According to the Department of Health and Human Services, the key difference between Medicare and Medicaid is that Medicare is an insurance program, while Medicaid is an assistance program. Medicare serves older adults who have paid into the fund during their working life, no matter their income, and Medicaid provides assistance to low-income residents.
The similar name and function of the two programs mean that it’s easy for people to be confused about what they offer, how they work and what the different eligibility requirements are. Thankfully, there are resources that can help older adults determine if they can access Medicare or Medicaid.
Medicare is a federal program that offers health insurance to people over 65 and those who have a disability or are on dialysis. People pay into a trust fund over their working life, and this pays for their medical bills when they reach 65.
Medicare Part A provides hospital cover and is premium-free if a senior or their spouse paid Medicare taxes for at least 10 years. Part B covers non-emergency healthcare, such as doctor appointments, and beneficiaries pay a small premium for this coverage. Together, Part A and Part B are also called Original Medicare. For a small fee, beneficiaries can also access Part D, which helps pay for prescription medication.
Part C is known as Medicare Advantage and is an alternative to Original Medicare. It combines Part A and B into one product offered by private health insurance companies. These policies often include extras not normally included in Medicare and give beneficiaries more choice in their health insurance.
Medicaid is an assistance program that helps low-income people access healthcare. It’s jointly funded by federal and state governments, but it’s administered by the state. This means the name of the program and the eligibility criteria can differ depending on where you live.
Applicants must have income and assets lower than certain limits to be eligible for the program. These limits vary by state. In some states, you must also meet other criteria, such as being elderly, blind, disabled or pregnant. Other states have expanded coverage since the Affordable Care Act was passed and now offer coverage to all low-income residents.
The law mandates that all states must provide certain benefits such as hospital, physician and home health services. Some states offer additional services like physical therapy and prescription drugs. Many also have waiver programs that offer tailored benefits to people with certain health conditions, such as providing assisted living or additional home health care to older beneficiaries.
It is possible for seniors to access both programs, which is known as being dual-eligible. All state governments have trained counselors available to help seniors assess their eligibility, apply for programs and choose policies. This counseling is provided through the state health insurance assistance program, or SHIP, and can usually be accessed through local Area Agencies on Aging.