Medicare Vs Medicaid: What's the Difference?
Medicare and Medicaid are government health insurance assistance programs aimed at offering affordable healthcare coverage to the elderly, disabled, people with end-stage renal failure and those with low-income comprehensive. For the elderly, disabled and those with certain conditions, Medicare can help cover hospital costs, medical costs and prescription drugs. Medicaid is required to cover hospital and physician care, lab services as well as home and nurse services for low-income individuals and families. Keep in mind you can have dual coverage with both Medicare and Medicaid. While Medicare is a federal program, Medicaid and its eligibility is decided upon at the state level under federal guidelines.
Below is a comprehensive look at both programs.
Medicare Vs Medicaid: What Are The Differences?
Medicare and Medicaid are both government-run programs designed to help people with medical costs. Medicare Advantage is offered by private insurers. Here are some of the differences between them.
Those with disabilities, those on dialysis, and people over the age of 65
Those who have Medicare Part A and Part B
Low-income families, children, and pregnant women are federally mandated to be covered. Each state can choose to add its own eligible groups
Covers doctor visits, hospital visits, medical equipment, mental health and in-person drug infusions
Covers doctor visits, hospital visits, medical equipment, mental health drug prescriptions, and in-person drug infusions
Doctor visits, hospital visits, medical equipment, mental health, and drug prescriptions are mandatory. Each state may add additional benefits
Depends on whether the individual purchased Medicare Part D, prescription drug coverage.
Vision, hearing, dental, and fitness programs
Depends on the state and local government with the exception of what is deemed as mandatory coverage by the federal government
Cost per month
$170.10 or higher depending on your income
Depends on whether there is a monthly premium for Part A or Part B, size of copay, if you have Medicaid to supplement costs, types of health care services needed
Varies by state government and income.
*Paid from government trust funds
Medicare pays for a monthly fixed amount along with monthly premiums from the insured
State and federal government
Medicare is a federal program that provides several programs, hospital insurance (Part A) and medical insurance (Part B). However, Medicare Advantage (Part C) and Prescription Drugs (Part D) are sold by private insurers, though you must qualify for Medicare at the federal level.
Medicare Advantage rolls Parts A and B into a single plan called Part C. Most Medicare Advantage plans also include prescription drugs through a Medicare supplement known as Part D. Below you will see a breakdown of coverage for each plan.
Note: Part A and B of Medicare is called "Original Medicare."
Hospital Insurance (Part A)
Medical Insurance (Part B)
Medicare Advantage (Part C)
Inpatient care in a hospital
Clinical research: test for new surgical treatments, medicine, diagnostic care, etc.
Inpatient care in a hospital and clinical research: test for new surgical treatments, medicine, diagnostic care, etc.
Skilled nursing facility care
Skilled nursing facility care and ambulance services
Nursing home care (not custodial or long-term)
Durable medical equipment (DME)
Nursing home care (not custodial or long-term) and Durable medical equipment (DME)
Mental health: Inpatient, outpatient, partial hospitalization (PIP)
Mental health: Inpatient, outpatient, partial hospitalization (PIP). Excludes hospice
Home health care
Limited outpatient prescription drugs
Most prescription drugs
Keep in mind there is a difference between an outpatient prescription drug and a typical prescription drug. An outpatient prescription drug is given in response to a hospital visit, usually involving a minor procedure. This would include oral chemo, anti-nausea medication, some oral end-stage renal disease (ESRD) drugs, and certain injectables such as osteoporosis drugs, some antigens, etc. Other medications prescribed by a doctor after a basic visit would not be covered by Part B. Instead, you would need to pay out-of-pocket or buy the Medicare supplement coverage, Part D. This coverage can be purchased separately along with Original Medicare and usually comes with most Medicare Advantage plans.
Now, if you do have dual coverage with both Medicare and Medicaid, Medicaid will likely cover the cost of a prescription should your Medicare not cover the expense. It may also take care of vision and dental.
What Is Medicare Advantage?
Plan C, or Medicare Advantage, is offered by private health insurance companies that have been approved by Medicare and follow Medicare's guidelines. This coverage includes Plan A, Plan B, and often Plan D prescription drug coverage. In order to help with prescription costs, Medicare offers a tier system:
Tier 1—lowest copayment, covers most generic prescription drugs
Tier 2—medium copayment, covers preferred, brand-name prescription drugs
Tier 3—higher copayment, covers non-preferred, brand-name prescription drugs
Specialty tier—highest copayment, covers high-cost prescription drugs
Note: Preferred brand-name drugs refer to drugs that aren't necessarily available in a generic form.
