Do you know the difference between Medicaid and Medicare? If you don’t, you’re not alone. Healthcare is confusing as it is, even before throwing the government into the mix. Navigating the distinctions between Medicaid and Medicare can often be difficult due to the similarities in names and the complexity of the programs.
Both Medicare and Medicaid are government-sponsored healthcare programs in the United States, but they serve different populations with distinct eligibility criteria. Medicare primarily provides health coverage for individuals aged 65 and older, and consists of different parts covering hospital care, medical services, and prescription drugs. On the other hand, Medicaid is designed to assist low-income individuals and families, regardless of age, providing coverage for a broader range of healthcare services including doctor visits, hospital stays, long-term care, and preventive care. Since Medicaid supports individuals of any age, there are some instances when someone is eligible for both Medicaid and Medicare - this is called dual-eligibility.
Medicaid
Medicaid eligibility varies by state and considers factors such as income, household size, and specific categories like pregnant women and children. Here are some key factors and terms around Medicaid:
Eligibility. Medicaid eligibility criteria vary by state, but generally include low-income individuals, families with children, pregnant women, elderly individuals, and people with disabilities. Eligibility is determined based on factors such as income, household size, and specific circumstances. Most states use what is called the Federal Poverty Level (FPL) to determine income eligibility based on household size. The FPL is updated annually to account for inflation.
Covered Services. Medicaid covers a broad range of healthcare services. Again, covered services may vary by state and provider. Some services that are covered may include:
Doctor visits
Hospital stays
Prescription drugs
Laboratory tests and X-rays
Maternity and newborn care
Mental health services
Pediatric care, including dental and vision services
Long-term care for elderly and disabled individuals
Children's Health Insurance Program (CHIP). CHIP is a Medicaid program that provides no-cost or low-cost health coverage to children in families who earn too much income to qualify for Medicaid but cannot afford private insurance. It extends coverage to children up to age 19.
Managed Care. Many states use managed care entities (MCE) to deliver Medicaid services. Under managed care, beneficiaries enroll in a health plan that coordinates their healthcare services, including primary care, specialist visits, and hospital care. Some examples of MCEs that you might recognize include Anthem, United Healthcare, Humana, Kaiser Permanente, or Aetna.
Medicare
Medicare is a federal health insurance program that primarily provides coverage for individuals aged 65 and older. However, there are some eligibility exceptions for certain individuals with disabilities and those with end-stage renal disease. Medicare coverage is broken down into four parts:
Part A (Hospital Insurance): Medicare Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Most people do not pay a premium for Part A if they or their spouse paid Medicare taxes while working.
Part B (Medical Insurance): Medicare Part B covers medically necessary services such as doctor visits, outpatient care, preventive services, and durable medical equipment. Beneficiaries pay a monthly premium for Part B coverage.
Part C (Medicare Advantage): Medicare Part C, also known as Medicare Advantage, allows beneficiaries to receive their Medicare benefits through private insurance plans approved by Medicare. These plans typically include coverage for Parts A, B, and often prescription drugs (Part D), and may offer additional benefits like vision, dental, and fitness programs.
Part D (Prescription Drug Coverage): Medicare Part D provides prescription drug coverage through private insurance plans approved by Medicare. Beneficiaries typically pay a monthly premium, deductible, and copayments or coinsurance for covered medications.
While Medicare covers a wide range of medical services, it does not cover all healthcare expenses. Medicare recipients are responsible for certain out-of-pocket costs, such as premiums, deductibles, coinsurance, and copayments, depending on the services received and the type of coverage chosen. Like Medicaid, Medicare is often provided by managed care entities, like the ones listed above.
Dual Eligibility
Some individuals are eligible for both Medicaid and Medicare, also known as dual-eligible beneficiaries. Medicaid may help cover some premiums, cost-sharing, and services that are not covered by Medicare, such as long-term care. Here are some useful terms to better understand dual eligibility:
D-SNP: Dual Eligible Special Needs Plans (D-SNPs) enroll individuals who are entitled to both Medicare and medical assistance from a state plan under Medicaid. States cover some Medicare costs, depending on the state and the individual’s eligibility.
Unified Duals: Individuals enrolled in both Medicare and Medicaid under the same MCE. For example, an individual who has Anthem Blue Cross Blue Shield as their provider for both Medicaid and Medicare.
Unaligned Duals: Individuals who are enrolled in both Medicare and Medicaid, but under different MCEs. For example, an individual who has Anthem as their Medicaid provider and United Healthcare as their Medicare provider.
Affordable Care Act
The Affordable Care Act (ACA), also known as “Obamacare”, is a healthcare reform law enacted in the United States in 2010 under the administration of President Barack Obama. The ACA aimed to increase the affordability and accessibility of health insurance, expand Medicaid coverage, and implement various reforms to the healthcare system. Through the establishment of Health Insurance Marketplaces and the expansion of Medicaid eligibility, millions of previously uninsured Americans gained access to affordable health insurance coverage. However, despite grants available through the ACA, many individuals and families have experienced increases in health insurance premiums since the law was implemented. While the ACA has made significant strides in expanding access to health insurance coverage and implementing consumer protections, it continues to face challenges and criticisms that highlight the complexity of healthcare reform in the United States.
What can be expected for the future of Medicare and Medicaid? Each year, more and more states choose to adopt to expand Medicaid coverage, meaning Medicaid is made available to individuals higher than the FPL, in addition to those that reach the minimum federal income requirements. To date, 10 states have yet to expand Medicaid coverage.
While Medicare and Medicaid stand as pillars of the U.S. healthcare system, providing vital coverage to millions of Americans, the healthcare space in America is frequently changing. Looking to the future of healthcare, it's clear that the landscape will continue to evolve, driven by advancements in technology, shifting demographics, and ongoing efforts to improve accessibility, affordability, and quality of care. Challenges such as rising healthcare costs and disparities in access to care remain pressing concerns. While navigating these complexities, it's vital to prioritize collaboration, innovation, and equitable access to healthcare for all individuals, ensuring that Medicare and Medicaid continue to adapt and evolve to meet the evolving needs of our country. By embracing innovation while upholding the core principles of compassion, equity, and quality, it is vital to strive towards a future where healthcare is accessible, affordable, and effective for all.
Margie Churchill is a Consultant with Summit Managed Solutions where she specializes in healthcare communications and assists partners with effective and impactful engagement campaigns. Summit Managed Solutions is a management consulting and professional services firm that partners with healthcare organizations across the private, public, and social sectors to create value. By providing comprehensive solution management and inclusive business operation services, Summit helps deliver specific, transformative outcomes. With consulting and managed service offerings, Summit helps partners overcome the critical challenges associated with people, process, and technology, while providing partners with flexibility, reliability, and innovation that will propel growth.
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