The Differences Between Medicare and Medicaid

Many people know of “Medicare” and “Medicaid,” but they may not know the difference between them. The confusion is understandable: Both Medicare and Medicaid are government-sponsored programs providing health care to US citizens. Taxes pay for both programs, and Congress instituted both in the mid-1960s. However, the programs are very different from each other.

Medicare offers dependable coverage for a small monthly premium for US citizens aged 65 and older and for those with a disability, whatever their income. Medicaid is a joint state and federal program designed to provide medical care to those who either don’t have health insurance or have insufficient health insurance and lack the financial resources to buy it. Basically, to qualify for Medicaid, a person must have a low income and few assets.

Currently, the federal government funds up to 50% of Medicaid’s costs, and wealthier states receive less funding than those states that are cash-strapped. One key difference: Medicaid consists of 50 state-run programs, while Medicare is one federal program covering all citizens who meet the age criteria, regardless of their income.

Eligibility and core benefits

Medicaid has specific federal guidelines for eligibility that must be met first, and then each state adds its own guidelines. The federal government mandates certain “medically necessary” treatment, such as lab services, X-rays, and pediatrician visits. States can then add additional benefits, such as vision and dental care, and prescription drug coverage.

Long-term care

For those unable to care for themselves, Medicaid may fund long-term care. Because Medicare does not cover these costs, and eligibility rules are complex, most people seek assistance from attorneys who specialize in Medicaid eligibility.

Medicaid usually doesn’t cover day care for those who can’t be alone during the day but have family present at night. Additionally, not all facilities accept Medicaid. If you’re concerned about your long-term care needs, discussing them with an insurance professional is always your best bet.