Medicaid vs. Medicare

Medicaid vs. Medicare

Although both Medicaid and Medicare are publicly-funded health insurance programs created by a 1965 amendment to the Social Security Act, that’s about where their similarities begin and end. Here, we discuss important differences between the two.

Medicaid is a health insurance program designed for low-income and otherwise needy people, regardless of age, and is jointly-funded by both the federal government and individual state governments. Medicaid covers children, aged individuals, and blind and/or otherwise disabled people. The program also covers people who are eligible to receive federal assistance or income maintenance payments, such as Supplemental Security Income (SSI).

If you apply and are approved for SSI benefits, you will likely also be eligible for Medicaid. In thirty-two states and the District of Columbia, approval for SSI benefits automatically qualifies you to receive Medicaid, and eligibility for Medicaid begins the same month that you start receiving SSI payments. Should your financial situation improve, and you no longer qualify for SSI benefits, you will still be entitled to receive Medicaid protection.

Eligibility for SSI and Medicaid also likely makes you eligible for other financial-assistance programs, such as SNAP (Supplemental Nutrition Assistance Program) benefits. If you are receiving Medicaid, you do not need a Marketplace plan because you are considered covered under the health insurance law.

Other states have the same eligibility standards for Medicaid and SSI but choose to make their own Medicaid determinations: Alaska, Idaho, Kansas, Nebraska, Nevada, Oregon, and Utah. Still other states require you to apply for Medicaid benefits separately: Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia.

Medicaid benefits include doctor services, family planning services, hospitalization, x-rays, lab services, clinic treatment, pediatric services, nursing services, and midwife services.

In contrast, Medicare is an age-based federal health insurance program that guarantees coverage for individuals age sixty-five or older. It is paid with public funds collected through income taxes. Additionally, some Social Security Disability Insurance (SSDI) beneficiaries will qualify for Medicare even if they have not reached the age of sixty-five.

There are four “Parts” to Medicare. Part A provides hospital coverage. Part B provides medical insurance. Part C, also known as Medicare Advantage, offers vision and dental insurance and may cover copayments, coinsurance, and deductibles not covered by Parts A and B. Part D provides prescription drug coverage.

Unlike SSI and Medicaid, SSDI recipients do not immediately qualify for Medicare. Individuals need to have been eligible for SSDI benefits for two years before they qualify for Medicare, but the qualification is automatic after the two years.