Healthcare costs are on the rise and many Americans find themselves struggling to make payments for medical care. Medicare and Medicaid are two types of medical insurance programs sponsored by the government to offset the cost of care services.
Medicare and Medicaid are oftentimes used interchangeably, even within the eldercare field.
However, there are important differences between these medical insurance programs. While both are government health insurance programs, they offer different benefits to different groups of people.
In this article, we will review the unique benefits of each plan, as well as an overview of who may be eligible for each program.
Medicare is a federal health insurance program for people over age 65 years old, or younger with specific disabilities, such as End-Stage Renal disease. There are four parts of Medicare and two avenues to access these parts.
The parts of Medicare include:
Most people do not pay a premium for Medicare Part A. Medicare Part A covers hospital stays, skilled nursing care (both at home and within a skilled nursing home), and hospice care.
Medicare Part B covers general doctor visits and other outpatient services, including preventative care and some durable medical equipment. Medicare Part B premiums are dependent on your income.
Medicare Part C refers to a Medicare-approved plan from a private insurance company. While Medicare Part C has a premium that the patient will need to pay - it often comes with additional benefits.
Medicare Part D covers the cost of most prescription drugs - including vaccinations. Original Medicare refers to a plan in which the patient pays for services as needed from Part A and Part B.
Medicare Part A and Part B generally do not have copayments, however, you may have a copayment if you have supplemental insurance.
Some individuals will purchase supplemental or co-insurance to cover services and providers not covered by Original Medicare. These plans are purchased through a private insurance company.
Individuals who qualify for Medicare because of a disease, versus their age will receive a Medicare Special Needs plan, also known as a Medicare SNP.
If a person applies for social security or disability benefits, they will automatically be applying for Medicare. If not, they will have to submit an application online. Enrollment for Medicare can happen when the person becomes qualified (turning age 65 for example). However, there is also a yearly Open Enrollment period in which you can adjust plans. This period is from October- December.
In addition to the different Medicare parts listed above, there are also four Medicare Savings Programs for low-income individuals who need extra help. If eligible, these programs may cover the costs of copayments, deductibles, and premiums. You can find the applications for these programs through your state.
The four Medicare Savings Programs are:
If you’re unsure which health plan from Medicare would benefit you and your loved ones the most, it can be helpful to work with a SHIP or SHINE counselor (same concept, different names). These counselors are government-trained volunteers, typically based at a senior center, to help guide you in the Medicare application process.
With research and understanding, Medicare coverage can benefit your loved one and save money in the future.
Medicaid is a health insurance program sponsored by both the federal government and individual state governments. Medicaid eligibility is determined primarily by financial status. It is designed for low-income individuals.
The Affordable Care Act re-established the way in which eligibility is determined. Medicaid financial eligibility is determined by the individual’s Modified Adjusted Gross Income (MAGI).
It’s important to understand that the benefits of Medicaid vary from state to state. However, there are some mandatory benefits required by the federal government to cover.
Applying for the Medicaid program must be done within the state of residence. It can be beneficial to work with a Medicaid Planner or Elder Law Attorney when navigating the Medicaid application process - especially if the individual has assets that may deem them ineligible.
Some individuals may be eligible for both Medicare and Medicaid due to their age and financial status. These individuals are considered “Dual Eligible”.
In this case, Medicaid would cover the cost of Medicare’s premiums and deductibles. Dually eligible individuals also participate in one of the Medicare Savings Plans.
Dual-eligible beneficiaries would receive all the benefits under Medicare, but their Medicaid coverage would be dependent on their income.
Understanding Medicare and Medicaid can help ensure your loved one gets the care and support they need for the best cost.
Laurel McLaughlin has over a decade worth of experience in various sectors of the elder care field- home care, senior living, and non-profits. She has a Master’s in Gerontology and is a certified dementia practitioner.
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