Medicare? Medicaid? We hear about these programs all the time thinking they go hand in hand. Sometimes they do, sometimes they don’t, so let’s take a look and see how they work separately or together.
In basic terms, Medicare and Medicaid are two separate programs. Medicare is a Federal program that provides health coverage if you are 65+ or under 65 and have a disability. Medicaid is a State funded program designed to provide benefits for people with Low incomes.
Who does Medicare cover?
Medicare is a federal government-sponsored healthcare program for those 65 and over, and for younger people who are disabled. Most people with Medicare paid FICA taxes during their working years and qualified for Medicare through work credits. The federal government establishes the eligibility criteria for Medicare. The key to remember is Medicare is the Primary Health Insurance Program for people age 65 and older or people under age 65 with a disability.
Who does Medicaid cover?
Medicaid is designed to help people with low income or special needs and circumstances. For example,
Medicaid can provide housing, food stamps, childcare, health care, nursing home care and many more benefits based on your individual situation and income level.
What are coverage options under Medicare?
Original Medicare coverage is the same in every state, including eligibility, benefits, and premiums. However, Medicare beneficiaries with high income will pay an income penalty.
Most people think Medicare covers 80%, but it doesn’t. Don’t forget about the Part A and Part B deductible. Out of pocket expenses can become high, i.e. ER visit could cost you 50% of the bill. Therefore, everyone needs to pick a GAP Plan.
You have two options: The Supplement or the Advantage plan.
Medicare Supplements or Medigap Plans: These are private plans that you can buy that will pick up the gaps in Medicare. For example, Plan G will give you 100% coverage for your doctor and hospital after you pay your part B Deductible (provided it is covered by Medicare).
Medicare Advantage Plans: This plan is basically Group Health Insurance for Seniors. It covers doctor, hospital, and drugs just like your current group health plan. It has a network of doctors and hospitals, it has copays, it has annual deductibles and annual max out of pockets like your current group health plan. The key difference is the Network of doctors and hospitals you must use.
Medicare Drug Plans: The point I want to stress on Medicare drug cover is this….You are required to buy a drug plan when you become eligible for Medicare or pay a 12% penalty per year for LIFE. However, if you are working full time with group health coverage from that work or a veteran, you can get out of paying the penalty.
Can I have Medicare and Medicaid at the same time?
The answer is YES if you qualify for both.
As of 2023, about 20 percent of Medicare beneficiaries were covered under both Medicare and Medicaid. This happens when a person has Medicare because they are elderly or disabled and also qualifies for Medicaid due to their financial situation.
The most popular type of plan for people on both Medicare and Medicaid is a Medicare Advantage Plan. More than 2.5 million people are enrolled in these plans as of 2020. If you have Medicare and Medicaid, this usually means you should not have any out-of-pocket healthcare costs. Billing issues have been common, so you need to make sure you have an agent with a real “Brick and Mortar” office that provides service after the sale.
We hope this gives you an idea of the differences between the two programs. Remember, here at the Gary Smith Agency, We put the CARE in Medicare!
If you have any questions, don’t hesitate to give us a call. (228) 762 3334.