What’s the Difference between Medicare and Medicaid?
What’s the Difference between Medicare and Medicaid?
Medicare and Medicaid are two government-sponsored healthcare programs available in the U.S. In the simplest terms, the main difference between Medicare and Medicaid is their eligibility requirements: Medicare is based on age, and Medicaid is based on financial need.
- Medicare, which is funded by the federal government, is a health insurance program available to several qualifying groups, including people 65 and older and individuals with certain disabilities.
- Medicaid, which is jointly funded by federal and state governments, is an assistance program that covers some medical and long-term care costs for qualifying, low-income individuals. Eligibility and distribution of benefits varies by state. Some people are eligible for both Medicare and Medicaid.
Medicare at a glance
- The primary requirement for Medicare eligibility is age (65+).
- Medicare is the leading health insurance provider for people over 65 years old, since most of these individuals are retirement age and no longer receive benefits, including health insurance, through an employer.
- There are four different plans offered through Medicare that vary in their cost and coverage. They include Part A, Part B, Part C, and Part D.
Types of Medicare coverage
Part A and Part B
Original Medicare, which includes Parts A and B, is a fee-for-service plan that works like traditional health insurance. Individuals are responsible for coinsurance and deductibles.
Part A is hospital insurance, and it typically covers inpatient services including:
- Hospital care
- Skilled nursing care
- Nursing home care
- Hospice care
- Home health care
You qualify for Medicare Part A if:
- You and/or your spouse have worked and paid Medicare taxes for a minimum of ten years.
- You are receiving or are eligible to receive Social Security benefits. (You are automatically enrolled in Part A.)
- You and/or your spouse had Medicare-covered government employment.
Part B is medical insurance that addresses two types of care including:
- Medically-necessary care: Services or supplies needed to diagnose and/or treat a medical condition.
- Preventive care: Health care that prevents illness and screens for diseases.
Covered outpatient services include:
- Ambulance services
- Doctor office visits
- Mental health care
- Certain durable medical equipment
- Limited outpatient prescription drugs
You qualify for Medicare Part B if: You qualified for Medicare Part A.
Parts A and B do not cover:
- Long-term care
- Most dental care, including dentures
- Eye exams where glasses are prescribed
- Cosmetic surgery
- Hearing aids and related exams
- Routine foot care
Part C allows individuals to opt into coverage from Medicare-approved private insurers. Also known as Medicare Advantage, these plans may cover services not covered by Parts A and B. In addition to the services included in Parts A and B, Part C also includes coverage for:
- Dental care
Part D is an add-on that offers prescription drug coverage and is paid for out-of-pocket by the enrollee. Individuals are responsible for monthly premiums, copayments, and deductibles.
Compare Medicare coverage: You can compare all coverage options available to you and/or your loved one using Medicare.gov’s search tool.
Medicaid at a glance
- Medicaid eligibility is strict and based on income. Only individuals who are considered low-income are eligible. In 2021, the cut off is a monthly income of less than $2,382 for individuals and a combined monthly income of $4,764 for married couples.
- Medicaid recipients are eligible for a variety of inpatient and outpatient services at no personal cost.
- The Affordable Care Act, enacted in 2010, expanded Medicaid’s coverage to adults with income below 138% of the poverty line in participating states.
To see a breakdown of Medicaid eligibility levels by state, visit Medicaid.gov.
Common questions family caregivers have about Medicare and Medicaid
There are two main reasons family caregivers need to understand the difference between Medicare and Medicaid: To navigate the application process and learn how benefits are administered and to identify the ways they can get paid for their care work through these programs.
Q: Does Medicare pay family caregivers?
A: No. Because Medicare does not pay for long-term care services, neither direct care providers nor family members are eligible for reimbursement.
Q: Does Medicaid pay family caregivers?
A: Family caregivers may, in certain circumstances, be able to seek financial assistance through Medicaid. Self-directed Medicaid services for long-term care are available in all states, including the District of Columbia, though program names, eligibility, and coverage vary by state. Self-directed means that qualified enrollees can manage their own home-care services rather than going through an agency. It is through this waiver that Medicaid recipients may be able to hire a family member to provide their care.
Q: Does being married affect Medicaid eligibility?
A: If a married applicant is applying for long-term care or nursing home care, they are typically treated as a single applicant and their spouse’s income will not affect their eligibility. However, if the well spouse’s income exceeds the level set by their state, he or she may be required to make monetary contributions toward their spouse’s care.
Q: How much money can a spouse earn from Medicaid?
A: The Minimum Monthly Maintenance Needs Allowance is a Medicaid rule that aims to prevent the well spouse from impoverishment. If the well spouse doesn’t earn enough income to cover certain living expenses, the Medicaid spouse may be able to direct a portion or all of their monthly income to the well spouse.
- Visit the Centers for Medicare and Medicaid Services for more information about these programs including how to apply.
- If your household earns too much to qualify for Medicaid but your child is in need of more affordable care, you may be able to get health coverage through the Children’s Health Insurance Program.
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