply even if you don’t qualify based on your income.
Though Medicaid may be the only affordable option for low-income families to access medical care services, common frustrations from Medicaid enrollees claim that the system is disorganized and frustrating to navigate.
If you’re considering applying for Medicaid, we recommend taking extra time to ensure that your application is submitted and accepted using the correct channel and to document as much of the application process as possible. Don’t be afraid to follow up with your local Medicaid office multiple times if you’re having trouble applying or renewing your family’s coverage.
Compare Medicare Insurance Plans
When it comes to getting coverage for your health, government insurance programs and private health insurance plans aren’t your only options. Browse a few of our favorite health insurance alternatives below.
Protecting Your Health With the Right Coverage
Now that you understand the difference between Medicare and Medicaid, you can determine if a government health insurance plan is right for your needs. We have a wide range of additional education materials available that can ensure that you’re making the best possible choice for your needs. In particular, we recommend checking our guide to our favorite health insurance options and our favorite Medicare supplemental plans as you compare coverage choices.
Frequently Asked Questions
Is Medicare free?
Medicare Part A does not come with monthly premium expenses. Most men and women will pay about $170 a month for Part B coverage. You might also want to supplement your plan with a Medigap or Part D coverage choice that may carry fees.
What are the disadvantages of Medicaid?
Common Medicaid complaints describe the system as being disorganized and poorly run, and the program has a finite number of doctors accepting coverage. You must also renew your Medicaid policy annually, which can be a hassle.
What is the deductable for Medicare Part B?
In 2022, the average Medicare Part B is $233.