Medicare and Medicaid are both government programs that provide health insurance to specific population groups. They are often confused with one another, but they actually serve two very different purposes. As an insurance agent, it’s very important to be able to explain the difference between these two programs.
Who does Medicare cover?
Medicare provides health insurance to people who are over the age of 65. The requirements to qualify for Medicare vary from state to state. In many states, individuals with disabilities can also qualify for Medicare.
Who does Medicaid cover?
Medicaid is designed to provide health insurance coverage for those who are low income or have no income. There are no age requirements to qualify for Medicaid. The income threshold to qualify for Medicaid varies from state to state.
How does Medicare work?
Medicare is funded partially by payroll taxes and partially by general government revenue and state government payments. Medicare recipients must also pay monthly premiums for their coverage and will need to pay co-pays for some services. However, these premiums and co-pays are usually much lower than private health insurance options.
The Original Medicare program contains Part A and Part B coverage. Part A covers inpatient hospital stays, and beneficiaries do not need to pay a monthly premium. Part B covers a range of outpatient medical services and preventative doctor’s visits, and beneficiaries will need to pay a low monthly premium. However, these premiums are can be deducted from your Social Security benefits if you are already receiving them.
Those who qualify for Medicare can choose to purchase supplementary coverage as well. There are three different types of supplementary coverage – Medicare Advantage, Medigap, and Part D, all of which require you to pay an additional monthly premium. Medicare Advantage, which is sometimes referred to as Part C, is a group of supplementary plans offered by private insurers. These plans replace your Original Medicare and provide additional benefits.
Alternatively, you can choose to purchase a Medigap plan, which is used in addition to Parts A and B to provide additional coverage. Part D plans provide coverage for prescription drugs, which are not covered in Original Medicare.
Some people will be enrolled in Medicare automatically due to their Social Security status. However, many recipients will need to sign up through the Social Security Administration.
How does Medicaid work?
Patients who qualify for Medicaid will typically pay no monthly premiums for their insurance. Some medical services may require a low copayment, but most are free. Medicaid coverage is a partnership between the federal government and state governments, which means that coverage, cost, and eligibility can vary widely from state to state.
Medicaid covers a wide range of services, including both inpatient and outpatient care. For instance, it provides coverage for people with disabilities and chronic health conditions. Many states have even expanded their Medicaid program to provide dental and vision coverage as well as physical therapy. Most state governments will contract with private insurance providers to offer Medicaid plans for certain groups. Medicaid users may also be limited to certain medical providers, as not all doctors will accept Medicaid coverage.
To receive Medicaid coverage, patients will need to sign up with their state’s Medicaid agency. During the application process, you will need to provide information about your finances and employment status.
Medicare and Medicaid are both essential government services that provide necessary healthcare coverage to groups who may not otherwise be able to afford them. For these groups, Medicare or Medicaid could be the most affordable way to receive ongoing medical care.
