Medicare and Medicaid have long been a mystery to many consumers. In fact, they can baffle and confuse even some of the smartest people. Like me, you might have thought, “I don’t need to worry about this right now.” However, it is never too early to gain a little understanding and awareness that just might help an aging loved one or yourself down the road. Let’s break it down and unlock the mystery of Medicare and Medicaid.
Medicare is a health insurance program provided through the federal government. In order to receive Medicare, a person must meet certain requirements. A person must be at least 65 years of age or have a severe disability. For a disabled person under the age of 65 to be eligible for Medicare, they must have received Social Security Disability Insurance (SSDI) for two years. In order to be eligible a person must have Social Security retirement benefits or Social Security disability benefits. Medicare is uniform from state to state because it is run and administered by the federal government. If a person meets Medicare eligibility requirements, they can receive Medicare no matter their income or assets. Costs for Medicare are based on the recipient’s work history. This means that costs are determined by the amount of time a person paid Medicare taxes. These costs, like all insurance, include premiums, copays, and prescriptions.
Medicare can be confusing because there are four parts. The commercials talk about Parts A, B, C and D. What does it all really mean? Parts A, B, and D can be somewhat simplified. Part A is hospital insurance, Part B is medical insurance and Part D is prescription drug coverage. Parts A and B are covered in Original Medicare offered by the government. Part C is often called the Medicare Advantage Plan. This is a private health plan. The Medicare Advantage Plan or Medicare Part C plan is required to include the same coverage as Original Medicare but usually also includes Part D as well. It is important to do your homework on these plans to find what works best for you and your budget.
Medicaid is a health care assistance program. Its guidelines come from the federal government, but it is administered by each state. Medicaid is for people who cannot afford to pay for their care on their own. It is based on income and assets, and is available to people who belong to one of the eligible groups. The eligible groups are children, people with disabilities, people over age 65, pregnant women, and the parents of eligible children. Seniors who require nursing home care can qualify for Medicaid and only pay a share of their income to the nursing home. Medicaid then pays the rest.
A person can qualify for both Medicare and Medicaid. The two programs work together to help the recipient best cover the expenses of health care. For example, Medicare costs include premiums, copays, and deductibles. Full Medicaid benefits can cover the costs of Medicare deductibles and cover the 20% of costs not covered by Medicare. Medicaid can also help with Medicare assistance and may cover costs of premiums for Part A and/or Part B.
Although Medicaid and Medicare can be quite confusing, it is important to, at a minimum, know the basics. There are organizations available to explain the differences as well, so do not hesitate to ask for help.
If you have any questions about something you have read or would like additional information, please feel free to contact us.