Differences between Medicare and Medicaid

Medicare and Medicaid are two entirely different programs. Medicare is a federal health insurance program for people age 65 and older with sufficient work history in the Social Security system, individuals under age 65 who have received Social Security disability benefits for two years and individuals with end-stage kidney disease are entitled to inpatient coverage. Eligibility for Medicare depends on age or disability only.

Medicare has two parts, A and B

Part A is a Hospital Insurance. The premium for this insurance is paid through payroll medicare tax deductions from the insured or his/her spouse's paycheck. Medicare Part A helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities. It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits.Except for a limited short term nursing home benefit, it doesn't cover nursing home or other long-term care. In order to get Medicare coverage for a nursing home stay, you must be in an approved skilled nursing facility, have been in the hospital for at least three days before entering the facility. Technically, there is a maximum of 100 days of nursing home benefit. Medicare doesn't pay for assisted living, residential care facilities, adult foster care or home care, and Custodial care. And, Medicare only covers medications during the time you are in the hospital, Medicare does have some benefit for home health but this is purely for medical reasons, not for care givers to come in and attend to someone who needs help with personal needs on a long-term basis.

Part B is a medical Insurance. People need to pay a monthly premium for Part B coverage. Medicare Part B helps cover doctors' services and outpatient care. It also covers some other medical services that Part A doesn't cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.

Prescription Drug Coverage.People need to pay a monthly premium for this coverage. Starting January 1, 2006, new Medicare prescription drug coverage will be available to everyone with Medicare. Everyone with Medicare can get this coverage that may help lower prescription drug costs and help protect against higher costs in the future. This insurance is provided by private companies. Beneficiaries choose the drug plan and pay a monthly premium. Like other insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.

Medicaid is an assistance program jointly administered by federal and state governments which provides access to health care for poor elderly and disabled individuals as well as poor children and their caretaker relatives. Medical bills are paid from federal, state and local tax funds. Each state's Medicaid program is different, because each state sets its own guidelines regarding eligibility and services, although certain federal rules apply to all programs.

Medicaid. To be eligible for Medicaid, an individual must fit into a category of persons eligible for Medicaid and must have income and resources under a threshold set jointly by the federal government and the individual states. Categories of people who can receive Medicaid include people age 65 and older, people under 65 with disabilities, children, parents of children in certain instances, and pregnant women. Eligibility for Medicaid depends on age, disability or family status and on an individual's or family's income and resources.

Medicaid is the program that provides benefits for long-term nursing home care, and, in some states, benefits for other types of long-term care. A senior enters a nursing home with certain assets and has to pay for the cost of care until he run out of money. Then Medicaid starts to pay for the remaining part of the nursing home stay. If the senior is married, the spouse not living in the nursing home gets to keep a modest amount of income and resources in order not to be impoverished.

Generally speaking, Medicare and Medicaid are different in many aspects. They are different in program's internal structures, funding sources, eligibility rules, and coverage. When planning for long-term care and deciding which program is good for you, these differences have to be taken into consideration.