I have noticed while talking to some seniors that there can be some confusion when it comes to the difference between Medicare and Medicaid. While they sound similar, they couldn’t be any more different. It’s important that you understand the differences between them, and that you make sure that you are maximizing the benefits that you are entitled to.
Medicare and You
First you’ll want to know that Medicare is a Federal program that was started back in 1965 under President Lyndon B. Johnson. The concept of Medicare was to provide seniors with an opportunity to have affordable healthcare. It has changed some since then, but the core of Medicare is still in place, and has been working as it was intended now for the last 50 plus years. Since Medicare is funded at the Federal level, it’s important to understand that it is a governmental program that is funded through payroll taxes while you are working. You essentially pay into the program while you work so that you may access the care and benefits after you have stopped working.
Currently, you become eligible for Medicare when you turn 65 or have been disabled for at least 24 months. Medicare consists of four parts in it’s current state. The four parts of Medicare are Part A, Part B, Part C, and Part D. If you, or your spouse has worked at least ten years (forty quarters) while paying into Medicare taxes then you will qualify for Medicare Part A at no additional cost. Medicare Part B must be payed for and currently costs most people $134/month. These two parts make up the core of Medicare which covers your doctor’s visits along with access to emergency and hospital care when needed. Part C and Part D of Medicare have been implemented over the last ten plus years and have expanded the benefits of Medicare to include access to prescription drugs, and the ability to access your medical care through a private insurance company. I’ve written a more detailed article on what is Medicare that explains the four parts of Medicare.
Medicaid and You
While Medicare is a Federal program that is funded by you through taxes while you work, Medicaid is a state program that provides access to healthcare for people who can not afford it. Medicaid is available to anyone regardless of age who meets the income and asset qualifications for Medicaid. Since Medicaid is implemented at the state level and not the federal level, each state will have it’s own variation of the program along with their own standards of qualifying for the program. This means that Medicaid may be called one thing in one state and something completely different in another. You also could find that you qualified in your current state, but when you move to another state, you may no longer qualify. To make it even more confusing, you typically find that there are several levels of Medicaid that you can qualify for based on your income and assets. Many states use the national poverty level to determine the benefits that you may receive.
Medicare and Medicaid do work together somewhat to help provide seniors with care if you can’t afford it. A great way to start the process of seeing if you are eligible for additional benefits from Medicaid is to apply for LIS (Low Income Subsidy). This programs will help you pay for prescription drugs, and is usually easier to qualify for than Medicaid. If you do qualify, you can have them send your information to the state to see if you qualify for benefits from the state. You could have your Medicare Part B premium paid for along with copays and other out of pocket costs.