Medicare vs. Medicaid: What's The Difference?

It can be daunting to navigate healthcare and health insurance options for a loved one, especially considering the breadth of available programs like Medicare and Medicaid. Ahead, we look at these two major healthcare programs, explaining their coverage, eligibility, and how they can complement each other to ensure comprehensive care for your family member. 

What is Medicare?

Medicare is the national insurance program that helps people who are 65 and older, as well as those who have severe disabilities or kidney diseases, pay for health care services. Medicare is run by the Centers for Medicare & Medicaid Services (a federal agency) and is available throughout the United States. As a family caregiver, it is essential to understand the basics of Medicare assistance for your loved one.

What does Medicare cover?

Medicare is comprehensive, covering a wide range of healthcare services which include:

• Hospital Insurance (Part A): Covers inpatient hospital stays, care in skilled nursing facilities, hospice care, and some home health care.
• Medical Insurance (Part B): Covers certain doctors' services, outpatient care, medical supplies, and preventive services.
• Medicare Advantage Plans (Part C): An alternative to Original Medicare, these plans are offered by private companies approved by Medicare and provide all Part A and Part B benefits.
• Prescription Drug Coverage (Part D): Adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-fee-for-service plans, and Medicare Medical Savings Account plans.

In addition, Medicare helps with the costs of prescription drugs, dialysis, durable medical equipment (such as wheelchairs and walkers), home health care services, and even some vision and dental services. However, these last two are typically limited.

Special considerations for family caregivers

• Disability and early Medicare access: If your loved one is eligible for Social Security Disability benefits, they can receive Medicare coverage before turning 65.
• Coverage specifics: It's important to note that not all Medicare options cover family caregiver assistance or visiting nurse services. Evaluating the parts of Medicare and additional supplement insurance (Medigap) is essential to determine the best coverage options for your loved one's needs.

Eligibility and enrollment

Medicare is not means-tested, meaning eligibility is not based on income. People contribute to Medicare throughout their careers via payroll taxes, so coverage is based on eligibility criteria rather than financial need. This ensures that regardless of current income or savings, individuals who meet the age or disability requirements can receive benefits. Enrolling your family member in Medicare can typically be initiated with a call to the Medicare Helpline or visiting their website.

What is Medicaid?

Medicaid is a joint federal and state program that helps people with limited income and resources with medical costs. Medicaid also offers benefits not usually covered by Medicare, such as nursing home care and personal care services. State governments manage the program within federal guidelines, which means coverage and eligibility can vary significantly from one state to another.

Understanding Medicaid is crucial for family caregivers, as it can significantly help them manage care for loved ones who may not have sufficient financial resources.

What does Medicaid cover?

Medicaid coverage is quite comprehensive, and typically includes:

• Inpatient and outpatient hospital services
• Doctor visits
• Long-term care services, including nursing home care and community-based long-term care that can help a person remain at home
• Family planning and maternity care
• Home health services
• Laboratory and X-ray services
• Pediatric services including Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services for children and young adults under 21

Additionally, Medicaid covers more extensive services not typically covered by Medicare, such as personal care services and supportive services in the community, which are vital for people with chronic illnesses or disabilities living at home.

Special considerations for family caregivers

• Community-based options: Many Medicaid programs include waivers that allow benefits to be used for community-based services intended to keep people out of hospitals and nursing homes.
• Income-based eligibility: Since Medicaid is means-tested, understanding your state's specific income and asset guidelines is crucial for determining eligibility for your loved one.

Eligibility and enrollment

Medicaid eligibility is determined primarily based on income, family size, disability, and other factors. Since Medicaid is administered by the states, there are significant variations in who is eligible and what services are covered.

Enrollment can be done at any time of the year—not just during an open enrollment period. Applications can usually be submitted online, by mail, or in person at local social service offices. Family caregivers should gather financial documents, medical records, and proof of residence as part of the application process. How can my parent qualify for Medicaid?

If you're looking for assistance with health care costs, Medicaid can help. It's a government program that helps low-income people and their families receive proper medical care. In most states, anyone can apply for Medicaid regardless of age. However, your loved one's state may require them to have a certain level of income or disability to qualify. 

