U.S Healthcare Programs: The Difference Between Medicare and Medicaid

 In 1965, the United States Government established and introduced two government-sponsored programs called Medicare and Medicaid, designed to help both older and lower-income individuals afford and cover high healthcare costs associated with buying private health insurance. Both of these programs are funded by taxpayers and are managed under the Centers for Medicare and Medicaid. Due to the similar names, there is a lot of confusion around how they work and what type of assistance they provide. In this article, we are going to outline the differences between the two programs and provide a little bit of insight into how they are used and what they provide. 

The Ins and Outs of Medicare – A Social Insurance Program

Medicare is a federal program that is designed to provide healthcare coverage to those over the age of 65, otherwise known as the elderly. Although it primarily serves all United States citizens over sixty-five, it can also cover younger individuals who have certain disabilities and individuals who are on dialysis. You are eligible for it regardless of your monthly income permitting that you or your spouse has worked and paid Medicare taxes for at least ten years. Essentially what this does is provide your hospitalization coverage free of charge without a monthly premium but does require you to pay out co-pays and deductibles. Individuals who are receiving social security or are a Medicare-covered government employee or have a spouse that is eligible for these benefits can receive Medicare. 

If you meet the above requirements, then you also qualify for health insurance coverage which covers medically necessary services and equipment. This can be anything from doctor’s office visits, lab work, x-rays, wheelchairs, outpatient surgeries, and walkers. You may also get preventative care such as disease screenings and flu shots.  However, you are required to pay a monthly premium for the health insurance coverage portion of Medicare which is generally deducted right from your benefits such as social security. 

Now, if you would prefer to have an insurance plan offered by a private company rather than the federal government, you can enroll in Medicare Advantage, permitting that you meet all eligibility requirements. This type of insurance provides all Medicare services noted above, but can also include additional ones such as dental coverage and vision coverage. You may also choose to get prescription drug coverage, but there will be a yearly deductible, co-payments on some prescriptions, and monthly premiums. 

Medicaid – An Assistance Program for Low-Income Individuals

While Medicare is a social insurance program, Medicaid is an assistance program run as a joint state and federal partnership that helps low-income individuals pay for the costs associated with medical care. Regardless of age, individuals often pay no portion of the costs associated with covered medical expenses but may incur a small co-payment. Due to the fact that it is run in a partnership between the federal government and the various states, each state has their own Medicaid program.  Those who are eligible must have less than a few thousand dollars of liquid assets and some states have income restrictions. Benefits may include x-rays, doctor services, family planning, laboratory services, hospitalization, nursing services, home healthcare, clinic treatment, midwife services, and pediatric and family practitioner services. You may also be able to get additional benefits such as optometrist services, medical transportation, physical therapy, prosthetic devices, dental services, and prescription drug coverage. 

So What Are The Key Differences Between The Two?

With Medicare, you are only eligible for it if you are over the age of sixty-five or have specific disabilities and income level does not impact it. Medicaid, on the other hand, is designed for those who have limited or low-income and eligibility is dependent on state-by-state requirements.