The Key Differences Between Medicaid and Medicare

Both Medicare and Medicaid play important roles in covering healthcare costs, however each program has several key differences you may not fully understand. Each program’s goal is to provide healthcare for those who qualify, and it’s important to understand what exactly you or your loved ones do qualify for.

The main key differences between Medicaid and Medicare involve the target populations, who administers the program, the services covered, and who’s eligible for the program. Below we will further explain the differences:

• Target Groups:  

The primary difference is who’s eligible for each program. Medicare applies to anyone with a qualifying work history who is at least 65 years old, or certain younger people with specific disabilities or end-stage renal disease. Your income and financial assets are irrelevant. As long as you or your spouse has worked for 10 years in which paid Medicare taxes, you will generally qualify.

Medicare is designed to cover only a portion of your healthcare costs; therefore those who have financial challenges can occasionally be covered under both Medicare and Medicaid. In this case, you would be considered “dual-eligible” and can then fill in gaps that Medicare won’t cover.

• Medicare is entirely federal, Medicaid has a state component:  

Another big difference in these two programs is who it’s administered by. States govern a lot of what Medicaid covers, while the federal government runs Medicare. Because Medicaid varies by state, eligibility and types of services can be substantially different based on your location. It’s technically a joint federal and state program due to funding by the federal government, however the states add optional benefits that vary like previously stated. This is why it’s so important to look into what your state has to offer if you’re eligible for Medicaid. Our SFG Benefit Specialists are happy to help inform you.

• Medicaid covers some services that Medicare typically doesn’t:

Both programs cover different types of healthcare costs such as doctor visits, prescription drugs and medications, and hospital stays. Medicare is divided into Part A (hospital), Part B (doctor), and Part D (prescription drugs). Medicaid, on the other hand, covers all of those areas in a single program; much like the consolidated approach that Part C Medicare Advantage plans use.

The most important difference is the extent of coverage Medicaid offers in comparison to a Medicare Advantage plan, especially in the area of long-term healthcare services and support. Medicaid has the ability to help cover the cost of nursing homes, assisted living facilities, and other long-term care alternatives as long as they’re considered medically necessary; whereas Medicare provides limited coverage with most benefits confined to skilled nursing facilities for shorter periods of time.

Understanding the differences between Medicare and Medicaid can point you in the right direction to getting the healthcare benefits you need and deserve. If you have any questions about the differences between Medicare and Medicaid, please contact our Senior Financial Group Benefit Specialists at (865) 777-0153.