With such similar sounding names, it can be easy to confuse Medicare and Medicaid. Add in the fact that both are government-run programs designed to help beneficiaries pay for healthcare costs, and it’s no wonder many people confuse the two.
In reality, each program has vastly different requirements and benefits. However, it is possible to qualify for both. This post provides a basic overview of each program, key differences between them, and how you might qualify for both Medicare and Medicaid.
Medicare at a Glance
Medicare is a federally-run health insurance program, meaning its rules and regulations do not vary according to the state in which you live. Everyone who works and pays income taxes contributes to Medicare through their FICA (Federal Insurance Contributions Act) withholdings. Your FICA taxes also contribute to Social Security.
Most people become eligible for Medicare once they turn 65, although some qualify before their 65th birthday. Original Medicare has two parts, A and B. Part A is hospital insurance and it is free to people with the requisite work history, i.e. 40 credits. You earn one credit for every three months that you work and pay into FICA. You still qualify for Part A if you do not have the 40 credits, you just have to pay a monthly premium. Medicare Part B is the medical insurance portion and it includes a monthly premium.
Medicare Part D provides prescription drug coverage. You may add it to your Original Medicare. Medicare Part C, also known as Medicare Advantage, allows you to choose a health insurance plan from a private insurer. These plans must offer the same benefits as Medicare Part B, but they may also offer additional services, such as prescription drug coverage.
There is no income requirement to qualify for Medicare. If you are an American citizen or permanent legal resident and meet the age requirement, you qualify for Medicare.
Medicaid at a Glance
Medicaid is a health insurance program designed for those in lower income brackets. It is paid for jointly by state and federal governments. The portion covered by the state government does not exceed 50 percent. If you’d like to see the portion your state pays, click here.
The name of the program often varies according to the state as well. For example, in California it’s called Medi-Cal, in Arizona it has the lengthy acronym AHCCCS, and in Massachusetts it is known as MassHealth.
While Medicare is available to anyone who meets the age and citizenship requirements, Medicaid has strict eligibility requirements that vary by state. Typically, these revolve around income and even available liquid assets, but most states have additional requirements as well. Check the Medicaid site to determine eligibility requirements for your state.
Key Differences between Medicare and Medicaid
The main difference between Medicare and Medicaid is in eligibility. Medicare is available to any American citizen aged 65 or older or who has a qualifying disability or disease. Your income and assets play no role in determining eligibility. Medicaid, on the other hand, is designed specifically for those who meet certain income requirements, with no age requirement at all.
After eligibility differences, the largest difference is cost. Medicare Part A is free to those with the requisite 40 credits, but Medicare Part B carries a monthly premium. In addition, beneficiaries typically have co-pays and yearly deductibles. Medicaid recipients pay zero for their healthcare.
Can I Enroll in Both Medicare and Medicaid?
If you qualify for both programs then yes, you may enroll in both Medicare and Medicaid. This is known as dual eligibility and it applies to around 20 percent of Medicare recipients. If you are eligible for both programs, Medicare pays first and Medicaid pays any amount left over. It may also cover services not covered by Medicare, such as long-term or nursing home care.
You may apply for a Medicare Savings Program if you meet the following requirements:
- Have or are eligible for Medicare Part A
- Meet the income limit
- Meet the resource limit
Income and resource limits vary according to the Medicare Savings Program (there are four choices). Please note that, as with other Medicare services and benefits, these amounts may change every year.
Medicare Part B Premium Surcharge
|2018 Income Filing as Individual||2018 Income Filing Jointly||2018 Income Married Filing Separate||Medicare Part B Premium|
|Up to $87,000||Up to $174,000||Up to $87,000||$144.60|
|$87,000 to $109,000||$174,000 to $218,000||Not Applicable||$202.40|
|$109,000 to $136,000||$218,000 to $272,000||Not Applicable||$289.20|
|$136,000 to $163,000||$272,000 to $326,000||Not Applicable||$376.20|
|$163,000 to $500,000||$326,000 to $750,000||$87,000 to $413,000||$462.70|
|$500,000 and up||$750,000 and up||$413,000 and up||$491.60|
Resources include any funds in a checking or savings account as well as stocks and bonds. Items that do not count toward your resource limit include:
- Your home, furniture, and personal belongings
- One vehicle
- A burial plot and/or up to $1,500 in burial expenses if you have that money set aside
If you qualify for any program except the Qualified Disabled and Working Individuals Program, you automatically qualify for Extra Help to help cover your prescription drug costs.
For more information on what expenses each plan covers, visit the Medicare Savings Program page. And, if you would like to learn more about low-cost Medicare Advantage plans, call us toll-free at 855-350-8101 to speak with a licensed agent.