Introduction
Medicare and Medicaid are two separate, government-run programs that were created in 1965 in response to the inability of older and lower-income Americans to buy private health insurance. They were part of President Lyndon Johnson’s “Great Society” vision of a general social commitment to meeting individual social, economic, and health care needs. Medicare and Medicaid are social insurance programs that allow the financial burdens of illness to be shared among healthy and sick individuals, and affluent and lower-income families. Medicare and Medicaid are different in several respects: they are run and funded by different parts of the government and primarily serve different groups.
Medicare
Medicare is an insurance program. Medical bills are paid from trust funds which those covered have paid into. It serves people over 65 primarily, whatever their income; and serves younger disabled people and dialysis patients. Patients pay part of costs through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage. Medicare is a federal program. It is basically the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government.
The Medicare is run by the federal government, its coverage, rules, and regulations are the same across all states.
Medicaid
Medicaid is an assistance program. It serves low-income people of every age. Patients usually pay no part of the costs for covered medical expenses. A small co-payment is sometimes required. Medicaid is a federal-state program. It varies from state to state. It is run by state and local governments within federal guidelines.
The Medicaid is jointly run by states and the federal government,
the program varies across states.
The federal government sets minimum thresholds and each state
establishes its own:
- Eligibility standards
- Type, amount, duration, and scope of services
- Rates of payment
If you are eligible for both Medicare and Medicaid (dual eligible individual), you can have both, and they will work together to provide you with health coverage at a very low cost to you.
Core Differences
The basic difference between medicare and medicaid are illustrated below –
| Medicare | Medicaid |
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A federal insurance program that provides health coverage to individuals age 65 or older or those
under age 65 with a permanent disability.
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A state and federal financial assistance program that provides health coverage for low – income children and adults.
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The Medicare is run by the federal government, its coverage, rules, and regulations are the same across all states.
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Medicaid is jointly run by states and the federal government,the program varies across states.
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People age 65 or older, if they or their spouse –
Non elderly people (Younger than 65) who receive
Social Security Disability Insurance
(SSDI) generally become eligible
after a 2-year waiting period. Individuals with end stage renal disease or amyotrophic lateral sclerosis become eligible immediately.
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Medicaid covers low-income people, children, pregnant women, and aged, blind and/or disabled people who are eligible to receive federally assisted income maintenance payments.
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There are no income or asset limitations.
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Income and asset limits vary by state.
Income limits are generally set in relation to a percentage of the Federal Poverty Level.
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It is paid for through two trust fund accounts, which are primarily funded through payroll taxes and other sources like income taxes paid on Social Security benefits.
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It is jointly funded by the federal government and states.
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Medicare coverage is separated into two parts, A and B. Part A is hospital insurance and helps cover inpatient care in hospitals and skilled nursing facilities, hospice care and home health care. Part B is medical insurance and helps cover doctor visits, outpatient care, durable medical equipment, home health care and some preventative services. There are also Medicare health plans available through private insurance companies. Medicare Advantage Plans, also known as Medicare Part C, cover Parts A and B and extra services that depend on the plan. Medicare Part D plans, which cover prescription drugs, are available as standalone plans or as part of some Medicare Advantage plans. |
Medicaid coverage can vary by state, but some types of services are federally mandated, including:
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