The words “Medicare” and “Medicaid” are often mistaken for the same program because they sound similar. The two programs are very different AND it is possible to have just one OR both Medicare and Medicaid.
Let us compare and contrast Medicare and Medicaid
Medicare is a federal program funded by Social Security and run by CMS (Center for Medicare/Medicaid Services). Medicare is a health insurance program for those 65 and older or who have been deemed disabled by Social Security for at least 24 months. Most will be signed up for Medicare when eligible automatically ALTHOUGH many will need to sign up through Social Security. There are four distinct parts of the Medicare program (A, B, C, and D). Medicare is also known as Original Medicare which is a Fee For Service program which pays your providers if they are credentialed to bill Medicare and they provider agrees with Medicare’s terms, conditions, and fee schedule. Original Medicare is identified by its red/white/blue paper identification card. Part C of Medicare is an optional way of receiving your Medicare benefits also known as Medicare Advantage.
Medicaid is both a state and federally funded program that provides health insurance for individuals with very low annual income, certain disabilities, those with long term care needs, pregnant and many children. Typically, in order to qualify for Medicaid you must meet both income and resource guidelines. Think of Medicaid as financial aid and healthcare combined for certain categories of people.
What the programs cover
Medicare coverage can differ depending on the plan chosen by the individual. Original Medicare Parts A, B, C and D all entail different types of healthcare coverage. Keep in mind that those who choose Medicare part C are NOT subject to the cost sharing requirements of Medicare part A and B. Those who choose Medicare Part C (Medicare Advantage) have cost sharing requirements in accordance with the plan’s benefits/documents and are subject to change annually. Those who use Medicare as their primary insurance can go to any doctor in the US that accepts Medicare.
- Part A: Hospital Insurance – think of inpatient services like a formal admission to the hospital. Part A of Medicare also covers home health care, skilled nursing, and hospice care. Each of the four items covered by part A have different cost sharing that the Medicare recipient also known as a “Medicare beneficiary” would owe if they did not have a supplemental plan to pay what the beneficiary is responsible for. Listed on the red white and blue card.
- Part B: Medical Insurance – services/care received as an outpatient. Part B of Medicare covers items like doctor visits, emergency room care, day surgeries, durable medical equipment and more. Listed on the red white and blue card.
- Part C: Medicare Advantage Plans (coverage plans offered by private insurance companies contracted with Medicare). This has become a leading option because of the health insurance plans low premiums, predictable co-pays, extra benefits that Medicare does not cover (like dental) and heavy advertising. Having a Medicare Advantage plan is very similar to work based coverage in that each plan has different cost sharing requirements for services provided and a set network of doctors to use. You would have a separate card to show providers from the private health insurance company that administers the plan’s benefits and pays your medical providers on behalf of Medicare.
- Part D: Prescription Drug Coverage – Medicare part D rolled out in 2006. This covers many medications taken by people 65 and older and are offered by private insurance companies. Each Medicare beneficiary typically has well over 20 plan choices in their home state and may cover different medications and result in different out of pocket costs for medications. When picking a part D plan, your choice should be based on the medications you take, the pharmacy you use, and the plan that has the best negotiated rates with that drug manufacturer and pharmacy will result in the lowest cost. Keep in mind that since plans change annually this should be closely reviewed annually as well to ensure the plan you are enrolled in is still the best fit for you. Medicare will penalize you if you do not sign up for Part D in most cases. Your out of pocket costs can vary for month to month because of a plan’s deductible and what phase of your plan’s coverage you are in. Each plan has at least 3 coverage phases even if the drug coverage is provided through your Medicare Advantage plan.
Think of Medicare as healthcare for older adults and think of Medicaid as financial aid + healthcare for women, children, and others that meet the income and eligibility guidelines.
Someone can be eligible for Medicaid and not Medicare and the opposite is true. Additionally someone can have both Medicare and Medicaid if they meet the guidelines and apply for both programs.
Note applicable to Tennessee residents
TennCare is the state of Tennessee’s Medicaid program and a great resource to take advance of if you are in need and eligible. Different groups of people qualify for TennCare including low-income pregnant women, caretakers of a minor child, individuals with a disability, and more. Our agents are available to walk you through the process and help you apply for TennCare at no cost to you. We can get you applied in minutes, screen your eligibility AND answer program questions and handle renewals.
Article written by Heather Majka with Citizens Insurance Solutions