What's the Difference Between Medicare and Medicaid

Summary:

  • Medicaid is a joint federal and state government-funded program to help pay for healthcare bills. It may also cover nursing home costs.
  • When you qualify for both Medicare and Medicaid, you are considered dual-eligible.
  • Partial coverage may include Medicaid coverage for things like Medicare premiums for Part A and Part B, deductibles, and co-insurance. Full coverage consists of the same benefits as partial coverage but may also include services not covered by Medicare (some long-term care).

What is Medicaid?

Medicaid is a joint federal and state government-funded program intended to help low income individuals pay for some or all of their healthcare bills (doctor and hospital costs, nursing home, or personal care).

Medicaid may cover nursing home costs, but many people won’t qualify due to incomes that exceed eligibility levels in their state. Due to these requirements, many people pay out-of-pocket for nursing home care to “spend down” their assets in order to be eligible for Medicaid.

If you are having trouble covering the cost of your medical services and are eligible, you might want to consider the Medicaid program. If you are considering Medicare, or are currently enrolled in a Medicare plan but struggle to afford the costs, you may qualify for both Medicare and Medicaid.

If you are having trouble covering the cost of your medical services and are eligible, you might want to consider the Medicaid program.

What’s the difference between Medicaid and Medicare?

Medicaid is an income based government assistance program to help pay for healthcare bills. Eligibility is based on your age, income level, number of people in your family and if you are pregnant or have a disability. For those who qualify, Medicaid enrollment is open the entire year. Medicaid also covers additional services beyond those provided under Medicare, including nursing facility care beyond the 100-day limit or skilled nursing facility care that Medicare covers, prescription drugs, eyeglasses, and hearing aids. Services covered by both programs are first paid by Medicare with Medicaid filling in the difference up to the state's payment limit.

Medicare is a public paid health insurance program. Most people that use Medicare are 65 years of age or older. Medicare enrollees pay part of their medical costs through deductibles and premiums. While you may be able to obtain Medicare coverage at any point in the year, to avoid fees and extra costs it is recommended to apply during your specific open enrollment. Medicare enrollment is available at specific times during the year, including Initial Enrollment, Annual Enrollment Period (AEP), Medicare Advantage Open Enrollment (OEP), and Special Election Periods (SEP).

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Can You Have Both Medicare and Medicaid?

The short answer is Yes. If you receive coverage from both Medicaid and Medicare, you’re considered a “dually eligible beneficiary.” The term includes beneficiaries enrolled in Medicare Part A and/or Part B and getting full Medicaid benefits and/or assistance with Medicare premiums or cost sharing through the Medicare Savings Program (MSP). If you are dual-eligible, you can either enroll in Medicare and then qualify for Medicaid, or enroll in Medicaid first and later qualify for Medicare.

How does dual eligibility work?

Dual-eligible beneficiaries can have:

Medicare benefits will pay first, and Medicaid benefits help with costs not fully covered by Medicare.

Medicaid will pay premiums and out-of-pocket expenses for dual-eligible Medicare beneficiaries. Medicare and Medicaid work together to cover your costs. If you need extra assistance in covering costs, Medicare Savings Programs (MSP) may help cover some of those costs.

Medicare Savings Programs (MSP):
  • Qualified Medicare Beneficiary (QMB) Program - helps pay for Part A premiums, Part B premiums, and deductibles, coinsurance, and copayments for services and items Medicare covers
  • Specified Low-Income Medicare Beneficiary (SLMB) Program - helps pay Part B premiums for people who have Part A and limited income and resources.
  • Qualifying Individual (QI) Program - state program that helps pay Part B premiums for people who have Part A and limited income and resources.
  • Qualified Disabled and Working Individuals (QDWI) Program - helps pay the Part A premium.

Medicaid may also cover prescription drugs, eyeglasses, and hearing aids. Medicaid covers most qualified medical costs not covered by Medicare up to your state’s payment limit. For extra information it is best to confirm with your state's Medicaid website.

What is Covered by Medicaid?

Your state determines Medicaid services. It is important to know that your state government sets the rules, regulations, and policies for Medicaid within federal guidelines.

Please read more about all the different types of Medicare to understand their different coverage.

Your Medicare Part A and Part B benefits do not change with dual-eligibility, but the level of Medicaid coverage may vary. Your income and assets will dictate whether you qualify for “partial” or “full” dual eligibility. Partial coverage may include Medicaid coverage for things like Medicare premiums for Part A and Part B , deductibles, and co-insurance. Full coverage consists of the same benefits as partial coverage but may also include services not covered by Medicare (some long-term care).

What Are My Costs with Dual-Eligibility?

If you are dual-eligible and have both Medicare and full Medicaid coverage, most of your health care costs are likely covered. When you have both, you will get your Part D prescription drugs through Medicare. You will also automatically qualify for Extra Help paying for your Medicare Drug Coverage (Part D). Medicaid may cover some drug charges and other items that Medicare does not cover.

To read more about the costs of Original Medicare or a Medicare Advantage Plan (Part C) feel free to explore our site.

Changing Plans When Dual-Eligible

You are able to change plans when dual-eligible if you have Medicare and full Medicaid coverage.

You can change your plan once every calendar quarter for the first three quarters. All changes are active on the first day of the following month.

  • January 1 – March 31
  • April 1 – June 30
  • July 1 – September 30

Fourth-quarter changes must be made during the Annual Enrollment Period (AEP) between October 15 and December 7. Fourth-quarter changes take effect on January 1.

Medicare supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. This is a solicitation of insurance.  A licensed agent/producer may contact you.  Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal disease.  MasterCare America, Inc. and Insuractive LLC are licensed and certified representatives of Medicare Advantage HMO, HMO SNP, PPO, PPO SNP and PFFS organizations and stand-alone PDP prescription drug plans. Each of the organizations they represent has a Medicare contract. Enrollment in any plan depends on contract renewal. The plans they represent do not discriminate on the basis of race, color, national origin, age, disability, or sex.  For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov

Recommended Reading

Medicaid Enrollment

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History of Medicare & Medicaid

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