Jeffrey Wade
Medicare and Medicaid are both government-run health insurance programs in the United States. Medicare is federal health insurance for people aged 65 or older and some younger people with disabilities or specific conditions. It is run by a federal agency and has set standards for costs and coverage, which remain the same across states. Medicaid, on the other hand, is a joint federal and state program that provides health coverage for people with limited incomes and resources. Eligibility and benefits vary across states, and each state runs its own program. While Medicare is available to a specific age group, Medicaid covers a wider range of individuals, including children, adults, and people with disabilities or special needs.
| Characteristics | Values |
|---|---|
| Type | Medicare: Federal health insurance |
| Medicaid: Joint federal and state program | |
| Administered by | Medicare: Centers for Medicare & Medicaid Services |
| Medicaid: Administered by each state | |
| Eligibility | Medicare: For people 65 or older, younger people with disabilities, and people with End Stage Renal Disease |
| Medicaid: For people with limited income and resources, eligibility requirements vary from state to state | |
| Coverage | Medicare: Standardized costs and coverage across all states |
| Medicaid: Covers medical costs, nursing home care, personal care services, and emergency ambulance services; may cover dental services and prescription drugs | |
| Enrollment | Medicare: Automatic enrollment for some; advised to sign up when first eligible to avoid a gap in coverage |
| Medicaid: Enrollment varies by state, with higher rates in states with lower average incomes and lower rates of health insurance offered by employers | |
| Cost | Medicare: Covered by trust funds, payroll taxes, and funds authorized by Congress; beneficiaries pay part of the costs through monthly premiums, deductibles, and coinsurance |
| Medicaid: No cost for covered medical expenses, but small co-payments may be required for some items or services |
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What You'll Learn
Medicare eligibility and enrolment
Medicare is federal health insurance for people aged 65 or older, as well as younger people with certain disabilities or conditions. It is administered by the Centers for Medicare & Medicaid Services, a federal agency. Since it is a federal programme, Medicare has set standards for costs and coverage, meaning that a person's Medicare coverage will be the same regardless of their state of residence.
Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) are available to most people at no cost. However, some individuals must pay a premium for this coverage. To be eligible for premium-free Part A, an individual must be entitled to receive Medicare based on their own earnings or those of a spouse, parent, or child. Additionally, the worker must have a specified number of quarters of coverage (QCs) and file an application for Social Security or Railroad Retirement Board (RRB) benefits. The exact number of QCs required depends on whether the person is filing for Part A on the basis of age, disability, or End Stage Renal Disease (ESRD). People who are eligible for premium-free Part A are also eligible to enrol in Part B once they are entitled to Part A.
Individuals who are not automatically enrolled in Medicare must file an application to enrol by contacting the Social Security Administration. They must also enrol in or already have Part B. To keep premium Part A, the person must continue to pay all monthly premiums and stay enrolled in Part B. This means that the person must pay both the premium for Part B and the premium for Part A on time to maintain coverage.
Medicare Part B helps cover medical services like doctors' services, outpatient care, and other medical services that Part A doesn't cover. Medicare Part D, which has been available since January 1, 2006, provides prescription drug coverage for everyone with Medicare, regardless of income, health status, or prescription drug usage.
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Medicaid eligibility and enrolment
Medicaid is a federal-state programme that provides health coverage for people with limited income and resources. Eligibility and benefits vary from state to state, and each state runs its own programme.
Medicaid eligibility may depend on factors such as age, pregnancy, disability, income, assets, and citizenship. Non-qualified aliens or undocumented immigrants may be eligible for emergency medical assistance only.
In Georgia, for example, the Division of Family and Children Services (DFSC) uses household size, residency, and income information from various sources to make an automatic enrolment determination. The DFSC will also verify citizenship or immigration status.
To apply for Medicaid, individuals can use official state websites or portals, such as the Georgia Gateway Customer Portal, which allows users to screen for, apply for, and renew benefits. Paper applications are also available.
It is recommended to apply for Medicaid even if you are unsure about your eligibility, as Medicaid offers benefits that Medicare does not typically cover, such as nursing home care and personal care services.
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Medicare and Medicaid coverage
Medicare is federal health insurance for people aged 65 and above, as well as some people under 65 with certain disabilities or conditions. It is run by a federal agency called the Centers for Medicare & Medicaid Services. As a federal program, Medicare has set standards for costs and coverage, meaning that a person's Medicare coverage will be the same regardless of their state of residence. Medicare Part B covers medical services like doctors' services, outpatient care, and other medical services that Part A doesn't cover. Medicare Part D covers prescription drugs.
