Medicare vs. Medicaid: Key Differences and What Is Covered
Understanding Government Health Programs: Medicare and Medicaid
Medicare and Medicaid have similar names, so people often get confused about what each program covers. In some cases, people may be eligible to be covered by both programs.
You also have options in coverage, which makes understanding these two programs even more confusing, but understanding the differences and how these two programs work can save you money on your health care costs.
Key Differences Between Medicare and Medicaid
- A key difference between Medicare and Medicaid is that one is primarily age-based, and the other is income based benefiting people with limited financial resources, regardless of age.
Medicare is a federal government health program available to people aged 65 and older, or under 65 with certain medical disabilities or diseases.
Medicaid is a jointly run state and federal government health program whose eligibility is based on income rather than age or disability. Medicaid was developed to help people and families with limited financial resources get health care.
- Medicare applies to the qualified individual, not the entire family. Medicaid applies to the family situation, so if one member is covered, all members of the family would qualify for Medicaid.
- You can apply for Medicaid at any time your situation warrants it, you do not have to wait for an open enrollment period. In most cases, people who qualify for Medicaid may be exempt from the individual penalty. See the eligibility criteria below. Whereas, when you apply for Medicare outside the open enrollment period you may be penalized.
- Medicaid coverage and eligibility varies from state to state due to the fact that it is both federally and state managed. Medicare basics are standard.
Differences in Dental and Vision Care in Medicare vs. Medicaid
Medicare plans A and B do not include dental care like cleanings, fillings, tooth extractions, dentures, dental plates, or other dental devices, whereas Medicaid may cover preventative dental care for adults in some states, as well as treatment in others. This varies by state but can be a definite advantage over Medicare alone.
- Under certain special circumstances, Medicare Part A may cover dental care if received in a hospital. This would not normally include your standard dental care.
- Medicaid covers dental care for children.
Vision Care like eye exams, optometry care or glasses may be covered by Medicaid in most states, whereas Medicare may include a basic vision test as part of Medicare Part B coverage in the “Welcome to Medicare” preventive visit or the yearly “Wellness” visit.
Sources of Help to Understand Medicare and Medicaid Options
Trying to understand all the information about Medicare or Medicaid can be very confusing. There are many programs available and making the right choice is often hard. There are thankfully many places to get free information to help you make good decisions. There are also additional programs that may be available depending on what needs you have.
State Health Insurance Assistance Programs (SHIP)
State Health Insurance Assistance Programs (SHIP) provide free, in-depth, non-biased, information to help people understand their coverage and government program options which can help save money. You can find out if there is a local SHIP office near you, or get contact information from the SHIP website.
Understanding Medicaid Coverage
Medicaid may provide free or low-cost health care to low-income individuals and families, pregnant women, seniors and people with disabilities.
According to The Kaiser Family Foundation, 20 percent of people in the United States were covered by Medicaid/CHIP in 2015:
Medicaid and the Children’s Health Insurance Program (CHIP) provide health and long-term care coverage to more than 74 million people in the United States
Medicaid federal rules specify certain mandatory benefits and each state may choose to offer optional benefits in addition to the basics. Because Medicaid is ultimately managed by each state, the state may determine the scope of the optional benefits as well as eligibility criteria.
How to Qualify for Medicaid
Medicaid coverage is different than Medicare because it is based on financial eligibility and not age. The following criteria are taken into consideration when looking at qualifying for Medicaid:
- Household size
- Family status
People who may be eligible for Medicaid may include Pregnant women, teenagers living alone, parents of sick children, people with high medical costs, blind or disabled people, or low-income level families or individuals.
The way the financial eligibility is determined varies by state. Some states that have "Expanded Medicaid" include higher income levels in their eligibility criteria than states who have not expanded Medicaid.
Examples of the Basic or "Mandatory" Medicaid Benefits
Here are some examples of basic essential services that may be included in Medicaid:
- Hospitalization and clinic treatment
- Laboratory and x-ray services
- Doctor services, nursing services, medical and surgical dental services
- Family planning and midwife services
- Nursing facility services for people aged 21 or older
- Home healthcare for people eligible for nursing facility services
- Pediatric and family nurse practitioner services
- Screening, diagnosis and treatment services for persons under age 21
"Dual Eligible" Can You Have Medicare and Medicaid?
People who have Medicare may also qualify for Medicaid and use Medicaid to help pay the monthly premiums and out-of-pocket expenses like deductibles of their Medicare program. If you qualify for both you are "Dual Eligible"
Medigap is another form of supplemental health plan for Medicare that may help cover co-pays and deductibles if you do not qualify for Medicaid.
Understanding Medicare Coverage Options
You can get Medicare from the government, or through private insurance. Taking Medicare through a private insurance, such as in the case of the Advantage Plan, may allow you greater options in your care, for example, learn more about different health insurance types here.
- Medicare Part A covers hospital services and is usually free. However, you may pay for Medicare part A in some circumstances, for example, if you did not work long enough.
- Medicare Part B covers medical services, there is a cost associated with Part B coverage.
Medicare Parts A and B do not cover dental care, this may be covered by an additional supplemental health insurance plan.
- Medicare Part C, could be a little confusing because it covers parts A and B, and may even include prescription drug costs. Medicare part C is what is known as an Advantage Plan. You may be able to get an Advantage Plan that could also offer vision and dental care. Be sure and check all your options when researching an advantage plan.
- Medicare Part D covers prescription drugs
If you want to access a list of what Medicare may cover, you can check this list of Medicare test, service or item coverages for detailed info.
How to Qualify for Medicare: Eligibility for Parts A, B, and C
Medicare Part A Eligibility: You must be 65 years or older. You may qualify for Medicare if you are under 65 with certain disabilities or conditions, end-stage renal disease or Lou Gehrig's disease. If you are disabled and receiving social security benefits for more than 24 months, you may be enrolled in Medicare Part A automatically.
Medicare Part B Eligibility: If you qualify for Part A, then you usually have met the same criteria to Qualify for Part B.
TIP: Medicare Part B is optional so make sure and sign up for it in time or you may pay a penalty for singing up after enrollment.
Medicare Part C (Medicare Advantage Plans) Eligibility: In order to be eligible for Part C, you must meet the criteria of A and B, however, you may not have: end-stage renal disease or require hospice care. You can switch from a Plan A and B to a Plan C during the enrollment period. If you wish to change out of the enrollment period, you may be penalized.
Read more about Medicare in An Introductory Guide to Medicare Parts A, B, C, and D or details about The Federal Poverty Level - Guidelines and charts here.
Medicare Savings Programs and the Medicare Extra Help Program
There are several kinds of Medicare Savings Programs that may help if you are not eligible for Medicaid. It is worth looking into these to see if you qualify. You may also be interested in looking into the Medicare Part D Low Income Subsidy for Prescription Drugs: The Medicare Extra Help program.
Medicaid Facts and Information
Kaiser Family Foundation's Medicaid Pocket Primer offers extensive information and a strong overview of the importance of the Medicaid program in the United States and data about the various people who benefit from coverage.