Medicare vs. Medicaid for Older Adults

Medicare is an insurance enrollment program created to address the high medical costs older people face relative to the rest of the population. You can also use Medicare Advantage Plans through private insurance companies.

The Medicaid program, on the other hand, is an assistance program designed to help low-income people by paying for medical costs. Eligible users can get health coverage from various healthcare providers through their Medicaid benefits. It is paid for via cost-sharing payment plans or full payment coverage.

You may qualify for both Medicare and Medicaid, but you must meet separate eligibility requirements for each program.

Medicare Coverage 101

Medicare is an insurance program attached to Social Security. It is paid for by people paying into Social Security.

Medicare is available to people 65 or older, whatever their income, younger disabled people, and dialysis patients. It's administered by the federal government and generally operates the same everywhere in the United States.

The four-part Medicare program includes:

• Part A: Hospitalization coverage provides basic coverage for inpatient hospital visits, nursing facility visits, and home health care.
• Part B: Medical insurance pays most doctor and laboratory costs and some outpatient medical services, including supplies and equipment, home health care, and physical therapy.
• Part C: Privately purchased supplemental insurance provides additional services.
• Part D: Prescription drug coverage pays some of the costs of prescription medications.

Paying for Medicare Costs

You're generally not required to pay a monthly premium for Part A coverage if you or your spouse paid Medicare taxes while working.

If you buy Part A, you'll pay a monthly premium ($274 or $499 each month and $278 or $506 in 2023). On the other hand, you can receive premium-free Part A at 65 if any of the following apply:

• You already receive retirement benefits from Social Security
• You're eligible to receive Social Security
• You or your spouse held Medicare-covered government employment

In addition, most people pay the Part B premium ($170.10 each month and $164.90 in 2023). Individuals must also pay $233 (or $226 in 2023) per year as their Part B deductible.

Finally, under Part D, you'll pay a premium, yearly deductible, copayments or coinsurance, and other costs.

Medicaid Coverage Basics

Medicaid is an assistance program paid for by taxpayers. Medicaid is available to low-income people of all ages who fit into an eligibility group that's recognized under federal or state law. Beneficiaries must have an income level at or below the current federal poverty level.

States and local governments administer Medicaid within federal guidelines. The nuances and rules can vary from state to state. Services differ, but the federal government mandates coverage for certain services when they are deemed "medically necessary."

These covered services generally include:

• Hospitalization
• Doctor visits and basic services
• Family planning
• Laboratory services
• Nursing services
• Medical and surgical dental services
• X-rays
• Nursing homes and inpatient nursing facility services
• Home healthcare for people eligible for nursing facility services
• Clinic treatment
• Pediatric and family nurse practitioner services
• Midwife services
• Screening, diagnosis, and treatment services for persons under age 21

States have the option of including additional benefits, such as:

• Prescription drug coverage
• Optometrist services
• Medical transportation services
• Physical therapy
• Prosthetic services
• Dental services

Depending on your particular state, you may be asked to pay:

• Copayments
• Coinsurance
• Deductibles
• Similar charges

However, out-of-pocket costs are limited and typically only apply to groups of individuals with relatively higher incomes.

Dual Eligibility for Medicare and Medicaid

People who qualify for both Medicare and Medicaid are referred to as being "dual eligible." If you qualify and enroll in both programs, the two can be coordinated to cover your health care costs.

The Affordable Care Act created the Medicare-Medicaid Coordination Office under the Centers for Medicare & Medicaid Services. This office coordinates care for people who are dual-eligible.

The mission of the Office is to make the two programs work together more effectively, improving care and lowering costs.

Long-Term Care and Other Considerations

Medicaid is the largest source of long-term care funding. However, long-term care isn't covered by Medicare or, in many cases, by private health insurance policies.

As a result, many patients rely on Medicaid to help pay for their long-term care. Because Medicaid requires recipients to have virtually no assets, many attorneys specialize in assisting people in divesting their assets so that they may qualify for Medicaid and receive long-term care.

You may have questions about the eligibility requirements for Medicare and Medicaid, the benefits involved, or any other issues related to the two programs. It's in your best interest to contact an attorney who specializes in older adult law concerns.