It is possible to apply for an exception should there be a name-brand medication your doctor requires you to have, even if there is a similar drug in a lower tier. This exception would lower the copayment for the medication. Keep in mind something called a "donut hole." This refers to the temporary limit on what Part D will cover. The Affordable Care Act has helped to close this gap by offering discounts on brand-name and generic prescription drugs.
What Is Medicaid?
Medicaid is a public insurance program that provides health coverage to low-income families and individuals. This includes adults, children, seniors, and those with disabilities – even people on Medicare.
Medicaid covers hospital and physician care, lab services, and home and nurse services. Prescription drugs are also covered in all states under Medicaid. Other benefits such as vision, dental care, personal care services, and hearing aids are usually covered as well.
Medicaid is jointly funded by both the state government and the federal government, so it operates differently from state to state. However, all states must still use federal guidelines. Federal guidelines are broad, so states have flexibility in how their programs look and operate. This means eligibility and benefits will look different from one state to another. Keep in mind the Affordable Care Act expanded Medicaid to families with an income either at or below 133 percent of federal poverty guidelines regardless of age.
While Medicaid is operated at the state level, there are coverages every state is required to offer through Medicaid. Below is a list of required services as per Medicaid.gov:
Inpatient hospital services
Outpatient hospital services
EPSDT: Early and Periodic Screening, Diagnostic, and Treatment Services
Nursing Facility Services
Home health services
Rural health clinic services
Federally qualified health center services
Laboratory and X-ray services
Family planning services
Nurse Midwife services
Certified Pediatric and Family Nurse Practitioner services
Freestanding Birth Center services (when licensed or otherwise recognized by the state)
Transportation to medical care
Tobacco cessation counseling for pregnant women
Speech, hearing and language disorder services
Respiratory care services
Other diagnostic, screening, preventive and rehabilitative services
Other practitioner services
Private duty nursing services
Services for individuals Age 65 or older in an institution for mental disease (IMD)
Services in an intermediate care facility for Individuals with Intellectual Disability
State Plan Home and Community Based Services- 1915(i)
Self-directed personal assistance services- 1915(j)
Community first choice option- 1915(k)
TB Related Services
Inpatient psychiatric services for individuals under age 21
Health homes for enrollees with chronic conditions – Section 1945
Can You be Covered by Both Medicare and Medicaid?
You can be covered by Medicare and Medicaid. This is called a dual-eligible beneficiary. People with dual coverage fall into "partial duals" or "full duals."Those disabled and working with an income above the state's full Medicaid threshold but below 125 percent of the federal poverty level (FPL), or 200 percent FPL can qualify for these cost-sharing benefits. Below is a list of the different dual coverage types as per Medicaid.gov:
Qualified Medicare Beneficiary (QMB) program. This program helps pay for Part A and Part B premiums as well as deductibles, coinsurance, and copayments.
QMB Plus. QMB benefits and full Medicaid benefits are provided.
Specified Low-Income Medicare Beneficiary (SLMB) program. Supports the payment of Part B premiums for those with an income greater than 100 percent FPL but less than 120 FPL.
SLMB Plus. SLMB program and full Medicaid benefits are provided.
Qualified Disabled Working Individual (QDWI) program. Supports those who lost their Medicare Part A coverage after returning to work so they can buy back these benefits while having an income up to 200 percent FPL.
Qualifying Individual (QI) program. Offers Medicare Part A benefits to those who have an income of 120 percent FPL but less than 135 percent FPL. There is an annual cap on available money.
Pharmacy duals. Cost-sharing like premiums, deductibles, etc., are covered by Part D for prescriptions up to a limit.
Make Sure You're Covered
Both Medicare and Medicaid are government programs that offer health insurance. Medicare can help cover hospital costs, medical costs, and prescription drugs for the elderly, disabled, and those with certain conditions such as end-stage renal failure. Medicaid is for low-income families and is required to cover hospital and physician care, lab services as well as home and nursing services.Medicaid will have different eligibility and coverage depending on the state. It is also possible to have dual coverage if you're eligible for both Medicare and Medicaid.
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