Difference Between Medicare and Medicaid?
Although they have very similar sounding names, there are many differences between
Medicare and Medicaid. While each of these government sponsored programs was established
in 1965 – and each was primarily designed for helping to cover various types of health care
expenses – both the actual coverage, as well as the requirements for eligibility for enrollees
What is Medicare?
Medicare is considered to be a national social insurance program. It is federally sponsored. The
program covers certain health care expenses for all U.S. citizens – as well as legal residents of
five years or more – who are age 65 or older, or who are under age 65 and qualify for benefits
based on various health conditions. The Medicare program does not base a person's eligibility
on the amount of assets or income that a person has.
There are four parts to Medicare. These include the following:
Part A – Hospitalization. Medicare Part A provides coverage for hospitalization services.
Many people receive Medicare Part A premium free, provided that they paid taxes into
the Medicare program throughout their working lives.
Part B – Doctors' / Medical Services. Medicare Part B covers physicians' services and
certain other types of medical related expenses. There is a monthly premium that is
charged for Medicare Part B. With coverage under Medicare Parts A and B, enrollees
can generally receive their health care services from the provider of their choice.
Medicare Part A and Part B are referred to as "Original Medicare."
Part C – Medicare Advantage. Medicare Part C, or Medicare Advantage, is actually an
alternative to Medicare Parts A and B. This part of Medicare is run in a similar fashion to
an HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization)
where participants must typically see providers that are within a particular network. In
return, costs are usually lower.
Part D – Prescription Drug Coverage. Medicare Part D provides coverage for prescription
drugs. Part D is also sold by private insurance companies. Therefore, there are
numerous options to choose from and enrollees can choose from either very basic or
What is Medicaid?
Medicaid is also a government sponsored program. However, this program is jointly funded
between the federal government and each of the individual states. Medicaid provides health
care services, as well as long-term care, to low income individuals. This program is actually the
largest source of funding for health and medical services for those with low income in the U.S.
Those who may qualify for Medicaid coverage can include:
Low income families who have children
Certain low income pregnant women and their children
Low income seniors who are age 65 or over
Individuals who are blind
Disabled individuals who are also receiving Supplemental Security Income (SSI)
Individuals who have extremely high medical bills
Medicaid may also pay various expenses for skilled nursing home care, as well as for home care
costs for seniors who have a low amount of income and a limited amount of assets. In most
cases, such individuals must meet their individual state's definition of the poverty level. (This
varies from state to state).
Can You Qualify for Both Medicare and Medicaid Benefits?
In some cases, an individual may qualify for both Medicare and Medicaid. These individuals are
referred to as "dual eligibles." In these cases, a person will typically receive Medicare Part A and
Part B, as well as full Medicaid benefits, where Medicaid will pay for part or all of the person's
Medicare deductibles, copayments, and coinsurance. In some cases, a dual eligible may even be
covered with benefits that aren't offered by Medicare such as dental, vision, and hearing.