There are two kinds of health insurance plans offered by the US government: Medicare and Medicaid. Both offer benefits related to general health insurance, but the eligibility for each program is different.
Adults over the age of 65 are eligible for Medicare. It costs a few hundred dollars per month, and depending on one’s income, a co-pay may be required.
Only low-income individuals and families who fulfill specific criteria can receive Medicaid benefits. It is often less expensive than Medicare as it offers free or inexpensive coverage to those who need it most.
What is Medicare?
Americans over 65 and young citizens who have been medically diagnosed with a disability or illness are eligible for Medicare. Income is not a factor in determining eligibility for Medicare.
Most Americans would have paid a Social Security tax during their working years. Contributing to this pool of tax dollars makes them eligible to enroll in Medicare when they reach the age of 65.
However, doing this only registers them for Medicare Part A, which covers hospital care. To have a comprehensive plan, one must buy additional Medicare components:
– Original Medicare
Individuals who want Original Medicare will typically enroll in Part A and then have the option of purchasing Parts B and D for a monthly premium.
Part B covers doctors, medical tests, and some procedures, whereas Part D is intended to cover the costs of prescription medications.
– Medicare Advantage
Part C, or Medicare Advantage, is a newer health insurance policy that combines all aspects of Original Medicare. Plans determine their deductibles and out-of-pocket maximums, and they typically include extra coverage benefits like dental, hearing, and prescription drugs.
Medicare Advantage plans are issued by private health insurance companies such as UnitedHealthcare and Aetna rather than the government. This allows them to compare policies from different providers and find the best Medicare Advantage policy for their specific needs.
What is Medicaid?
Medicaid is a federal and state-run healthcare program for low-income Americans. To qualify for Medicaid coverage, one must fall below the state’s income cutoff, which is 138 percent of the federal poverty level in states with expanded Medicaid.
Income eligibility criteria differ by state and condition, such as disability or pregnancy. One can enter their estimated income at Healthcare.gov to see if they qualify based on the number of people in their household.
As a household’s dependents grow, so will the eligibility for Medicaid’s income threshold.
Differences in Coverage
Medicaid, in general, offers broader coverage for medical, hospitalization, and prescription drug needs under a single plan, making it a more comprehensive health insurance option. It also covers adult dental and vision care in some states.
Medicare, in contrast, is divided into several components, each offering a different level of coverage. Original Medicare, which includes Parts A and B, has many coverage gaps that can be filled by purchasing additional Medicare plans, such as Part D or Medicare Advantage.
The main distinction in coverage between Original Medicare and Medicaid is that only Medicaid pays for long-term care, including nursing homes.
