Medicare and Medicaid are two different programs that can help pay for health care. This two-part series will help you understand Medicare and Medicaid, how they’re different and what each of them can cover. Whether you have questions about Medicare or Medicaid, we’ll be here to help.
Medicare
Medicare is a federal program that was enacted in 1965 to provide medical coverage for people who are over 65 years old, disabled, or have end-stage renal disease. It has grown to include many other conditions, including hospice care and long-term care for adults and children.
Medicare is a social insurance program that provides health insurance coverage to people aged 65 and older, as well as to those under age 65 who have certain disabilities or end-stage renal disease. Medicare is funded by the federal government but administered by individual states.
It also provides benefits for people younger than 65 with certain disabilities or end-stage renal disease. In 2017, Medicare covered 57 million people, including 39 million people age 65 and over and 18 million younger disabled or end-stage renal disease patients.
What services does Medicare not cover?
Medicare does not cover some services, including:
- Prescription drugs, except for some that are injected or infused by a health care provider in a hospital or other medical facility
- Durable medical equipment (such as wheelchairs), unless it’s needed to get around inside the home because of an injury or illness
- Most dental services, such as fillings and tooth extractions
- Hearing aids and other devices for treating hearing problems
- Most eye care, including glasses or contact lenses (except in some cases)
- Most physical therapy and speech-language pathology services, including the equipment needed to do these things
- Long-term care in a nursing home after you reach age 65
- Most over-the-counter medications like aspirin and ibuprofen (unless they’re prescribed by a doctor)
Medicare replacement plans
Medicare replacement plans are private insurance policies that cover many of the same types of healthcare services covered by traditional Medicare. Some people with Medicare choose to enroll in a Medicare replacement plan because it can provide extra coverage for things such as prescription drugs, dental and vision care, or other medical expenses not covered by traditional Medicare.
Medicare choice is a type of Medicare Advantage plan that allows you to see any doctor or health care provider without having to get approval from your insurance company first.
Medicare pays your doctor, hospital, or another healthcare provider on your behalf. You still have the same rights and protections as traditional Medicare.
Medicaid
Medicaid is a state-run program that provides health insurance to low-income families with children. Unlike Medicare, which is available to everyone at all income levels, Medicaid is available only to those who have very low incomes or who have disabilities.
Medicare and Medicaid are both funded by the federal government but in different ways. Medicare is financed through a payroll tax that is deducted from workers’ paychecks and paid by their employers. The tax rate depends on income—the higher your salary, the more you pay in taxes.
Medicaid is financed by a combination of state and federal funds. Each state has the option of deciding whether to participate in Medicaid and how much money it will contribute. In general, however, states pay for about half of all Medicaid costs. The rest comes from federal government support.
Medicaid has a larger share of the elderly, disabled, and children than Medicare does. The program also covers more low-income people who don’t qualify for other government health insurance programs, such as those provided by employers or unions.
What is the downside of Medicaid?
The biggest downside of Medicaid is that you may have to pay a fee for some services. Some states charge a monthly premium, which can be as little as $1 per month in some places or up to $50 per month in others. If you live in a state that charges a premium, you must pay it even if you don’t want the service covered by Medicaid (for example, when your doctor orders an expensive test).
Medicaid also has a five-year lookback period. This means that the state can check back up to five years for any income or resources you had before applying for Medicaid. If you receive any money from an inheritance or lottery winnings during that time, Medicaid may not cover some of your care.
If you’re on Medicaid and meet certain requirements, you may be eligible for social security disability benefits. The Social Security Administration offers two types of disability payments: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SSDI is available to any worker who has earned enough money over the course of their lifetime and contributes to the system by paying taxes.
Conclusion
Medicare and Medicaid are important components of the U.S. healthcare system, but they don’t cover everything. If you have a chronic illness, disability, or long-term care needs and want additional protection, you may want to consider supplemental insurance coverage.
Life insurance plans are available to help you protect your family in the event that you die and may be a good option for those who want to cover their long-term care needs. Life insurance plans can also be used as part of an estate plan to help ensure that your loved ones are cared for after you pass away.
Life and health insurance are important for your financial security. it’s best to speak with our insurance agent. You can contact us at our website. We’re happy to answer any questions you have about these plans and how they can help your loved ones. If you’d like some more information about the Medicare Advantage Plans, please visit our blog for additional resources.