Medicaid, on the other hand, is a joint federal and state program that provides health coverage for individuals and families with limited incomes and resources. Eligibility and benefits vary from state to state, and each state runs its own program. This means that the rules around eligibility for Medicaid differ across states, generally focusing on income and resources, as well as other requirements such as state residency. Medicaid offers benefits that Medicare does not, including nursing home care and personal care services. Medicaid typically covers all medical expenses, but individuals may need to pay a small co-payment for certain items or services. In some cases, individuals may be eligible for both Medicare and full Medicaid coverage, in which case Medicare pays first for Medicare-covered services, and Medicaid pays last for any remaining costs. Medicaid may also cover some drugs that Medicare does not.
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Medicare and Medicaid costs
Medicare is federal health insurance for people aged 65 or older, as well as younger people with disabilities or end-stage renal disease. It is administered by the Centers for Medicare & Medicaid Services (CMS), a component of the Department of Health and Human Services. The Social Security Administration (SSA) determines eligibility and coverage levels. Medicare-related bills are paid from two trust funds held by the US Treasury, which are funded by various sources, including payroll taxes and funds authorized by Congress. People with Medicare pay part of the costs through monthly premiums for medical and drug coverage, deductibles, and coinsurance. The amount a person pays for Medicare varies based on their coverage and the services and providers they use. Those with limited incomes and resources may receive financial assistance from their state government or through programs like Medicare Supplement Insurance (Medigap) or Medicare Advantage Plans.
Medicaid, on the other hand, is a joint federal and state program that provides health coverage for individuals and families with limited incomes and resources. While the federal government sets general rules for all state Medicaid programs, each state runs its own program, resulting in varying eligibility requirements and benefits across states. The federal government pays states a share of program expenditures, known as the Federal Medical Assistance Percentage (FMAP), which is determined based on per capita income and other criteria. On average, the federal government covers 57% of Medicaid costs, but this can range from 50% in wealthier states to 75% in states with lower per capita incomes. Medicaid typically covers expenses such as nursing home care and personal care services and emergency ambulance services. Individuals with Medicaid usually don't pay anything for covered medical expenses but may owe small co-payments for certain items or services.
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Medicaid expansions
The Affordable Care Act (ACA) permits states to expand Medicaid coverage to adults with incomes up to 138% of the poverty level (about $20,780 annually for an individual or $35,630 for a family of three). As of 2023, 40 states and Washington, D.C., have adopted this expansion.
The ACA was intended to address systematic health inequalities for millions of Americans who lacked health insurance. Expansion of Medicaid was a key component of the legislation, as it was expected to provide coverage to low-income individuals, a population at greater risk for disparities in access to the healthcare system and in health outcomes.
The U.S. Supreme Court ruled that the Medicaid expansion is voluntary with states. As a result, some states have not expanded their Medicaid programs, leaving adults with incomes below 100% of the federal poverty level without coverage. In states that have expanded Medicaid under the ACA, hospital uncompensated care costs in the fiscal year 2020 totalled 2.7% of their operating expenses, well below the 7.3% figure for hospitals in non-expansion states.
Medicaid expansion has also had other positive economic impacts on multiple types of healthcare providers. Expansion has enabled states to spend less on programs for people with mental health or substance use disorders, since federal Medicaid matching funds are now available to help pay for their treatment. Expansion has also enabled states to lower their corrections spending as more incarcerated people became eligible for and enrolled in Medicaid.
Additionally, Medicaid expansion has produced net savings for many states. This is because the federal government pays the majority of the cost of expansion coverage, while expansion generates offsetting savings.
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Frequently asked questions
Medicare is federal health insurance for people aged 65 or older, and some people under 65 with certain disabilities or conditions. It is available nationwide and has set standards for costs and coverage.
Medicaid is a joint federal and state program that helps cover medical costs for people with limited incomes and resources. Eligibility and benefits vary from state to state.
Medicare is federal insurance for people over 65 or with certain disabilities. It is standardized across the US. Medicaid is a state-run program that provides health coverage for those with low incomes and resources. It is not available in all states and has varying eligibility and benefits.
Yes, a person can have both Medicare and Medicaid. In this case, Medicare pays first for any Medicare-covered services, and Medicaid pays last, after Medicare.
