Knowing the Difference between Medicare and Medicaid

Both are government healthcare plans

Medicare

• Requires a payment of premiums in certain cases
• Founded in 1965 to cover some of the costs associated with health care for older Americans and those with certain disabilities.
• An insurance program administered by the Center for Medicare and Medicaid Services, an agency of the federal government.
• Usually eligible for Medicare after 10 or more years of paying Social Security taxes. Age 65. U.S. citizen or permanent resident
• Under 65 with end stage renal disease or certain disabilities

Two parts of Medicare

Part A

Covers hospital benefits

Available at age 65 without paying premiums if:

• You are already receiving retirement benefits from Social Security or the Railroad Retirement Board
• You are eligible to receive Social Security or Railroad benefits but have not yet filed for them.
• You or your spouse had Medicare-covered government employment.
• If you are under 65, you can receive Part A iwithout having to pay premiums if:
• You have received Social Security or Railroad Retirement Board disability benefits for 24 months.
• You are a kidney dialysis or kidney transplant patient (after 28 months)

Part B

Covers all other medical care

If you qualify for Part A without paying a premium, you must pay monthly premiums for Part B if you want it.

• Care outside of hospitalization
• Physician/surgeon services
• Outpatient services
• Ambulances
• Physical therapy
• Mental health
• Some medical supplies and equipment
• Does not cover routine checkups, hearing aids or other “extras”
• Limited benefits to pay for long term care.
• Aids individuals with limited retirement savings who could become financially crippled if long-term care becomes necessary.
• Where you live will determine your access to a Medicare Managed Care plan or a Private Fee-for-Service plan.

Options include:

Medicare managed Care plans which are similar to HMOs. Usually you can only go to doctors or hospitals that are in their system and you need a referral to see a specialist. These plans have to cover all Part A and Part B benefits. Some also cover extras, such as prescriptions, dental services and eye exams.

Private Fee-for-Service plans are available in some areas of the country and are usually called “Medicare + Choice” plans. They are offered by private insurance companies instead of the federal government. Medicare then pays a set amount of money each month to the insurance companies to provide the coverage. Then the insurance companies cover members’ health care including the processing of payments and deductibles. One advantage of this type of plan is that they often provide extra benefits.

Medigap policies may also be available to purchase supplemental coverage called Medigap insurance. Medigap is available only to people who are enrolled in Medicare. Medigap coverage may help you lower your out-of-pocket expenses by covering co-payments and deductibles and also by offering enhanced benefits. You don’t need Medigap and often it is illegal for a company to sell it to you if you already have coverage under a Medicare Managed plan, Private Fee-for-Service plan, Medical Savings Account, Religious Fraternity Benefit Plan, or Medicaid.

Medicaid

Designed to provide health and long-term care for elderly and disabled people whose income is below poverty level and for low-income families with children.

To qualify for Medicaid benefits, recipients must exhaust all income and assets, including cash savings, all types of investments, and real estate toward their medical bills.

You may keep your house if there is a reasonable chance you will return home or if your spouse or dependent child is living in the home. Medicaid is only for those in the direst of financial circumstances.