What is the Difference Between Medicare and Medicaid?

What is the difference between Medicare and Medicaid? People frequently confuse the two programs and consequently are unaware of potential benefits or are unpleasantly surprised that they do not have coverage for other health-related costs.

Medicare is federal health insurance for people sixty-five or older and some people under sixty-five with certain disabilities or conditions. It is a federal program that provides coverage for some medical conditions, hospitalizations, and rehabilitation services. The Centers for Medicare & Medicaid Services runs Medicare. Because it is a federal program, Medicare has set standards for costs and coverage. This means a person’s Medicare coverage will be the same no matter what state they live in.

Medicare-related bills are paid from two trust funds held by the U.S. Treasury. Different sources (including payroll taxes and funds that Congress authorizes) fund trust funds. People with Medicare pay part of the costs through things like monthly premiums, deductibles, and coinsurance.

Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. The federal government has general rules that all state Medicaid programs must follow, but each state runs its own program. This means eligibility requirements and benefits vary from state to state.

Medicaid offers benefits that Medicare does not normally cover, like extended nursing home care and personal care services. People with Medicaid usually do not pay anything for covered medical expenses but may owe a small co-payment for some items or services. Hospitals, testing centers, and health care providers who accept Medicaid reimbursement for services cannot bill the patient for the difference between their charges and the rate of reimbursement from Medicaid.

Many people are dual-eligible, meaning they qualify for both programs, providing a comprehensive health benefit package. If you are receiving Medicare and have limited income and resources, you may be dual-eligible. Contact CHOICES and ask to speak with a counselor to determine if you can add this extra benefit to your healthcare coverage at 1.800.994.9422.