Medicare and Medicaid were both enacted by congress in 1965, and that is where their similarities end. Despite their near-identical names, these two programs are intended for two very different groups of people. While some may be eligible for both programs, it is important to know the differences between the two in order to get the benefits and coverage you may be entitled to.
Medicare eligibility is not based on income; it is available to all citizens over the age of 65. It is also available to younger persons based on disability or condition. Medicaid is based on income, only those who meet the eligibility income level are eligible for Medicaid. The poverty level is used to determine eligibility, but in addition, a person must fall into one of the following coverage groups: children, pregnant women, parents of eligible children, seniors and individuals with disabilities. In addition to covering individuals who meet financial requirements, in some states Medicaid covers individuals who cannot otherwise afford insurance.
There are several parts to Medicare which determine coverage. Part A covers hospital bills, Part B covers medical insurance and Part D covers prescriptions. Participants may choose to participate in one part, but not another, which makes coverage very specific and unique to each participant.
Medicaid coverage is based on need and social welfare, so when a person has limited income and/or financial resources, this program is designed covers a broader spectrum of services than Medicare.
Medicare has a $99.90/month premium for Medicare Part B services. For Medicaid, there is no premium required for most members, but there may be a pay down requirement each month, similar to a monthly premium.
Medicare is administered through the federal government. While both programs are governmentally funded, Medicaid is administered through the state while Medicare is administered through the federal government.
When using Medicare, claims are filed for reimbursement for devices after the services have been delivered and charges have been incurred and Medicare will generally cover 80% of the cost. On the other hand, Medicaid requires filing a claim for “prior approval” before anything has been incurred or delivered, but will generally cover 100% of eligible costs.
Co-payments are required for Medicare participants. These co-payments are generated from a fee schedule, which requires 20% of the fee amount for most charges. There are no co-payments for Medicaid.