As we age, the issue of healthcare and coverage is important. We want to know our needs can be met and we have the resources to do that. We want to rest assured that when we are sick, we can find help, and we can take an active role in preventing illness and living our healthiest lives. We want to know we can get our prescriptions filled, we can see our doctor and if we need a hospital stay, it’s covered.
For many Americans, healthcare benefits include Medicare. But there are many myths about Medicare and a great deal of confusion about Medicare vs. Medicaid.
What are these programs? What benefits do they provide? Who uses these programs? Who is eligible for these benefits? And what are the differences between the two?
As we navigate our health into the second half of life, paying close attention to our finances and resources, both programs play a role in the wellbeing of Americans.
What is Medicaid?
Medicaid is a healthcare program providing health coverage to millions of Americans each year. The program offers benefits to eligible low-income adults, children, elderly adults, pregnant women and people living with disabilities. In 2022, nearly 88 million Americans were enrolled in Medicaid and in the CHIP program (Children’s Health and Insurance). In the fiscal year 2017, state and federal governments spent $600 billion on Medicaid and CHIP benefits.
Medicaid is funded by both the states and federal government and administered by states. The federal government sets the core requirements and eligibility benefits, and states have flexibility in how they administer the program while adhering to federal guidelines. This means that Medicaid benefits may be different depending on how each state administers the benefits.
Medicaid provides healthcare coverage to 1 in 5 Americans and children account for 43% of Medicaid enrollees.
What does Medicaid Cover?
According to the NC Department of Health and Human Services, Medicaid provides benefits for the following:
- Doctor Bills
- Hospital Bills
- Prescriptions (Excluding prescriptions for Medicare beneficiaries)
- Vision Care
- Dental Care
- Medicare Premiums
- Nursing Home Care
- Personal Care Services (PCS), Medical Equipment, and Other Home Health Services
- In-home care under the Community Alternatives Program (CAP)
- Mental Health Care
- Most medically necessary services for children under age 21
For a more extensive list of services covered by Medicaid, see here.
What is Medicare?
Medicare is a federal health insurance plan for:
- people 65 years and older
- certain people under the age of 65 with disabilities
- people with End-Stage Renal Disease (ESRD)
There are four parts of Medicare including:
- Part A inpatient/hospital coverage
- Part B outpatient/medical coverage
- Part C Medicare private health plans (Medicare Advantage)
- Part D prescription drug coverage
The percentage of Americans covered by Medicare has increased steadily between 1990 and 2021. In 1990, 13% of Americans were covered by Medicare. By 2021, the number rose to 18.4%. As of September, 2022, over 65 millions Americans were enrolled in Medicare. Roughly 35 millions were enrolled in Original Medicare, and another 30 million were enrolled in Medicare Advantage plans.
What does Medicare cover?
Medicare Part A covers the following:
- Inpatient hospital care
- Skilled nursing facilities
- Lab tests
- Home health care
Medicare Part B covers the following:
- Doctor and other healthcare providers’ services and outpatient care
- Durable medical equipment
- Home health care
- Some preventative services
Medicare doesn’t cover all medical needs. Some of what Medicare may not cover includes:
- Long-Term Care (also called custodial care)
- Most dental care
- Eye exams (for prescription glasses)
- Cosmetic surgery
- Massage therapy
- Routine physical exams
- Hearing aids and exams for fitting them
- Concierge care (also called concierge medicine, retainer-based medicine, boutique medicine, platinum practice, or direct care)
- Covered items or services you get from an opt-out doctor or other provider (except in the case of an emergency or urgent need)
If what you need isn’t covered by Medicare Parts A or B, you will have to pay for these services yourself or use other coverage including Medicaid and/or Medicare Advantage and Medicare Cost plan benefits. These plans may cover services such as fitness and vision, hearing and dental services.
What are the differences between Medicare and Medicaid?
According to the Department of Health and Human Services,
Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources.
Medicaid offers benefits that Medicare doesn’t normally cover, like nursing home care and personal care services. People with Medicaid usually don’t pay anything for covered medical expenses but may owe a small co-payment for some items or services.
Medicare is federal health insurance for people 65 or older, and some people under 65 with certain disabilities or conditions. A federal agency called the Centers for Medicare & Medicaid Services runs Medicare. Because it’s a federal program, Medicare has set standards for costs and coverage. This means a person’s Medicare coverage will be the same no matter what state they live in.
Medicare-related bills are paid from two trust funds held by the U.S. Treasury. Different sources (including payroll taxes and funds that Congress authorizes) fund the trust funds. People with Medicare pay part of the costs through things like monthly premiums for medical and drug coverage, deductibles and coinsurance.
What else do I need to know about Medicare and Medicaid?
- Medicare recipients must enroll with Social Security to receive benefits, and Medicaid recipients enroll through local state agencies.
- Someone can have Dual Eligibility, which allows a person to enroll in both programs based on their eligibility categories. So, someone can have both Medicaid and Medicare coverage.
- The maximum income that qualifies for Medicaid is $1426 a month for individuals and $1923 a month for a married couple.
- Medicare is not, as many people believe, free. Costs include deductibles, copays, premiums and out-of-insurance costs.
- The cost of Medicare is not the same for everyone. Depending on the type of coverage you have, the health services and items you use each year and whether or not you have financial assistance all affect your Medicare costs.
- More than half of the people receiving Medicaid are employed and working, many of them full time.
- Medicare often does not cover long-term care or assisted living costs; however, Medicaid can often defray or reduce these costs.
Understanding Medicare and Medicaid is important for all older adults. Clearly identifying how best the use these resources and your personal eligibility can help ease healthcare related stress and anxiety. If you have questions about your own healthcare plans or eligibility, speaking with a professional can offer clarity, peace of mind and help you navigate an often confusing (but important) landscape.