Medicare vs. Medicaid - Do You Know the Difference?

Medicare and Medicaid sound similar, but they're actually very different. Each provides different types of assistance to help with healthcare. Both are government programs, but they are very different. Medicare is provided by the federal government (the Social Security Administration). Medicaid is provided by state governments and varies from state to state. Medicare is available to anyone age 65 and older who has worked at least 10 years in the U.S., and at any age to people with disabilities. Medicaid is only available to people with limited income and assets.

Let's look at the other differences.

Medicare

Medicare is federal healthcare insurance for people 65 years of age or older. You can get Medicare under age 65 if you have a qualifying disability, including end stage renal disease (ESRD) or ALS. Medicare covers inpatient or hospital care (Part A), outpatient services (Part B), and prescription drugs (Part D). Other plans, such as Medicare Advantage (Part C) and Medigap are also available to help offset medical costs.

Part A is free to most people, but the other parts have a cost that varies depending on the coverage you choose.

Medicare is administered by the Social Security Administration. If you're already collecting Social Security benefits, you are automatically enrolled in Medicare when you turn 65. If you're not collecting Social Security, you should enroll in Medicare during the seven-month period surrounding your 65th birthday month (three months before, three months after, and your birthday month).

Medicaid

Medicaid is an assistance program serving low-income people. Each state has its own Medicaid program, adhering to federal requirements. The plans can vary greatly from state to state. The benefits are focused on care and services in a hospital or skilled nursing facility, and other care necessary based on a a person's need for help with certain activities of daily living.

As mentioned above, Medicaid is only available to people with limited income and assets. Like the plans themselves, the limits vary by state. Contact your state office to learn about qualification and specific benefits offered by your state.

When to Use Each Program

Everyone age 65 and older can, and should, use Medicare. It's typically a free way to get hospital insurance, and a relatively inexpensive way to get outpatient and prescription insurance.

On the other hand, Medicaid is for people with limited income and assets who need help with certain medical services.

For More Information

The explanations provided above are very brief because Medicare and Medicaid are detailed, involved topics. To learn more about Medicare and Medicaid, Aging Energized offers several resources:

• Numerous blog articles about Medicare and Medicaid.
• Medicare Basics online course.
• Medicare Basics downloadable eBook.
• Medicaid for Seniors Basics online course.