Medicare vs. Medicaid

Medicare and Medicaid sometimes get confused with each other due to similarities in their names. They also have other things in common – where they come from, the benefits they offer, and the people they help. But there are some distinctions to consider, because while the benefits of having both are great, it’s possible to qualify for one but not the other.

Who Provides Medicare and Medicaid?

The source for each program is a similarity and a difference. They’re both government-funded, but the difference lies in the level of government sponsoring the program.

Medicare is a federal program where the criteria for eligibility are the same no matter what state you live in.

Medicaid, on the other hand, is a joint state and federal program. Each state has its own requirements, so it is possible for a person to qualify for one state’s Medicaid program while being ineligible in another.

What Decides Eligibility?

In order to be eligible for Medicare, you must be at least 65 years old or have been collecting disability benefits for 24 consecutive months.

Medicaid eligibility hinges on annual income. Your state determines the exact amount that your income cannot exceed, and this is based off of Modified Adjusted Gross Income (MAGI). If you earn above this, you can’t get Medicaid. That is unless you are determined to be medically needy. If you meet your state’s definition of medically needy, you can spend down, in which you can deduct medical costs from your annual income so that you will meet your state’s income standards.

What Are The Benefits?

Medicare has benefits depending on what you sign up for, as Part B, C (Medicare Advantage), and D are optional. If you were to get Original Medicare (Part A and Part B) plus Part D, or a Medicare Advantage plan with a built-in prescription drug plan, you would have a highly comprehensive list of benefits. Part A provides inpatient coverage, Part B offers outpatient coverage, and Part D covers medications. Medicare Advantage is a combination of those three, with added benefits.

Medicaid covers inpatient and outpatient services, too. It also covers services not applicable to Medicare’s demographic, such as family planning, nursing and midwife services, and services for pregnant women.

Which One Should I Choose?

Qualifying for both does not require you to choose one or the other, in fact it’s strongly encouraged to have both if possible. Medicare and Medicaid work together to help you get greater savings on your care. It works like this: in an outpatient setting, Medicare negotiates a payment amount with your doctor. Medicare then pays 80% of that cost. Instead of the remainder going directly to you, Medicaid takes care of what it can of the rest. Your out-of-pocket cost will either be minimal or $0.

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