At least 29.6 million Americans didn’t have health insurance in the year 2019. This number translates to close to 9.2% of the entire population.
The United States has one of the most expensive health care systems. With this reality, having a reliable insurance coverage plan remains a priority for most citizens. The United States’ government supports two critical programs to help citizens meet this high healthcare cost.
These programs are Medicare and Medicaid, which exist primarily to supplement the high health care costs. However, most people get confused when comparing Medicaid vs Medicare.
If you have been using these two terms interchangeably, then you aren’t alone. Most Americas don’t know how to differentiate between the two. Even so, Medicaid and Medicare have salient differences.
In this article, we explain the differences between Medicaid and Medicare. Read on for a comprehensive comparison.
What Is Medicaid?
Medicaid is a government program that currently supports millions of Americans. Most of these enrollees have limited income and resources.
These individuals include families and children, pregnant women, and the elderly. If you fall within the category of vulnerable Americans, then Medicaid may work for you.
In some specific states, Medicaid supports low-income Americans who fall below a specific income level. Individuals who fall within this insurance program get access to free or low-cost health coverage.
What Is Medicare?
On the other hand, Medicare is also a federal health program. The plan provides health care coverage for a special category of Americans.
This category includes individuals who are 65 years and above. The program also covers healthcare coverage for younger Americans who might have underlying renal diseases.
Medicare programs can further fall into four subparts. These parts inform of key differences when comparing Medicaid vs Medicare. Now that you understand the basic difference between Medicaid and Medicare let’s delve into the two programs and their inherent differences.
- Eligibility
One of the main differences between Medicaid and Medicare relates to the aspect of eligibility. The qualifications criteria for each of the programs depends on specific factors. The following are the eligibility specifications for each program.
Medicare Eligibility
Americans who qualify for Medicare must be 65 years and older. However, this coverage also includes younger Americans with specific disabilities.
Medicare further breaks down into two main parts. The parts help to categorize the beneficiaries of Medicare into either hospital insurance or medical insurance.
Medicaid coverage may also be extendable to people who are eligible for social security disability programs. Such beneficiaries must be widowed and at least above the age of 50 or older. If you have paid for coverage for a minimum length of time at a government job, your child may qualify for coverage.
The approval or rejection of your Medicaid coverage request depends on these critical factors. However, your qualification may also depend on other factors, such as the amount of Medicare taxes paid over the year. The issue of edibility stands out as the main difference when comparing Medicare vs. Medicaid.
Medicaid Eligibility
As compared to Medicare, your qualification for Medicaid depends on income. Most times, the process of assessing your eligibility also depends on family size. Americans with the lowest income levels automatically qualify for this health coverage option.
You must be a resident of the United States for you to qualify for eligibility for Medicaid. Nonetheless, certain qualified non-citizens may also be eligible for Medicaid. This may include non-residents that have lawful permanent residence.
Every state has a Medicaid website. This is where every individual can log in and conform to eligibility.
If you live in a household alone and have an income of $12,490 per year, you qualify for this program. This means that every American earning an income lower than 133% of the current federal poverty level is eligible for Medicaid.
- Cost
The other critical factor to consider when comparing Medicaid vs Medicare is the issue of cost. When paying for either Medicare or Medicaid, the cost you incur depends on specific factors.
The cost of Medicare you incur depends on your choice of coverage. Each coverage option has premiums, deductibles, copays, and insurance, affecting the actual cost of coverage.
In the year 2019, the total spending on Medicare rose to $799.4 billion. With such high levels of spending on healthcare coverage, it’s vital to get your calculation right when planning for premiums.
The total financial implications for both Medicare and Medicaid depends on the coverage option you choose. Even so, Medicaid costs tend to be different from Medicare to certain degrees.
First, Medicaid costs are never fixed. When you enroll for this program, the cost implications will be formulated based upon income and other state-based eligibility rules.
If your state includes premiums, deductibles, copays, and coinsurance in your Medicaid costs, then you might pay more. States reserve the option to charge enrollees premiums to meet the period cost of health care coverage. If you have higher income rates as an individual, you might expect to pay more charges for your Medicaid coverage.
Your state may also establish specific out-of-pocket spending requirements for individuals enrolled in the Medicaid program. The out-of-pocket spending requirements, however, exclude pregnant women, children, and other vulnerable persons.
Medicare, just like Medicaid, sets the cost of insurance coverage based on taxes paid. For a better understanding of the cost of Medicare, let’s look at the main parts.
Part A Premium
Most times, you won’t pay a premium for Part A of the Medicare plans. This explains why it’s often termed as premium-free Part A.
If you buy Part A, Medicare will expect a monthly top-up of $471. You also need to pay around $1,408 as deductible for each benefit period if you opt for inpatient deductible and coinsurance.
Part B Premium
On the other hand, Part B premium costs enrollees a premium amount of $144.60 per month. This cost may be higher depending on your income levels. The higher the income, the higher the costs.
For part B, deductible and coinsurance costs range from $198 to $ 203. You may also need to pay 20% of the approved Medicare amounts extra medical needs outpatient therapy.
Part C Premium
Part C monthly premiums may vary depending on the plan. Medicare part C covers everything that Plan A and B cover. On top of this, part C Medicare further covers prescription drugs, dental, vision, and hearing coverage.
The best thing about Part C coverage is that you get to enjoy provider freedom. When comparing Medicare vs. Medicaid, the latter offers a broader coverage plan for enrollees.
- Management and Funding
Most people don’t realize that both Medicaid and Medicare government-sponsored programs. When comparing the two, it’s important to note that both programs result from partnerships between state and federal governments. Even so, the management of these two programs is divergent.
The Medicare program operates under the Centers or Medicare & Medicaid Services. This agency is responsible for ensuring that the Medicare program functions within the stipulated objectives. Medicaid, on the other hand, runs within the Departments of health at the state level.
The congress further funds the two programs separately. Funding for Medicare is through payroll taxes and premiums. On the other end, the government takes charge of Medicaid enrollees’ funding.
Medicaid receives funding from both state and Federal governments. This helps to meet the high demand for health care coverage.
- What Each Program Covers
The other important point of divergence between Medicare and Medicare is with regard to each cover. Part A of Medicare coverage covers inpatient hospital expenses, skilled nursing facility, hospice, lab tests, and home health care costs. With Medicare, you also get coverage for a wide range of tests, items, and services depending on your specific state.
When comparing Medicaid vs Medicare, it’s notable that the latter has more options. This is considering that each of the three parts provides unique cover options.
Medicaid may provide most of the specific inpatient needs for all the enrollees. However, when compared to Medicare, the option has a few limitations.
You can’t access routine annual physical checkups with Medicaid. On the same note, all Medicaid enrollees can access over the counter medications or supplements. Other limitations include the failure to provide custodial care or assistance for Medicaid enrollees.
Follow here to review the Medicare supplement plans every enrollee should know. Persons who need assistance with activities of daily living may find this option unattractive. Such limitations aren’t inherent in Medicare.
When Comparing Medicaid vs Medicare, These Differences Are Inherent
The current Corona pandemic has revealed the essence of comprehensive health care coverage. Even so, most Americans don’t realize the importance of health insurance coverage. Those who have health insurance coverage often don’t know much about the finer details of their plan.
Medicare and Medicaid are the two main government-sponsored health coverage plans in the United States. Unfortunately, most users don’t realize the comparison of Medicaid vs Medicare introduces unique differences. In this article, the differences are laid out to offer you a better understanding of the option that works for you.
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