If you are a family caregiver, realize that each state differs in benefits and requirements. Not all programs will cover direct family caregiver assistance, prescriptions, and other necessary medical care. Many programs require individuals to add dental and vision benefits. The difference between benefits changes significantly from state to state and is based on income and disability requirements. 

To qualify for coverage under the federal government's Medicare program, your parent must have an income below a certain percent of the federal poverty level (FPL) for their family size (this information is on the website). 

If your family member qualifies, Medicaid will pay for your medical expenses except for small copays or coinsurance. The amount paid depends on income level; the lower the income, the less out-of-pocket paid. Your family members may also be required to pay a small copayment when they visit doctors or other health care providers. Although this copayment varies by state, it will always be at most 5% of their monthly income.

Can you have both Medicaid and Medicare?

someone can be eligible for both Medicare and Medicaid, and individuals who qualify for both are known as dual eligibles. This situation can provide a comprehensive coverage network that helps manage the costs and services that either program alone might not fully cover.

How dual eligibility works

• Medicare: As a federal program, Medicare provides health insurance primarily to people over 65, regardless of income, and to younger individuals with specific disabilities or diseases. Medicare covers hospital care (Part A), medical services (Part B), and prescription drugs (Part D).
• Medicaid: This state-managed program assists with medical costs for people with limited income and resources and covers many services that Medicare does not typically pay for, such as long-term care and personal care services.

Benefits of dual eligibility:

1. Cost coverage: Medicaid often covers Medicare premiums and cost-sharing requirements, reducing or eliminating out-of-pocket expenses for dual eligibles.
2. Comprehensive care: Dual eligibles can access a broader range of healthcare services than those covered by Medicare alone, including long-term care services and supports, predominantly covered by Medicaid.
3. Medication costs: Medicaid may cover additional prescription drugs not covered by Medicare Part D or reduce the cost of medications under a Medicare Part D plan.

Enrollment considerations

To manage both Medicare and Medicaid, it's important to ensure that enrollment processes are handled carefully, as errors can lead to lapses in coverage or financial penalties. Dual eligibles are often automatically enrolled in Medicare Part D through a process that helps them receive prescription drug benefits at little to no cost.

If you or someone you care for may be eligible for both programs, it's advisable to contact the local Medicaid office and a Medicare counselor. They can provide guidance tailored to individual circumstances, helping maximize the benefits of both programs. This coordinated approach can be crucial for securing comprehensive healthcare coverage and minimizing out-of-pocket expenses.

Frequently asked questions

How do I know if my loved one is eligible for Medicaid?

Medicaid eligibility is determined based on income, assets, family size, and particular circumstances like disabilities. Each state has its own criteria, so it's best to contact your state's Medicaid office for specific eligibility requirements.

What are Dual Special Needs Plans (D-SNPs)?

D-SNPs are specialized Medicare Advantage plans designed for people who qualify for both Medicare and Medicaid. These plans offer integrated benefits from both programs, additional services, and coordinated care to meet the specific needs of dual eligibles.

How can I change my loved one's Medicare plan?

You can change your loved one's Medicare plan during the Annual Enrollment Period (October 15 to December 7 each year) or a Special Enrollment Period if they qualify due to specific circumstances, such as moving or losing current coverage.

Does Medicaid cover long-term care for older adults?

Yes, Medicaid can cover the total cost of long-term care in nursing homes and may also cover home and community-based services, which allow individuals to receive long-term care in their homes or communities.

What should I do if my loved one needs more coverage than Medicare provides?

If Medicare coverage is insufficient, you can explore supplemental plans like Medigap, which covers additional costs not paid by Medicare. Alternatively, if they are eligible for Medicaid, that program can help cover many costs not covered by Medicare.

Where can I find help with the Medicare and Medicaid application process?

Assistance with the application process is available through local Medicaid offices, State Health Insurance Assistance Programs (SHIP), and the Medicare website. These resources can provide guidance tailored to your specific situation.

A note from Givers

For family caregivers, mastering the details of Medicare and Medicaid can significantly ease the burden of medical expenses and improve the quality of care your loved one receives. With options like Dual Special Needs Plans, caregivers can also find ways to streamline and enhance the coverage available to dual eligibles.

Every caregiving journey is unique, and staying informed about these healthcare options ensures you can make the best decisions for your family's needs. Always consult with healthcare professionals and state agencies to tailor these resources effectively to your circumstances.