What is the difference between Medicare and Medicaid?

Medicare is a federal health insurance program while Medicaid is a federal-state medical assistance program. The specifics of both the Medicare and Medicaid programs are as follows:

Medicare Program

Medicare is a Health Insurance Program. Medical bills are paid from trust funds which those covered have paid into while they are working. Medicare serves primarily people over 65, whatever their income, and serves younger disabled people and dialysis patients.

Patients pay part of costs through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage. Medicare is a federal program. It is basically the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government.

Medicare Coverage
Medicare Has Two Main Parts (Original Medicare Plan A & B) and Two Optional Plans (Medicare Advantage and Part D):

Medicare Part A is Hospital Insurance and it helps pay for hospital, skilled nursing, home health and hospice care. Most people don't have to pay for Part A.

Medicare Part B is Medical Insurance which helps pay for doctors, outpatient care and other medical services. Most people pay monthly for Part B.

Medicare Part C is known as Medicare Advantage (you belong to an HMO or PPO).

Medicare Part D is the Medicare Prescription Drug Plan (PDP).

Are you Eligible For Medicare?

Generally, you are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment and you are 65 years or older and a citizen or permanent resident of the United States. If you aren't yet 65, you might also qualify for coverage if you have a disability or with End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).

Medicare Enrollment Period

If you didn't sign up for Medicare Part B when you first became eligible, you may be able to sign up during the General Enrollment Period. This period runs from January 1 through March 31 of each year. During this time, you can sign up for Medicare Part B at your local Social Security office. If you get benefits from the Railroad Retirement Board (RRB), call your local RRB office or 1-877-772-5772. Your Medicare Part B coverage will start on July 1 of the year you sign up.

Your Medicare Card

You will receive your Medicare card in the mail 3 months prior to eligibility. The Medicare card will include your name, Medicare claim number, the type of coverage you have (Part A, Part B, or both), and the date your coverage starts.

Whenever you get medical care, show your Medicare card. This will assure that a claim for payment is sent to Medicare. Be sure that you use your exact name and claim number. If you are married, your spouse will have his or her own card and claim number. Never let anyone else use your Medicare card, and keep the number as safe as you would a credit card number. Take your card with you when you travel, and have it handy when you call about a Medicare claim.

Medicaid Program

Medicaid is a medical assistance program. Medical bills are paid from federal, state and local tax funds. It serves low-income people of every age. Patients usually pay no part of costs for covered medical expenses. A small co-payment is sometimes required. Medicaid is a federal-state program and it varies from state to state. Medicaid is operated by state and local governments within federal guidelines.

Medicaid Coverage

Many different groups of people are covered by Medicaid. Even within these groups, though, certain requirements must be met. These may include your age, whether you are pregnant, disabled, blind, or aged; your income and resources (like bank accounts, real property, or other items that can be sold for cash); and whether you are a U.S. citizen or a lawfully admitted immigrant. The rules for counting your income and resources vary from state to state and from group to group. There are special rules for those who live in nursing homes and for disabled children living at home.

What Medicaid Does Not Cover

Medicaid does not provide medical assistance for all poor persons. Even under the broadest provisions of the Federal statute (except for emergency services for certain persons), the Medicaid program does not provide health care services, even for very poor persons, unless they are in one of the designated eligibility groups. Low income is only one test for Medicaid eligibility; assets and resources are also tested against established thresholds. As noted earlier, categorically needy persons who are eligible for Medicaid may or may not also receive cash assistance from the TANF program or from the SSI program. Medically needy persons who would be categorically eligible except for income or assets may become eligible for Medicaid solely because of excessive medical expenses.

Mandatory Medicaid Eligibility Groups

States have some discretion in determining which groups their Medicaid programs will cover and the financial criteria for Medicaid eligibility. To be eligible for Federal funds, states are required to provide Medicaid coverage for most people who get Federally assisted income maintenance payments, as well as for related groups not getting cash payments.

Optional Medicaid Eligibility Groups

States also have the option to provide Medicaid coverage for other "categorically needy" groups. These optional groups share characteristics of the mandatory groups, but the eligibility criteria are somewhat more liberally defined.

States may use more liberal income and resources methodologies to determine Medicaid eligibility for certain AFDC-related and aged, blind, and disabled individuals under Sections 1902(r)(2) and 1931 of the Social Security Act. For some groups, the more liberal income methodologies cannot result in the individual's income exceeding the limits prescribed for Federal matching.

Medicaid For The Medical Needy

The option to have a "medically needy" program allows states to extend Medicaid eligibility to additional qualified persons who may have too much income to qualify under the mandatory or optional categorically needy groups. This option allows them to "spend down" to Medicaid eligibility by incurring medical and/or remedial care expenses to offset their excess income, thereby reducing it to a level below the maximum allowed by that State's Medicaid plan. States may also allow families to establish eligibility as medically needy by paying monthly premiums to the State in an amount equal to the difference between family income (reduced by unpaid expenses, if any, incurred for medical care in previous months) and the income eligibility standard.