Though they sound similar in name, Medicare and Medicaid are two completely different
programs in almost every aspect. The differences between each are important and should be understood in order to know which one you qualify for and when you can start each program. To help with your planning process and to make things easier, we’ve outlined each program below as well as both their differences and similarities.
What Is Medicare
Essentially a federally run insurance program, Medicare is a trust fund that you have paid into during your working life. With each of your paychecks a little bit of money was allocated to Medicare. That money went into a fund that is used later to help you pay for medical bills. Those who can access the fund are people aged 62 and older as well as those who are younger and considered disabled. Dialysis patients also have access to Medicare money, no matter the age of the person. However, it is important to note that Medicare does not cover all medical expenses, leaving the patient in charge of covering the cost of hospital deductibles and other related small costs. Medicare is also pretty universal throughout the United States with little to no difference between states.
Another important aspect of Medicare is its coverage and plans. In total, there are three different plans- Part A, Part B and Part D. Part A covers hospital and post hospital charges as well as needed home health care. Part B covers doctor and lab fees and outpatient care. The last part, Part D, simply covers prescriptions drugs.
What Is Medicaid
Another federally run program, Medicaid serves as an assistance program for those with low incomes. Medicaid, unlike Medicare, is available to those of all ages and patients generally pay little or no part of the medical expenses. However, sometimes a small co-payment is required. Another thing to keep in mind is that Medicaid rules and guidelines do change state to state and is run primary by state and local governments under the watchful eye of the federal government. Even though this program is run locally, local governments still have to adhere to federal laws and regulations.
When looking at Medicaid, you’ll find that it covers basic health care costs that include hospital stays, doctor visits and the like. In addition, it can also cover odd expenses such as eyeglasses.
The Differences Between Medicare and Medicaid
When searching for the right coverage, you’ll find that both programs are widely different. Some of the more important differences include:
• Medicare is a federal program while Medicaid is both a federal and state program.
• Medicare provides coverage to those 62 or older or those with a severe disability while Medicaid provides health coverage to those with a very low income, no matter your age.
• Medicare doesn’t take into account what your income level is while Medicaid does.
The Similarities Between Medicare and Medicaid
Even though there each an entirely different program, there are still some notable similarities between the two:
• Both are Federal programs.
• Both were created in 1965.
• Both are social insurance programs.
• Both help finance medical expenses for those in need.
Again, it is important to understand that even with a few key similarities, each program stands on its own. Though you can use both programs, most people have one or the other.
Having Both Medicare and Medicaid Coverage
As mentioned above, most people use one program or the other, but that’s not always the case. There are instances where one will be eligible for both Medicare and Medicaid. When this happens, you’ll find that one program picks up where the other left off. For instance, Medicaid generally comes into play to help pay for long term care, an area that Medicare does not cover. Sometimes Medicaid will also cover some or all of Medicare’s out of pocket costs, which is very helpful for those with little income or retires with little savings.
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