Medicare and Medicaid may seem similar at the outset, but are in fact two very different programs. Each one has difference qualifications and serves different purposes, but deciphering and understanding those differences can be confusing. Here are a few points of distinction to help make Medicare and Medicaid more clear.
A Tale of Two Programs
By Byron Cordes, LCSW, C-ASWCM
Medicare and Medicaid; there could not be two more confusing programs for seniors. The first problem is the names. They sound so similar that the consumer cannot keep them straight. The truth is that the programs could not be more different. In this post, I will try to give a quick differentiation to help make some sense of the differences.
In its current form, Medicare is simply a health insurance program for adults who reach 65 years in age or become disabled. The individual or spouse must have paid into the Medicare insurance fund; seen on paychecks as FICA (Federal Insurance Contributions Act). Once on Medicare, an individual will have their medical expenses covered with some coinsurances and copays. Medicare has an automatic hospital benefit known as Medicare Part A, and a voluntary outpatient benefit called Medicare Part B. There have been additional programs added to Medicare over the years; Medicare C (or Medicare Advantage) is an assignment of the Medicare benefits to a 3rd party insurer, sometimes with additional care, but always managed by the new insurer. Medicare Part D is a prescription program introduced in 2006. To sum up, Medicare A is generally covered by premiums paid in; Medicare B is voluntary and at a fee with penalties if you do not accept it when first eligible; Medicare C is a voluntary assignment of your A & B benefits to another party; Medicare D is voluntary and at a fee with penalties if you do not accept it when first eligible. Medicare is not a social program, so it does not cover the cost of living or long-term care; it is only a medical insurance.
Medicaid is a more cumbersome program to describe. Title 19 created the Medicaid benefit as a joint state-federal program. Because each state administers its own program, Medicaid looks a little different in each state, with different qualification rules. Medicaid, at its core, is also a medical insurance program, but with a social services overlay. Medicaid is paid for through general tax revenues, not premiums, and is known as an entitlement program. This means a person who meets all qualifications cannot be denied. Medicaid for seniors and adults with disabilities typically pays for healthcare needs by itself or as a secondary to Medicare. The program can pay for additional services (unlike Medicare and only in certain circumstances) such as: as help in the home, nursing home care, or even modifications to the home.
While Medicare and Medicaid share similar names, we hope this helps clarify how different the two really are. An Aging Life Care Professional in your area can help guide families on how the two programs can benefit a senior. For more help, visit: www.aginglifecare.org.
About the author: Byron is recognized as one of the nation’s leading experts in Geriatric Care Management, derived from 25 years in the social work field. He has had his writings and interviews on geriatrics, families and caregiving published nationally. Byron served as the 2012 President of the Aging Life Care AssociationTM. He received his Masters in Social Work from the Worden School of Social Services at Our Lady of the Lake University and a Bachelor of Science in Psychology from Oklahoma State University.