Medicaid and Medicare
Difference Between Medicaid and Medicare

Medicaid and Medicare are closely related government healthcare programs that are often confused. There are major differences between Medicaid and Medicare that all seniors should understand.

What’s the Difference Between Medicaid and Medicare?

Medicaid and Medicare

Medicare is a nationwide government health insurance program administered by the federal government. It is generally available to all Americans over 65 or who are under 65 but have certain disabilities. Generally, eligibility for Medicare has nothing to do with the person’s asset or income level. Medicare is also the primary source of health insurance coverage for most Americans over 65.

Medicare is divided into separate coverage levels (Parts A, B, C, and D). The recipient pays a monthly premium based on the coverage selected.

  • Part A generally covers inpatient hospital stays, skilled nursing care (but not long-term care), hospice care, and limited home health-care services. There is typically no premium for Part A.
  • Part B covers medically necessary services and equipment, including doctor’s office visits, lab work, x-rays, wheelchairs, walkers, outpatient surgeries, as well as preventive services. There is typically a premium for Part B. As of January 1, 2020 the standard Medicare Part B Premium is $144.60 a month, but the amount is higher for individuals over a certain income.
  • Part C, also known as Medicare Advantage, is a supplemental insurance program. Medicare Part C plans are offered by private companies approved by Medicare. Coverage varies, but most Medicare Advantage plans cover things like vision, dental, and hearing.
  • Part D provides prescription drug coverage. Participants pay for Part D plans out-of-pocket, and must pay monthly premiums, yearly deductible, and copayments for certain prescriptions.

Medicare Part A covers skilled care and rehabilitation in a nursing home after a qualifying hospital stay, such as for a stroke, fall, or other event. A qualifying hospital stay typically means at least 3 days. Skilled nursing coverage typically lasts up to only 20 days.

Importantly, Medicare does not cover long-term care.

What’s the Difference Between Medicaid and Medicare?

Medicaid and Medicare

Medicaid is a combination state and federal program that provides direct benefits to needy families. It is not a health insurance program. There are no monthly premiums or deductible. Medicaid is only available to those that qualify. Eligibility is determined based on financial means testing. The Applicant typically must fall below certain asset and income limits to qualify.

Medicaid funding comes from the states and the federal government, but each state administers its own Medicaid program. Each state is also permitted to pass its own rules and regulations which are subject to federally mandated requirements. Eligibility requirements vary state by state. In Texas, Medicaid is administered through the Health and Human Services Commission (“HHSC”).

Unlike Medicare, Medicaid covers long-term care. In fact, Medicaid is the single largest payor source for all long-term care in the US.