Medicare vs. Medicaid

Medicare is federal health insurance for American seniors and those with disabilities or chronic illnesses. Medicaid is a joint federal and state assistance program that helps low-income families and those who are medically needy to afford their healthcare.

Medicare Eligibility

You can qualify for Medicare if you are a United States citizen or legal permanent resident of at least five years who is 65 or older or has a disability.

Those with disabilities are automatically enrolled in Medicare after having received at least 24 months of Social Security Disability Insurance (SSDI). Those with Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s disease) are automatically eligible during their first month of receiving disability benefits. People with End-Stage Renal Disease (ESRD) can begin receiving benefits in their fourth month of a regular course of dialysis treatment or during their first month of dialysis if they are trained and approved to perform at-home dialysis.

Medicare Eligibility

Medicaid recipients are United States citizens or permanent legal residents who live in the state from which they are receiving Medicaid.

Financial eligibility for Medicaid is based on the Modified Adjusted Gross Income (MAGI), which is determined by your taxable income and tax filing relationships. Those who qualify based on blindness, disability, or age do not have to meet MAGI requirements. Their eligibility is instead based on income methods for determining Supplemental Security Income (SSI) benefits, as chosen by the Social Security Administration. Young adults who were former foster kids are not subject to the income requirement.

States can develop programs for medically needy people, whose income exceeds the general requirements. These people “spend down” their income to meet the threshold through paying their healthcare costs. Medicaid pays for healthcare costs above the amount needed for the recipients to spend down to become eligible.

Dual-Eligibility

You can have both Medicare and Medicaid. If you are dual-eligible, that means you are 65 or older and meet income requirements or have a disability and meet income requirements. There are Medicare Advantage plans specifically designed for this group of people. Dual Eligible SNPs cater to the needs of this population. You can qualify for one of these plans if you have Medicare and are in one of the following programs:

  • Full Medicaid
  • Qualified Medicare Beneficiary (QMB) only
  • QMB Plus
  • Specified Low-Income Medicare Beneficiary (SLMB) only
  • SLMB Plus
  • Qualifying Individual
  • Qualified Disabled and Working Individual (QDWI)

Costs Under Medicare

Most people with Medicare qualify for premium-free Part A. Everyone who wants Part B, medical insurance, has to pay monthly premiums for it, which start at $148.50 in 2021.

With Medicare, you also owe deductibles, copayments, and coinsurance. The Part A deductible is $1,484 for each benefit period and the Part B deductible is $203 for 2021. You are charged daily coinsurance after a set number of days as an inpatient in a hospital or skilled nursing facility. After you meet the deductible, copayments are 20% of the Medicare-approved amount for covered services.

Costs Under Medicaid

Most people with Medicare qualify for premium-free Part A. Everyone who wants Part B, medical insurance, has to pay monthly premiums for it, which start at $148.50 in 2021.

With Medicare, you also owe deductibles, copayments, and coinsurance. The Part A deductible is $1,484 for each benefit period and the Part B deductible is $203 for 2021. You are charged daily coinsurance after a set number of days as an inpatient in a hospital or skilled nursing facility. After you meet the deductible, copayments are 20% of the Medicare-approved amount for covered services.

Costs Under Medicaid

States can charge deductibles, copayments, and coinsurance which vary. These out-of-pocket costs cannot be more than five percent of a family’s income. There are no out-of-pocket costs for emergency services, family planning services, pregnancy-related services, and preventive services for children. Each year maximum out-of-pocket limits are set based on the recipient’s relation to the Federal Poverty Level.

With any additional questions about Medicare or Medicaid, seek help from Coastal Insurance Planning, located in Vinton, Virginia.